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Venezuela’s solution to a collapsing economy and rampant violence: Woo tourists

Venezuela is looking to tourism to boost its wrecked economy, but the empty beach in the resort town of Todasana last month underscores how the number of foreign visitors has plummeted. (Anthony Faiola/TWP)

TODASANA, Venezuela — With its oil industry floundering, Venezuela is searching for a new engine of growth for an economy in free fall. The embattled socialist government thinks it has an answer: a future built not only on drilling and roughnecks but also on beach umbrellas and piña coladas.

"Tourism is the oil that never runs out," Marleny Contreras, the nation's tourism minister, recently proclaimed.

Yet for a country saddled with the world's highest inflation rate and rampant violence, becoming a tourist paradise may be as improbable as a new Disney theme park in Damascus.

Amid severe scarcities of basic goods, some hotels here have begun rationing toilet paper. Crisis-battered Venezuelans on local escapes, meanwhile, have graduated from stealing towels to pocketing lightbulbs and even coffee makers. Some resorts force guests to sign contract-like inventory lists and submit to detailed room inspections at checkout.

To keep up with an annual inflation rate of 3,000 percent, restaurants and hotels are jacking up prices almost daily. Depending on how they play Venezuela's rough-and-tumble exchange-rate market, foreign visitors could end up paying next to nothing — or nearly $500 — for the same bottle of Venezuelan rum.

In short, industry experts say, the hospitality sector has become anything but hospitable.

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"Never," said Vanessa Sojo, general manager of El Egua Hotel in this hard-hit beach town 31 miles northeast of Caracas. Business at her cozy resort slid by 80 percent last year, and several days can go by without a single guest.

Her company, like so many others, has been crippled by the difficulty in getting imported goods, which are extremely costly because of Venezuela's devalued currency.

In November, she said, power outages forced the hotel to cancel all reservations for a week — the local grid failed because of a lack of available parts. The televisions in half of her hotel's 18 rooms don't work, she said, because spare parts for repairs are exorbitantly expensive or simply unavailable.

"This is never going to happen," she said.

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Nevertheless, jump-starting tourism is one of the top goals of President Nicolás Maduro and his "Bolivarian economic agenda." Seeking to emulate communist Cuba's success with cashing in on tourism, the government here is making a push to update state-owned hotels and woo investment.

The centerpiece of Maduro's vision: resurrecting the Humboldt Hotel, a cylindrical tower built in the 1950s in the hills of Caracas. In September, the government claimed that a "luxury" makeover of the shuttered resort was 70 percent finished. Although the property was slated to relaunch in December, the month came and went without word of a reopening. This despite a video tweeted by Maduro in which he touted the project as he and his wife dined on lavish desserts at a restaurant near the Humboldt.

"It will be the first seven-star hotel in Venezuela," Maduro promised in the video. "Long live Venezuela!"

Home to the majestic Angel Falls and the longest coastline in the Caribbean, Venezuela as recently as 2008 earned $1 billion a year from tourism.

But that income has disappeared amid a flurry of travel warnings from the U.S. government and European countries. Last year, Venezuela ranked second to last in global tourism growth, according to estimates by the World Travel & Tourism Council — better only than Yemen, and below Libya, Syria and Nigeria.

The decline of the tourism industry is part of a broader economic disintegration reflected in an estimated 15 percent contraction in gross domestic product last year. The crisis is partly linked to oil, which accounts for 90 percent of the government's revenue. Global oil prices are sharply lower, and output here has plummeted as the industry buckles under the weight of corruption, neglect and a flight of expertise. But critics also tie the economic nosedive to maneuvers by Maduro — the handpicked successor of left-wing firebrand Hugo Chávez, who died in 2013 — to establish near-dictatorial powers.

Despite the government's iron hand, street crime is surging. ­Locals who can afford it are outfitting their vehicles with bulletproof glass and armor, and traveling in caravans on the bandit-infested highways. In 2017, 53 people a day were killed in Venezuela, according to the Interior Ministry, making it one of the world's most dangerous countries.

"The biggest problem now is security," said the owner of a midsize hotel in the seaside town of Chichiriviche, who spoke on the condition of anonymity for fear of government reprisals. "Foreign tourists are not going to come if they think they're going to get killed."

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His family-owned hotel, he said, was filled with Europeans and Americans as recently as two years ago. But the foreigners have mostly stopped coming. A Belgian tourist did show up last April. But he was spotted in town, the hotelier said, and one day after he checked in, six masked gunmen barged into the hotel lobby. They forced a front-desk clerk to take them to the man's room.

"It was horrible. They stole everything," the hotel owner said. "His iPhone, his clothes. Everything."

At the same time, he said, his hotel has been facing another kind of security threat — from its Venezuelan guests. Last summer, he said, lightbulbs had become so scarce in this country that guests were stealing them from the hotel rooms. They were also taking hard-to-afford imported appliances and spare parts from units with kitchenettes, including blender blades and coffee makers.

"The guests were going rogue," he said.

In response, he said, the hotel put in place a new policy, using detailed room inventory lists with inspections at check out.

"It's sad that it's come to this, but that's Venezuela," he said.

On the resort island of Margarita, menu prices are soaring at the renowned local eatery Juana La Loca. Owner Carlos Guerra said local fishermen are hawking their catches for dollars to restaurateurs on nearby Aruba and Curacao, so competing for seafood means paying sky-high prices in Venezuela's near-worthless national currency. The spiraling costs are reflected on his menu: One signature dish — octopus in a delicate tomato and olive sauce — cost 35,000 bolívares a year ago. Now, it's 750,000 bolívares.

"A dinner here can now go from 700,000 to 800,000 bolívares per person, without alcohol," he said. "If you drink cocktails, it could be 1 million. With wine, 1.5 million to 1.8 million."

Worth considering: A 1.8 million bolívar dinner is equal to more than two months' salary at Venezuela's minimum wage.

For those tourists who aren't put off by the crime, the shortages or the sight of people clawing through garbage cans for food, there is still one more problem: getting here.

Only 15 international airlines are still flying to Venezuela. More than 15 others have pulled out in the past two years, citing economic concerns and security troubles, including stolen luggage at airports. In March 2016, an Egyptian man was killed during a robbery at Caracas's international airport.

Airlines say the government has withheld hundreds of millions of dollars in proceeds from local ticket sales.

"The government claims it wants to encourage tourism, but instead of attracting tourists, it drives them away," said Julio Arnaldes, president of the Venezuelan Association of Tourist Wholesalers.

Venezuela's Tourism Ministry did not respond to requests for comment. But William Castillo, a Venezuelan government spokesman, conceded that the country faces significant hurdles.

"When it comes to personal security, there's a lot to do," he said. He added: "Airlines have left for no reason, and this goes against tourism projects." But, he said, the government is seeking to increase tourism investment and international flights. Then, he said, "many people will be interested and excited to come" to Venezuela.

If they can get here, foreign visitors face dizzying hurdles, as well as opportunities, in the hyperinflationary economy. A 700 milliliter bottle of Diplomatico Reserva Venezuelan rum, for instance, costs 1.5 million bolívares. At the legal rate available in exchange houses, that's about $448. But at black-market rates from street money-changers, it's about $9.90.

In Caracas, luxury hotel suites can cost as little as $40 a night at black-market rates. Yet bargain hunting doesn't seem to be a big draw. Five major hotels queried recently in the capital said they had not one foreign guest.

Some die-hards are still making it to resort enclaves, including the picture-postcard beaches on the Venezuelan islands of Los Roques. Yet even on meticulously planned package tours, things can go wrong.

This past week, for instance, Matt Keenan, a 36-year-old New Zealander, had to stay overnight in Caracas after missing his domestic flight to Los Roques, where he had booked a kite-surfing vacation. The exchange rate used by his foreign credit card company could have resulted in a one-night hotel stay costing hundreds of U.S. dollars. So his tour operator contacted a friend of a friend, who agreed to put Keenan up for the night in a private home.

One night in Caracas, he said, was more than enough.

"I mean, you see the military everywhere, and you definitely fear being a victim of violence, a robbery or a kidnapping," he said. "There's no way I could've made it here without local people helping me."

Rachelle Krygier contributed to this report.

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