Colombia’s tourism boom: profits flow, but hotels struggle

Colombia’s tourism sector is surging, fueled by a visitor influx that’s already generated nearly $9.43 billion in revenue – eclipsing even pre-pandemic petroleum earnings. But beneath the surface of this apparent success lies a troubling reality: the traditional hotel industry is faltering, grappling with rising costs and a shift towards alternative accommodation.

A tale of two trends

Initial data suggests 2025 will see almost 6 million international visitors, a remarkable achievement. However, the benefits aren’t being evenly distributed. While overall economic activity is bolstered by tourism, smaller hotels and eateries have barely expanded, growing a paltry 0.5% last year – a stark contrast to the country’s overall economic growth of 2.6%.

The rise of vacation homes

The most significant disruption is the explosive growth of vacation rentals. After 2020, short-stay properties ballooned by a staggering 635%, far outpacing the modest gains of conventional hotels, which saw just a fraction of that increase. Now, over 76,000 vacation units are officially registered, dwarfing the approximately 20,000 hotels. The landscape has fundamentally shifted – travelers are increasingly opting for the independence and, often, the lower prices offered by private homes.

Margins under pressure

This trend is directly impacting hotel profitability. Rising public service fees, coupled with labor law changes and increased minimum wage requirements, have pushed operational costs up by 10.3%. Consequently, hotels have been forced to reduce staff, with nearly 13,000 positions eliminated over the past three years – a trend exacerbated by weaker consumer interest, particularly in recreational travel. January and February of 2026 saw the lowest job counts in half a decade.

Security concerns and a diminished appeal

Adding to the challenges is a worrying rise in insecurity. Kidnappings surged 211% in the second half of 2025, with violent crime climbing 28% in major cities. This deterioration of safety has driven down hotel reservations and increased insurance premiums, making operations increasingly difficult. Cotelco reports that visitor numbers have fallen nearly 8% due to heightened security concerns – a reactive, not proactive, response to a deepening problem. Road blockages, now a routine occurrence, have caused approximately $11.3 billion pesos in damage and severely hampered travel plans.

A future at risk

Despite the impressive visitor numbers, Colombia’s hotel industry is facing a difficult path. The focus on short-term rentals, coupled with economic headwinds and escalating insecurity, suggests a future where established lodging businesses continue to struggle to capture the lion’s share of the tourism boom. The data paints a contradictory picture: growth on paper, but little improvement in the sector’s bottom line. The nation’s reliance on tourism, once a bright prospect, now feels increasingly precarious.