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Tourism Interview with Pres. Blue Doors Hotels

Tourism: The Locomotive that will Drive the Economic Future of Colombia
In recent years, the Colombian capital has witnessed significant growth in the hotel sector, as it increasingly becomes a commercial, cultural, tourist and business attraction, not only for Colombians but also for the region. It is important to point out that of the total number of foreigners who visited Colombia in 2011, 54% of the latter chose Bogota as their main destination.
Fernando Sánchez Paredes, president of the boutique hotel chain, Blue Doors, is an Industrial Engineer at the Universidad de los Andes in Bogotá and holds a master's degree in Rural Development and Planning and Public Finance from the University of Antwerp in Belgium.

Also included in his curriculum vitae is a postgraduate degree in Strategic Marketing Planning for Hotels of the American Hotel Association Educational Institute and a Diploma in Professional Negotiation from the College of Advanced Studies of Administration, CESA in Bogotá. Sánchez Paredes is considered one of the most important hoteliers in Colombia with more than 43 years of professional life and 28 years of experience in the hotel sector.

Then the president of Blue Doors Hotels tells us a little bit about the hotel boom that Bogota lives in while it makes us a recorder of the city's flaws in the tourist industry. Sánchez Paredes believes that the government has to be more aware of the importance of this sector as a "locomotive for development in Colombia", because tourism is perhaps the country's greatest economic growth.

What was the trigger of the current hotel boom in Bogotá and how has it evolved?

FSP: Particularly two things: first, the security brought by the government of former president Álvaro Uribe and secondly the law that encourages the construction of hotels in Colombia and the possibility of having thirty years of tax exemption for New hotel projects. For the first time in 30 years, a national government was aware of the importance of the tourism sector in the economic development of the country.

Our industry will continue to evolve in the future in an impressive way. In Colombia today we have a 'Bonsai' tourist industry and now what will happen, already started in fact, is the great expansion of this sector, which will become a super locomotive of the regional and urban development of the country and, as such The main export services industry.

Viewed from a global historical perspective, within economic development and the classification of economic activities of the countries, the stage following, after industrialization and agro-industrialization, is the great growth of public services provided by the state and the Service sector. What we are witnessing in the developed nations of the world is the creation of the experience sector.

2. Does the hotel boom include all hotels or some type of hotel in particular?

FSP: There are many niche markets that require different hotel styles. What hoteliers have done is to develop products for different customers depending on their needs. For example, the hostels offer a very cheap service for students and from there up there are at least 30 different types of hotels to reach the high luxury that already began to settle in Bogota as it is the JW Marriot Hotel and ours Chain Blue Doors, 93 Luxury Suites. Also the Starwood W and will soon arrive the Four Seasons. With this, Bogota already enters the big leagues.

3. What are the main markets that come to Bogota?

FSP: The market segments that come to us, basically, are three. The first and the largest is composed of men and women who come for business (60%); In second place are the groups that come by conventions with 30% of the game and finally those people who visit us by tourism add up to now only 10%.
With all that happens nowadays the tourism sector is becoming more important every day. Business executives will remain the main market for many years. However, groups of conventions will begin to take more force, especially in 2016 when Corferias opens its new large convention center.

4. What do you think is needed to strengthen and maintain tourism in Bogotá?
FSP: We must improve two key aspects for tourism to reach Bogota: security and cleanliness. We need to choose a mayor who is a good manager of companies; That manages well the utilities of the city and that, mainly, thinks to give us security.

Now Bogota once again became a dirty city, where one goes through the historic center and unfortunately encounters the pollution that the inhabitants of the streets generate daily. These people have nowhere to sleep and have the public space as if it were their home. It is the government's responsibility to provide them with a safe and dignified home.

5. What aspects of Bogota could negatively affect the hotel boom and how can they be counteracted?

FSP: Security, cleanliness and policy instability create a major urban disorder that is about to wipe out the entire city.

However, the economy is growing and is the most important in the country. The entrepreneurs continue betting to this city and above all to develop the industry of the experiences. On the day we choose a mayor to govern as it should be, we would have to convert the Candelaria, just as Cartagena did with its walled city, into a walking area as well as a large shopping center, where architecture is also preserved Of the homes and there is activity at night.
In addition, we must begin to take care of the facades, because again they are full of mamarrachos and publicity. Thus the city looks horrible; That is not allowed in any civilized city in the world.

6. What are the benefits of the hotel business from the private sector?

FSP: The tourism sector is extremely important to the economy. The generation of employment in this sector does not represent a high cost as in other industries. For each room we build, we create a direct job and two indirect jobs, which generates growth in a very fast and impressive way.

The type of worker we require is relatively less expensive when it comes to training and the influx of foreigners into the country makes us a great exporter of services and a generator of foreign exchange.

Hotels are great triggers of urban and regional development. When they are built, they generate large urban renovations and impact other important sectors such as commerce, restaurants and transportation.

7. How profitable is the hotel business? Is it an activity for all or how much capital do you need to be a part of this?

FSP: It's a very profitable business for everyone. If you generate savings you can build tourist destinations. Advanced countries grow on the basis of savings. They arise when people, especially young people, begin to think about the future and know that it is imperative to make capital for old age. I believe that today, young Colombians have become more aware that for every 100 pesos they earn, they have to save at least 10 or 15 pesos.

And that money, where can they invest it? The safest is the investment in real estate and there is the hotel. In real estate can be invested in several different sectors: in premises in shopping centers; In offices and hotels. Well, the hotel shows that in periods of more than 10 years is the one that yields more profit This generates a rate above 18 to 20% per annum, adding the monthly income to the valuation.

8. What is lacking for Bogota to continue growing in this sector?

FSP: We lack a good mayor; A tourism development plan; Fix the issue of security and of course cleanliness; Improve mobility. This city, today, in 3, 4, 5 star hotels has 15,000 rooms. In 10 years we must have 30,000. The new El Dorado Airport is reaching its peak in 2015. We need an airport that moves 60 million passengers by 2020 to become the transport hub in South America.

9. Which Latin American country would be a model in tourism?
FSP: At this moment, for me, those who are more advanced are the Chileans. Santiago de Chile is the most beautiful city I have ever seen. I see her growing spectacularly. It produces envy! It has tunnels of 3 and 4 km of length that cross the city; it's clean; There are no stalls and there are boulevards with sidewalks full of well maintained plants. The Bogota of Gustavo Petro is full of holes and is a disaster. It turns out that the last mayor had all the money to fix this and left him in the bank for sheer inability to manage.

But it is that all the cities of Latin America are leaving us behind: Quito and Lima are beautiful cities that are well managed. There is a very famous book on city administration and security, which is called "Fixing Broken Windows: Restoring Order and Reducing Crime in Our Communities" by Kelling and Coles, which explains the theory that if a block leaves a Abandoned house then someone comes, throws a stone and breaks the window. When people see the window broken, then throw the garbage in front; Then come two thieves and live there and it becomes a perfect setting for organized crime. Therefore do not allow broken windows: keep the cities and neighborhoods immaculate.

10. What are the benefits of building hotels for the city?

FSP: The tourism industry is the industry without chimneys. Unfortunately the people who make the legislation in Bogota prohibit building hotels in 80% of the city, which leaves us with no space to build a hotel today. On the contrary, in all cities of the civilized world, they do the opposite: they drive the construction of hotels, as these are a set of luxury rooms which generate almost a direct job per room and two more indirect jobs.

The United States learned many years ago that the most important industry to mark economic development is tourism. It is very interesting to know that in this century, in the United States, it is no longer said "if General Motors is doing well, the United States is doing well", now the saying is: "If tourism is good, the country is good" ….

11. What is a boutique hotel and long stay service?

FSP: There are different types of hotels created to meet different needs. A conventional hotel is made for people who are going to stay a few days: 1, 2 or 3 nights. But if the guest plans to stay for more than 3 days, it is better to stay in an apartment from 50 to 130m2. This in terms of hotel is a suite, where the guest finds different spaces such as: a separate bedroom, living room with fireplace and dining room, a full kitchen, social bathroom and two or three additional bedrooms depending on the size of the group. Each day the hotels receive more families with children.

The chain hotels, the first thing they do is standardize the spaces and the decoration. This makes them practically the same everywhere in the world. There are certain clients, who always bore identical hotels and it is they who prefer to stay in a boutique hotel.

A boutique in commercial terms is a unique and exclusive store, which offers special products, sometimes made by hand, for a specific audience. For this segment the selling price is not more significant. What really matters is the fact of being able to acquire and possess something that is unrepeatable. Our boutique hotels are all different, unique and unrepeatable. For example we have one where each room was operated by a Colombian artist (104 Art Suites). In another all the suites are dedicated to celebrities, (Celebrities Suites). Jazz Apartments pay tribute to this musical genre and its decoration revolves around it. And so on..

12. How do you decide to venture into the model of boutique and long-stay hotels?

FSP: I went for 13 years manager of the Hoteles Royal chain. While conversing with my guests, who were staying for long stays in the hotels, I noticed that they had many discomforts because of the little offered by a conventional suite, where there is no kitchen, no large fridge or a guest bathroom. For example, a family with young children had no where to heat a bottle. When I decided to become independent, I looked for this niche market, which was not well attended and we were the forerunners of the apartment boutique hotels for long stays in this city.

13. What advantages and disadvantages does this model of hotels have for the entrepreneur? What are the risks?

FSP: It has a certain complication in the sense that in each building we have 40, 50 or 60 investors, to whom we must respond with a significant profitability at the end of the month. Fortunately we have been giving the best returns on the market for over 10 years. That is why we are permanently called to operate new projects.

14. As we mentioned earlier, Colombia experienced a strong period of violence that affected tourism. What lessons were learned in managing the hotel industry?

FSP: That we urgently need to achieve peace. The number one lesson is that living in a country with violence is a disaster. I was born in the year 50 and never in my life have I been in Colombia in peace. The teaching is that we need governments that work. It is like a vicious circle because it is about educating people but here money is not invested in education and because there are no educated people democracy leads us to choose bad rulers.

Those people who are chosen, when they come to power, are corrupted. Drug trafficking has corrupted the whole society and that robs the money of the taxes. When one manages to have administrators like Peñalosa and Mockus in Bogotá, one perceives an impressive transformation. It begins to notice that what we pay in taxes is being invested in works. During these administrations it was possible to cover all the gaps in the tracks and to widen the streets. We currently need 40,000 police in Bogotá and we have only 12,000. A good administration has to know how to solve this issue to give us the security we deserve.

15. What effects will the hotel sector have on a peace agreement between the government and the FARC guerrillas?

FSP: First a huge challenge: to handle well the postconflict. There must be a great investment to educate the 10,000 guerrillas and 13,000 militiamen. For the hotel industry the great challenge is to develop the best corner lot in the world, building hotels in all the coasts and throughout the country.

In the Caribbean Coast what will happen is that from Urabá to Cabo de la Vela, resort-type hotels will be built, creating a resemblance to the Mexican corridor of Cancun-Tulum, which today already has more than 40,000 Rooms built: three times more than we have in Bogota.

We have the most phenomenal ecotourism product in the world: the jungle area. We could bring millions of people to know the "cambuche" where they were held for six years in Ingrid Betancourt. So, for those of us in the tourism industry, what is coming is to make Colombia a world tourism power. A peace agreement would be a great opportunity to make a well-developed tourist development and turn this industry into the main locomotive of the national economy.

16. There are people who point out that the hotel sector is not good, that is, it does not produce much profit or offer a better quality for the city. For example the case of Cartagena, a city that lives on tourism.

What is missing so that in reality the hotel sector, which today is growing rapidly in Bogota, helps society and produces employment and a better quality of life?

FSP: A good public administration where the governors know how to design and execute development plans and understand how the cities of the future are built. We need the public administration to guarantee the private sector that the money is not going to be lost and will be well invested.