How Informality and the pandemic affected Tourism in Peru

The tourism sector is the third most important activity in Peru, as it generates 3.9% of the national GDP and is one of our main sources of foreign exchange. There is no doubt, then, of the importance of this sector for the country's economy, even more so if one considers the important role it plays in boosting the economy due to its transversal nature and in the generation of jobs. However, informality is a major problem that prevents it from reaching its full potential. To combat it, the Ministry of Foreign Trade and Tourism (Mincetur) presented the Support Plan for the Formalization of the Tourism Sector by 2021.

However, the potential of tourism will only materialize if the economic activities related to the sector are carried out in formality. Informality is a major obstacle to competitiveness, as it is one of the main obstacles to the effectiveness of policies aimed at improving the quality and provision of tourism services. It is important to mention that the National Strategic Tourism Plan (Pentur) already contemplates formalization as a measure to improve competitiveness in the sector and, therefore, establishes the objective of promoting formalization coordinated with the private sector, since informality diminishes the efficiency of the sector by congesting public infrastructure and reducing revenues to supply it. The Support Plan for the Formalization of the Tourism Sector ratifies this objective and sets the lines of action to achieve it. 

The general purpose of the Support Plan for the Formalization of the Tourism Sector is to promote the formalization and improvement of competitiveness in the provision of tourism services. In line with this purpose, 4 specific objectives are proposed:to increase the number of providers of formal tourism services; to increase the number of tourism service providers with quality recognition and certifications; to optimize actions related to the formalization of the tourism sector at the three levels of government; and to constitute the tourist as an active agent that promotes formalization.