The Evolution of Tourism in El Salvador: Strategies, Challenges, and Economic Impact

El Salvador, a small country in Central America, experienced a notable boost in tourism in the 1960s. This crucial era marked the emergence of organized tourism, and during this transformative decade, important efforts were made to lay the foundation for the tourism industry’s later development.

In this era, the Instituto Salvadoreño de Turismo (ISTU) was created, an agency authorized to promote the sector's development. At the same time, the financial sector was given support for tourism enterprises, such as the Economic Development Fund (EDF). The EDF was given out by the Central Reserve Bank in 1966, and it introduced lines of credit designed to boost investment in tourism infrastructure.

Although these initiatives were intended to boost infrastructure, the tangible impact remained modest. However, in the following decades, different strategies and programs emerged, achieving more significant economic growth. Of course, there were barriers to this growth, which we’ll explore in more depth below.

Exploring the Growth of Tourism Since the 1960s

In 1979, El Salvador underwent a civil war that lasted until 1992. With the increase in violence, the country was no longer considered safe for travel, and the tourism sector was decimated. Upon the war’s end, El Salvador began to recover, but the country's image as a tourist destination had been marred by the war.

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On top of that, the civil war was a destabilizing force sociopolitically - food insecurity, poverty, and gang violence filled the vacuum left behind. The specter of past militarized violence, and the lived experience of current more decentralized violence, further broke down the ability for the tourist sector to rebuild after the war. More drastic change was needed.

Jumping forward quite a bit from the years following the war’s end, one arrives at the Covid-19 pandemic. During the COVID-19 pandemic, El Salvador, like many other countries worldwide, faced unprecedented challenges. Border closures and mobility restrictions dealt a severe blow to the already challenged tourism sector, causing widespread disruption to businesses and livelihoods. However, despite the adversity, by 2022, El Salvador managed to recover 96% of pre-pandemic tourism.

Recent Government Initiatives and Policies

In recent years, the current administration of President Nayib Bukele has implemented policies focused on improving security throughout the country, significantly boosting tourism. Simultaneously, various strategies have been deployed to improve infrastructure and revitalize key tourist destinations, with the restoration of the Historic Center of El Salvador being one of the most notable transformations.

At the same time, efforts are underway to promote initiatives such as Surf City, which aims to improve El Salvador's coastal areas and attract investment. Successful surfing competitions have recently been held in El Salvador, solidifying its attractiveness as a top choice for surfers worldwide.

The recent implementation of the National Tourism Plan 2030 presents a series of strategies to be developed in the coming decade to bolster the tourism sector as one of the main socio-economic engines of the country. Marketing strategies have been an essential part of tourism growth thus far and they constitute some of the action in Plan 2030. Building tourism in El Salvador would put it on the international radar and motivate investment, thus generating employment and benefiting the overall economy.

According to the latest trends report from WTTC and ForwardKeys, for the first half of 2024, El Salvador has demonstrated an impressive 157% growth in tourism compared to the same period in 2019. Building on this momentum, the WTTC projects that El Salvador will emerge as the leader in international tourist arrivals in Latin America for the January to June period this year. 

These projections align with the growth forecasts set out by the Ministry of Tourism (Mitur), which anticipates approximately 3.8 million foreign visitors in 2024. If this estimate is achieved, it would surpass the historical milestone of 3.4 million arrivals recorded in 2023, with the consequent generation of foreign exchange estimated at US$3.793 million.

As market researchers, we want to be ahead of the curve. We want to see emerging trends, markets, and brands before they’ve made themselves obvious. What the data and strategy from El Salvador tell us is that it is one such market. When we advise our clients, forecast the next few years, and seek out participants, it’s important to keep this rising market in mind.