Does Nicaragua have medical tourism potential?

 

Nicaragua seeks to position itself as a medical tourism destination, states a report commissioned by a local government agency.

Nicaraguan based Calvet & Associates specialize in promoting inbound investment into the country and other Central American states. So, they have an incentive to paint a rosy picture; 90% of the major investment projects in Nicaragua go through them.

The investment consultants claim that nearby Costa Rica attracts 100,000 medical tourists and US$300 million in revenue each year. This contrasts sharply with figures of 50,000 or less from within Costa Rica; even these figures are guestimates rather than actual numbers.

There is no denying that more people are going to Central America, partly due to the now very large numbers of Hispanics in the USA.

Raul F. Calvet of Calvet & Associates claims that Nicaragua could receive US$27.2 million in 2020 from medical tourism and US$105.2 million by 2025.

The study says that medical tourists spend more and stay longer than normal tourists, with 80% of patients traveling with a family member or a friend.

However, to have any chance of achieving these figures, the country would need substantial inbound investment to build hospitals, clinics and hotels. The agency has a portfolio of potential project ideas seeking investors, including hotels and other developments

Nicaragua has only one hospital certified by Joint Commission International. Medical costs are low and there are direct flights to several cities in the United States, where millions of Central Americans reside, representing a high potential of tourists. For Central America, the largest market for medical tourism is the United States due to its proximity and cultural links.

PRONicaragua is the Nicaraguan Investment and Export Promotion Agency, whose mission is to generate economic growth and job creation in Nicaragua by attracting high-quality foreign direct investment. It sees potential in medical tourism.

In 2011 Nicaragua enjoyed the highest rate of economic growth in Central America. Tourism is also prospering. International arrivals passed the 1 million mark for the first time in 2011. According to the Nicaraguan Tourism Board (INTUR) in 2012, Nicaragua received 1,179,581 tourist arrivals and US$422 million in revenues, a growth of 11.3 percent and 11.5 percent, respectively. A new tourism incentive law that brought in 400 inward investment projects in tourism is a key reason for the increase.

According to 2012 statistics from INTUR, the main source markets for tourism in terms of region were Central America (65 %), North America (24 % and Europe (7 %t). In terms of countries, the main source markets were Honduras (21 %), U.S.A. (20 %), Costa Rica (14 %), El Salvador (13 %) and Guatemala (8 %). The hotel industry has been developing mainly in the capital Managua, which holds 46.7 % of the hotel rooms of the country.

Medical tourism is currently very limited : less than 1,000 a year, mainly from Managua and Granada, with a few from the USA, mostly Nicaraguans resident in the USA. Intur is trying to set up a national medical tourism body.

There is long-term potential to tap into the US market but the country will need hospitals and clinics for people to go to, plus doctors and nurses.

Nicaragua is striving to overcome the after effects of dictatorship, civil war and natural calamities, which made it one of the poorest countries in the Western Hemisphere. It has very little infrastructure but in recent years has seen hundreds of inward investment projects.

Some of the factors that make Nicaragua an attractive investment destination for tourism projects include its cultural richness, natural beauty, competitive property costs, skilled labour force, generous tax incentives, the country's strategic location and easy access from international markets.

The Tourism Incentive Law provides the investor with a diverse and generous tax incentive framework, considered among the best in the region. The law provides incentives and benefits for investments in lodging, tour operators, transportation of tourists, airlines, and others.

The incentives include:
•    Exemption from 80 to 90 % Income Tax for 10 years
•    Exemption from property tax for 10 years.
•    Exemption of import duties and VAT on the purchase of equipment and fixtures of the building for 10 years.

Nicaragua last year set a new personal best for foreign-direct investment after a monstrous 91% jump in foreign-direct investment in 2011. In real terms, foreign investment levels have more than doubled over the past two years. Last year’s record growth numbers were the result of 349 investment projects from 37 foreign countries, with Venezuela leading the charge, representing 16% of the total investment. Panama and the United States were second and third, respectively, representing 15% of the total foreign investment in the economy.

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