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Weekly Report - 14 May 2020 (WR-20-19)

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Uruguay seeks innovative approach to revive tourism

The government led by President Luis Alberto Lacalle Pou has managed to control the outbreak of Covid-19 in Uruguay so far, keeping fatalities from the coronavirus down to 19, with just over 700 confirmed cases. But domestic demand has plummeted during the lockdown and the economic outlook for the country is challenging.

Tourism, one of the mainstays of the economy, generating 8% of GDP and 11% of jobs, has been particularly hard hit. The tourism minister, Germán Cardoso, recently acknowledged that being “the only sector registering absolutely no economic activity” meant that tourism was facing “enormous difficulties”. Cardoso is working with the industry in an effort to support tourism operators and safeguard jobs.

The tourism and public health ministries have formed a working group with representatives of the Cámara Uruguaya de Turismo (Camtur) to draw up a draft ‘protocol of action’ for the ‘new normality’, such as improved hygiene and biosecurity in hotels and other accommodation, and restaurants. They aim to present it to President Lacalle Pou for approval imminently.

The difficulty facing Uruguay is that non-essential foreign travel is likely to be one of the last restrictions to be lifted. Even if restrictions were completely removed in time for the start of the southern hemisphere summer in November, the number of Argentines visiting Uruguay (comprising more than 50% of the 3.5m foreign tourists in 2019), is sure to be down, not to mention tourists from further afield.

As such, Cardoso announced this week that the initial focus of the industry would need to be on boosting domestic tourism. He said there are around 250,000 Uruguayans who travel abroad each year to go on holiday who would not be able to do so at present or for the foreseeable future, with ports and airports closed. Cardoso also revealed that the government is seriously considering pushing all public holidays in Uruguay to either a Monday or a Friday in order to enable people to escape for long weekends to provide a lift for domestic tourism.