Investing in El Salvador's tourism

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Introduction: Why Now

El Salvador has become more prominent on the map of Central America in recent years thanks to the Surf City beach brand, updated transport infrastructure and digital reforms. For the investor, this is a window of opportunity: the demand for short trips (Fri-Sun), the growth of transit and diaspora flow from the United States, the development of gastronomic and urban tourism, as well as the potential of the "beach during the day - events/entertainment in the evening" link.

1) Where is the yield potential

A. Beach Cluster (Surf City and adjacent coves)

Boutique hotels 30-80 rooms, apart-hotels, hostels "premium budget."

Beach clubs, surf schools, wellness centers, gastro markets near the water.

Revenue drivers: RevPAR in high season, F&B, sunset events.

B. City weekends (San Salvador + agglomeration)

Mid-scale business hotels, lifestyle hotels, mixed-use (hotel + offices + retail).

Entertainment complexes: restaurants, concert venues, evening shows, casinos/gaming halls as "evening uppell" in the permitted legal framework.

Drivers: MICE stream, events, shopping, tours.

C. Ecotourism and outdoor activities

Lodges near volcanoes and lakes, trekking centers, bird-watching, coffee ranch excursions.

Low number of rooms, high ADR due to "uniqueness."

D. Cruise and transit tourism

Outbound day tours "in 4-6 hours," food clusters, crafts, photo location.

Partnership with transport: shuttles, taxis, mini-TTO (tourism transfer operations).

2) Login formats and legal decisions

Greenfield/building from scratch: site, title, environmental opinion, grid connectivity.

Brownfield/renovation: conversion of offices/retail to hotel/apart-hotel, reconcept of old hotels.

PPP/concession models: embankments, marinas, congress centers, parking lots, cable cars/elevators to the beaches.

Ownership structures: SPV for an object, holding for a group of assets; management agreement (HMA) or franchise with an international brand.

Operating model: classic management, lease/fix rent, manchising (management + leasing), mixed F&B revenue-share.

3) Investment incentives and investor package

Tax incentives (by type: exemption from import duties on equipment, accelerated depreciation, possible holidays for priority zones).

Tourism development zones: simplified permitting procedures, fast-track on land and communications.

Labor programs: staff training (housekeeping, F&B, surf instructors, guides), soft-skills subsidies.

Destination marketing: joint campaigns with Turofis, participation in international exhibitions, information tours for the press/agencies.

Digital services: visa and migration simplifications for tourists, e-payment infrastructure, the ability to accept cards/e-wallet and, if necessary, crypto options for guests (taking into account AML/KYC).

💡 Recommendation: collect incentives into a single "invest card" of the project (one-pager) - the duration of benefits, conditions, KPIs for employment and local procurement.

4) Land, construction and ecology

Site due diligence: title, encumbrances, sanitary zones, shoreline/coastal strip, water/sewer/electricity access.

EIA/Environmental Review: Sustainable Materials, Effluent Treatment, Waste Management, Shore Erosion Protection.

Design-to-budget: modular solutions, local materials (volcanic rock, wood), passive cooling, solar panels.

Robustness: certifications (EDGE/LEED/supra-regional), measurable vody/energii/SO₂ metrics per number.

5) Safety, reputation and social integration

Security plan: lighting, CCTV, trained security, coordination with municipal services.

Community strategy: hiring from local communities, purchasing from farmers/artisans, joint initiatives (beach cleaning, culture, sports).

ESG policy: supplier code, anti-exploitation, accessibility for people with disabilities, reporting 1-2 times a year.

6) Funding: Term to Close

Capital

Equity (sponsor's equity), co-invest with local families/groups, club deals.

International brands: franchise/management in return for brand premium and marketing.

Debt

Local banks (construction + investment loan), international banks, DFIs (developing institutions) - for infrastructure, sustainability, social effect.

Additional: credit lines for equipment, green/social bonds (for large clusters).

Typical metrics

Mid-scale projects: IRR 14-18% (reference), payback period 6-8 years with competent seasonality management.

DSCR ≥ 1.3-1.5 by the time of stabilization.

Sensitivity: ± 10-15% by ADR/load and CAPEX growth by 10% - mandatory stress tests.

7) Product and revenue: how the P&L is "laid out"

Hotel: ADR, loading, RevPAR, extra (F&B, spa, surf school, transfers, merch).

Entertainment/events: tickets, site rental, sponsorship, VIP packages.

Retail/food-hall: fixed-rent +% from turnover.

Partnerships with leisure operators: surf/dive/fishing, guest tours, coffee farms - revenue-share.

Evening product: concerts, shows, sports broadcasts; if there is a legal framework - gaming halls/casinos as upsell (responsible game, KYC/AML, age control).

8) Risks and how to manage them

Construction permits: work with a local technical consultant, early dialogue with the municipality.

Seasonality: calendar of events, promo for "low" weeks, dynamic pricing.

Capital: EPC fixed price, 10-15% contingency, construction/earthquake insurance.

Operating: SLAs with service providers, brand standards, KPIs for F&B and housekeeping.

Financial: hedge rates (if USD revenue/expenses partially in local currency), covenants, liquidity reserve for 6-9 months OPEX.

Reputational/social: dialogue with communities, guest code of conduct, noise and transport regulations.

9) How to "pack" a project for an investor

One-pager (1 page): location, concept, capacities, capex/opex, target metrics (ADR, loading, RevPAR), IRR/MOIC, roadmap.

Investor Deck (10-15 slides): market, competition, analogy cases, financing architecture, incentives, ESG, team, permit and construction schedule.

Data Room: land title, survey, EIA status, feasibility study, letters of intent from brands/operators, draft HMA/lease, term sheet for debt.

Pitch angle: "compact market with high power output speed," "evening check + event," "ESG design and local employment."

10) KPI after start-up

Commercial: ADR, download, RevPAR, GOPPAR, share of direct bookings, average F&B check

Tourism effect: length of stay (LOS), repeated visits, share of "Surf by day - Show by night" packages.

Social: jobs (women/youth), local purchases (% of F&B), trained personnel.

Ecology: water/energy consumption per room, waste processing, green certificates.

Safety: Incidents/1,000 guests, NPS safety, response time.

11) Case formats for fast scaling

1. Beach Cluster 50 + 50: 50-room boutique hotel + 50 branded residences; communal pool, surf school, evening stage.

2. City Mixed-Use Hub: 120-room hotel + gastro market + concert hall, integration with parking and safe night transport.

3. Volcano Eco-Lodge: 25-40 lodges, trails, observatory, coffee tours, "quiet" calendar and science tourism.

4. Convention Light (MICE-lite): flexible room 600-800 seats, transformable meeting rooms, evening program/show.

12) Roadmap 2025-2030 for stakeholders

State and municipalities

One-stop-shop on permissions (SLA and deadlines), site catalog, PPP standard, public calendar of events.

Incentive package with "give- & -get" system: benefits ↔ measurable KPIs for employment/ecology/ESG.

Investment portal with interactive map, HMA/lease/PPP templates.

Business and associations

Consortia developer + operator + brand, uniform safety standards and RGP for evening entertainment.

Service academies (F&B, front office, event production, outdoor guides).

Joint Destination Marketing Funds (DMOs).

Financial partners

Preferential credit lines for "green" solutions (solar panels, water, insulation).

Guarantee programs for SMEs (restaurants, excursions, crafts) around large hotels.

El Salvador offers a rare combination: compact logistics shoulders, growing coast branding, diaspora demand and proximity to the U.S. market. Attracting investors is not an isolated "benefit," but an ecosystem: fast permits, transparent PPPs, sustainable design, security, a strong evening product and a managed project economy. With this setting, 2025-2030 can be a period of high-quality growth in tourism infrastructure - from boutique hotels and eco-lodges to urban mixed-use clusters.