What can be expected of the state? Public policy and entrepreneurs during the beginnings of tourist activity in Peru
(1930-1950)

FERNANDO ARMAS ASÍN

Universidad del Pacífico, Perú

[email protected]

Abstract. This article analyzes the evolution of public policies for the promotion of tourism in Peru in its early stages, as well as their relationship with local entrepreneurs. It is argued that business people supported such initiatives as long as they did not conflict with their economic interests. When such conflicts occurred, the reaction was predictable. This study contributes to a better understanding of the beginnings of tourism in Peru and the characteristics of its managing agents.

Keywords: State; public policy; tourism policy; tourism; Peru.

Acronyms

AHORA Peruvian Association of Hotels and Restaurants (Asociación Peruana de Hoteles y Restaurantes)

APAVIT Peruvian Association of Tourism and Travel Agencies (Asociación Peruana de Agencias de Viajes y Turismo)

APRA American Popular Revolutionary Alliance (Alianza Popular Revolucionaria Americana)

CANATUR National Chamber of Tourism (Cámara Nacional de Turismo)

IPC International Petroleum Company

ILO International Labor Organization

Panagra Pan American-Grace Airways Inc.

TCP Touring Club Peruano

1.Introduction

Historical studies about the development of tourism in Peru have only just begun to emerge (Armas Asín, forthcoming, 2017; Rice, 2017). The sector has received little attention from researchers, unlike the many economic and social spheres that have inspired a range of studies. This is particularly conspicuous given the abundance of works that have investigated the history of tourism in the West and in Latin America from a variety of different approaches and perspectives, while also exploring the state’s importance to the sector after WWI, when it began to expand steadily.1 Studies on interwar France, Britain, Germany, and Spain, as well as those focusing on Argentina and the other Southern Cone countries, show how state publicity, road and hotel construction, and preferential tax treatment for the private sector were central to tourism development.

This historiography has been accompanied by an interest in investigating the history of tourism businesses.2 Contributions have focused on the development of hotel companies, airlines, travel agencies, and railways. However, it should be noted that this is a field that remains understudied. Meanwhile, other works have analyzed the activities of associations with links to the private sector in Latin America – such as touring clubs – which promoted certain state policies or pursued specific objectives (Piglia, 2008, 2012, 2014).

Within this framework, the aim of this article is to delineate early state activities to promote and foster tourism in Peru in the context of the sector’s development in the 1930s and 1940s, and to explore the state’s relationship with the interests of the nascent tourism business community.

The working hypothesis is that at that time, as the sector’s potential became apparent, tourism businesses emerged – grouped around the hotel industry, entities such as the Touring Club Peruano,3 or certain media outlets – to lobby for state promotion and development activities. This led to consistent and ever-increasing government intervention through a range of public policies. Still, in the view of this business community, the state served to complement sector development, opening up markets and supporting their consolidation, but was no substitute for private investment. This set the boundaries of collaboration between these actors, and was a factor in the discontinuation of public involvement by the end of the period studied.

2.The first years of collaboration amid the crisis of the 1930s

The collapse of Augusto B. Leguía’s government (1919-1930) ushered in a period of political instability that lasted until late 1931, when Luis M. Sánchez Cerro was elected president (1931-1933). This instability, primarily associated with the world economic crisis, affected domestic tourism in Peru – a middle- and upper-class pursuit originating in Lima and other major Peruvian cities – as well as the small, sporadic influxes from neighboring countries or North America (Armas Asín, forthcoming, p. 170).

The crisis prompted international shipping companies to develop strategies to increase passenger transport as a way of counteracting the decline in global trade. Such was the case of Grace Line, a firm that built 19 cruiseliners, one of them bound for the southwest Pacific coast. Grace Line developed an extensive publicity campaign about Peru in the United States featuring articles with paid-for advertising content in newspapers and magazines, sent a representative, Agustín Agüero, to Peru in a bid to persuade Lima’s politicians and Cusco’s regional authorities to support tourism, and assisted the Touring in its U.S. publicity campaign, which was centered on asking hotels to distribute promotional brochures about Peru (Touring Club Peruano, TCP, 1931, VI-72, p. 25). Meanwhile, the steamship Reyna del Pacífico took a group of tourists to Peru in 1932, as part of its Liverpool-Río-Buenos Aires-Chile-Peru itinerary. One member of the group was Susana Berce, president of the Bence Tourist Company, who took the opportunity to meet with Peru’s Minister of Foreign Relations (TCP, 1932, VII-73, p. 14) and expressed an interest, common to international operators, in removing bureaucratic obstacles to doing business in the country.

These interests were pursued in Peru by Touring, which, over the previous decade, had insisted on the need both to promote internal tourism through roadbuilding and to attract tourists to Peru. This was part of a trend in which several South American touring clubs sought to commit their governments to these types of activities (Armas Asín, 2017, pp. 113-137). In 1931, Touring called upon the state authorities to allow those visitors with “in-transit” status for permission to remain in Lima for longer than 24 hours, which left them with just enough time to admire a few churches and public buildings. At the same time, Touring argued that Lima had the capacity to meet higher demand for accommodations.4 The government was then asked to react, given that its officials had not contributed by way of “an official plan for tourism promotion,”5 nor through “the execution of indispensable public works in some cities in order to build [tourism] up as a national industry.” Although road-building continued throughout the crisis, stretches of the Carretera Central – the country’s major west-east highway – and others penetrating the highlands remained incomplete. The Touring also asked the government to equip the town of Mollendo, the railway point of entry from the coast to Puno and Cusco, with a seaside resort and a casino, and, more generally, that it support the establishment of modern hotels in the area;6 it also acknowledged that it was private actors such as Grace Line, the Peruvian Corporation (a railway company), and maritime agencies (Wagons-Lits Cook and Expreso Villalonga had offices or agents in Lima) that promoted tourism to Peru.7

These efforts bore fruit in the new Congress (which began in December 1931) when the representative for Cusco, Victor Guevara, argued that Peru should follow the lead of Chile, which was building a modern airport in Valparaíso to encourage tourism following the collapse of international trade and the consequent crisis that hit its port. His efforts culminated in the approval of two laws: Law No. 7660, which secured funding to build an aerodrome in Cusco, allowing for “direct aeronavigation from Lima”; and Law No. 7663, which exhorted the state to “address the establishment of an influx of tourism to Peru and especially to the city of Cusco,” mandating the creation of a Tourism Section within the Ministry of Development. However, it was stressed that to complement these efforts, Touring would remain in charge of tourism promotion.8 But Víctor Guevara wanted to go further, envisaging the creation of a National Tourism Board as a body governing various national and regional institutions. He also believed that, utilizing the aerodrome, Lima-Cusco and Cusco-Arequipa flight routes could be established to facilitate regional tourism integration. Guevara also proposed a local and national plan: “in regard to how to establish the tourism movement, I think two aspects have to be considered: one, the usual and ongoing; and another brought about by events [...] in which major errors of the past would be made.”9 As we will see, the creation of cultural events aimed at attracting tourists to the southern Andes was already on the minds of some regional public figures of the era.

To mark the opening of the aerodrome – in truth a landing strip – Touring invited the Faucett and Panagra10 airlines to arrange an inaugural flight to Cusco, in which each would put up a plane; however, only the latter company did so in 1932, by way of a secondary Arequipa-Juliaca flight. In the beginning, demand for flights to Cusco was slow to pick up, and tourism development took time.

The government, for its part, was locked in a political struggle with the American Popular Revolutionary Alliance (Alianza Popular Revolucionaria Americana, APRA). In April 1933, President Sánchez Cerro was assassinated, bringing all public activity to a halt. It was only when Óscar R. Benavides (1933-1939) became president that new initiatives began to emerge.11

3.The convergence of opinions on state support: hotels and roads

During the Congress of 1933 – the same one as that began in 1931 – Víctor Guevara secured the passage of a law that authorized a series of works as part of the 400th anniversary of the Spanish foundation of Cusco. These included the clearing of the path to Machu Picchu and a small hostel on the site, at a cost of 150,000 soles (the state had completed the rail connection from Cusco to Machu Picchu a decade earlier), the renovation of the city’s colonial buildings, and budgetary provisions for the work of the Archaeological Institute.12 Touring publicized these efforts in an article on May 1934, summarizing them in the headline: ¡Visitad Cuzco! (”Visit Cusco”). The program for the 400th anniversary was intensive, and included the opening of the aforementioned hostel in Machu Picchu – today known as the Belmond Sanctuary Lodge. In addition, from May 13 of that year, Panagra inaugurated a regular flight between Lima and Cusco.13 Cómo viajar al sur (“How to travel to the south”), a chronicle from 1934, recommended routes to take and hotels to visit in Peru, placing emphasis on the Ferrocarril, the Alojamiento Imperial, the Colón, and the Anexo Colón hotels in Cusco, as well as the Pensión Royal in San Agustín. At that time, one could take the train to Machu Picchu at a cost of 13.20 soles per round trip. It was also possible to go by car.

All of this seems to speak of a highly dynamic tourism sector, but placed in perspective the issues involved were complex. This became apparent when, in 1933, Touring opened tourist information offices in the Hotel Bolívar in Lima and in the Washington D.C. headquarters of the Pan-American Union, where it helped Grace Line to promote the movie Cuzco, el imperio de los incas, which that company was showing throughout the United States and Europe. Through its contacts with the public at these sites, Touring learned that U.S. tourists wanted less complicated immigration paperwork for entry as well as better and more comfortable accommodations (TCP, 1933, VIII-82, p. 5). At the same time, the public was becoming increasingly aware of the limitations of Peru’s tourism facilities.

The Argentine director of the international wholesaler Exprinter Travel Service visited Lima in 1934. The firm sold railroad tourism packages between Argentina and Chile and sought to add Peru as a destination, but had second thoughts after observing the substandard disembarkation conditions in Mollendo, the paucity of decent accommodations outside Lima, and the lack of a road between Cusco and Lima. But as far as Peruvian politicians were concerned, the 400th anniversary of Lima’s foundation in 1935, and the domestic tourism these celebrations were expected to generate, would also be an excellent opportunity to attract visitors from abroad. Yet those in the know expressed concerns about the 1,200 tourists scheduled to arrive on cruise ships, since the good hotels – the four in Lima intended for tourists – would clearly be filled to overflowing during their visits. And if this was to be the case in the capital, little could be expected of the rest of the country, especially the south. If each ship brought 300 or 400 passengers, where would they stay in cities like Mollendo or Arequipa? This was the main reason why, despite the infrastructural advances in the southern Andes and the best efforts of the shipping lines, tourists – mainly North Americans – arrived only in only small groups rather than large influxes.14

The question of lodgings could only be tackled by improving them and expanding the infrastructure. In 1933, hotel owners, backed by Touring and other organizations, set up the Union of Hotel Owners of Peru (Sindicato de Hoteleros del Perú), comprised of 68 hotels and inns in Lima and elsewhere in the country. The board had representatives from the Bolívar, Maury, Leon’s, and Leuro hotels.15 Thus, an association emerged that would channel local private-sector assistance to deal with the existing problems. For these companies, the solution lay not only in providing accommodation, but in addressing the cyclical nature of the business, whereby visitors would arrive and overburden hotels at certain times of the year, only to leave rooms unoccupied the rest of the time. In Lima, the internationally experienced manager of the Hotel Bolívar attempted to combat seasonality by contacting major travel agencies in the United States and Europe (Dargent, n.d., pp. 10-11). But obviously, this was not something that could be replicated by the small hostels of Peru.

The accommodation problems and their cyclical character were also noticed by internal tourists. Domestic flow was on the rise: the Empresa de Turismo de Arequipa, created in 1932 by Alfredo Bellido Talavera, organized a trip to Cusco for Arequipa residents, with successful results. Then, in July 1933, as part of Peru’s annual independence celebrations, the firm arranged a trip to Lima for 480 tourists from Arequipa, Cusco, and Puno. The festivities were also marked by a great deal of travel from Lima to other parts of the country. Touring organized an outing to Canta, and another from Cusco to Arequipa. The central highlands, with rail and, by then, road connections, were a preferred destination for Lima-based tourists. But the experience was not without its problems: in Huancayo, during those same independence celebrations, barracks had to be used as makeshift accommodations.16

Moreover, Touring felt that obstacles to internal and inbound tourism had to be removed, and that this had to be achieved through political pressure. Towards the end of the 7th Pan-American Conference, held in Montevideo (1933), the idea of building a Panamerican Highway – first floated at the 5th conference in Santiago de Chile in 1923 – was revisited. From a Peruvian standpoint, this was especially pressing: the road was to run along its coastline. Of the 3,245 kilometers of coastal road in Peru, 413 were in good condition, albeit with a gravel surface; 2,727 were deficient; and 105, in the Arequipa area, were yet to be completed. In 1934, Touring was insistent that this commitment be honored. The other matter that interested the organization was the agreement reached at the Montevideo conference, aimed at eliminating bureaucratic barriers to tourists and creating a region-wide tourism passport. This would be more difficult to achieve, but was a necessary part of the drive to attract visitors from other countries.17

Meanwhile, Harold Harris, manager of Panagra, highlighted the impact that inbound tourism could have on business. The Wagons-Lits Cook agency, Grace Line, and other tourism companies, as well as Panagra offered all-inclusive trips to Peru, making heavy use of brochures distributed to North American agencies, while also appealing to people in the Southern Cone of South America and to North Americans who worked on the Panama Canal. Their material included a list of sites, attractions, and accommodations that attested to the poor quality or outright lack of hotels.18 Thus, thanks to the flights run by Panagra, Faucett, and Aerovías Peruanas, the possibility emerged of sustaining an influx of small groups of tourists that could be readily absorbed with existing infrastructure.19 There were moves afoot to create a public agency to oversee policy implementation, just as existed in other countries, amid recognition that entrusting this to Touring and a second-tier entity such as the Tourism Section was no longer sufficient. In 1936, 4,929 foreign tourists visited the National Museum and the following year, it was estimated that more than 2,000 North Americans came to Peru. The press reported that the intellectual Alberto Giesecke had submitted a hotel-building project to Touring, drawing on private capital with government exemptions. Meanwhile, another intellectual, José Sabogal, called for continued solutions to the ongoing road problems, and for a state-operated governing body. Writing in the newly launched Turismo magazine, he advocated a consistent promotional role for the state.20

To stimulate debate, in 1937 the magazine highlighted the case of the cruise ship SS Columbus, which berthed in Mollendo with 600 tourists, of whom only 160 made it to Arequipa because of the limited rail capacity. The hotels in both places raised their prices, chaos ensued, and the 400 tourists forced to stay on the ship were left disenchanted.21

The Benavides government (1933-1939) – authoritarian in its clampdown on populist parties, such as APRA, but remembered for its eagerness to expand the internal market and develop an active social policy – tried to tackle some of these problems. On the matter of the roads, it launched a three-year plan to pave 3,000 kilometers and to build or rebuild another 5,000 kilometers that were deemed essential. Among other achievements, this plan finally connected Tumbes and Tacna with a single roadway. Thus, the Panamerican Highway got off the ground, with the first paved section completed in 1938.22 These works, of course, fulfilled more than just the needs of tourism. Shortly before, the government had passed a law that exempted roads from taxes and levies.

In addition, Benavides issued Law No. 8708, which allowed the state to build and open “hotels, hostels and other establishments that contribute to increasing tourism,” while also providing for its involvement in training staff to serve tourists “at hotels, hostels, and restaurants.” Thus, decisive steps had been taken to create a tourism infrastructure in places where there was none, and to complement that already in existence – such as the small, state-run hostel in Machu Picchu. To this end, a budget of 40 million soles was allocated. Moreover, there was a proposal to create a school to train workers for hotel and restaurant services.

These actions should be analyzed as part of a trend, both in the country and the Latin American region, towards a growing state role in the social and economic spheres, with a view to defusing local political tensions and developing the internal market (Drinot, 2016; Thorp & Bertram, 1985). It was in this context, in Peru as elsewhere, that the pressure applied by local organizations linked to tourism had an impact. Likewise, the influence of the Panamerican Highway on authorities should not go unacknowledged (Scarzanella, 2002, pp. 13-14). As mentioned earlier, at the 7th Pan-American Conference in 1933, tourist and vehicle passports were proposed for Pan-American Union member states, each of which were called upon to set up a public “office or department” to promote and develop tourism. Although the Peruvian state had already taken steps in this direction
– indeed, in 1937, it created a working committee for tourism planning – the 8th Pan-American Conference, in 1938, took place in Lima itself and was another occasion when calls for public tourism policies were reiterated. In addition, the ground was prepared for the 1st Inter-American Tourism Conference, held in San Francisco in 1939. At this event, plans were made for an inter-American association of hotels, and another for automobile clubs. Encouraged by this dynamic, many South American states invested in road networks and information offices, established tourism departments, and in some cases – such as those of Uruguay, Chile, and Argentina – allocated resources to hotels (Piglia, 2014, n.d.). In the Peruvian case, after the enactment of Law No. 8708, new tourist hotels began to appear in Trujillo, Arequipa, Piura, Huánuco, and Cusco (where the Ferrocarril Hotel, operated by the Peruvian Corporation, was insufficient), among other cities. Finally, in 1939, close to the end of its term, the Benavides administration passed Law No. 9031, which imposed taxes on motor vehicles and reiterated Touring’s mission of tourism promotion, assigning it an annual subsidy of 70,000 soles to this end.23

Seen in perspective, the efforts of the Benavides government oriented public policy toward tourism, which was just developing. The private sector welcomed the hotel creation law, in that it allowed foreign tourists to stay and tour the country rather than arriving on cruise ships and remaining in and around the capital, as had been the case up to that point. They also spoke approvingly of the law that enabled “free passage” on roads.24

In 1938, the Museum of Archeology received 9,219 visitors, of whom 3,473 were foreign tourists. Together, Lima’s four museums (Archeology, National, Bolivarian [Magdalena] and Italian) were visited by 12,025 people: 4,256 foreign nationals and 7,769 Peruvians. The 8th Pan-American Conference and its numerous delegations, many of whom visited Huaral from Lima, led to several investments, including upgrades to the Larco Herrera Museum25 and to the Bolivar hotel, which added another two floors to the four it already had. These investments covered domestic as well as inbound tourism, with special rates introduced for Peruvian holidaymakers (Dargent, n.d., pp. 10-11)26. Meanwhile, the Wagons-Lits Cook agency finally opened its own offices in Lima, in the Jirón de la Unión; Faucett extended its domestic flights to the north and south of Peru; and the Royal and Jacobs hotels in Chiclayo and Trujillo, respectively, introduced new tourism services.

In July 1939, coinciding with national independence celebrations, the 1st Great National Fair (Gran Feria Nacional) in Lima was seen as another opportunity – this time to attract visitors from the Peruvian interior to the capital. For its part, Touring, under the auspices of the government, organized three excursions to Tingo Maria for 200 employees of Lima-based private firms. The Banco Popular del Perú, which was owned by the Prado family and had the largest number of branches in the country, also joined the bandwagon, publishing a guide that showed its customers different tourist destinations around the country (Banco Popular del Perú, 193727). In a world consumed by the looming start of WWII, journalists such as Alfonso Tealdo were hopeful that North American tourists would seek refuge in the south, and that a promising future awaited the sector.28

Peruvian businesses, aided by their international counterparts and publications such as Turismo, were proof of how local interest groups were emerging to diminish the intermediary role of Touring in relation to the state. In December 1939, the club’s members voted to change its name to the Touring y Automóvil Club del Perú, concentrating on the promotion of motor vehicles and routes throughout Peru. On this basis, and with government help, that same year it organized the first of three so-called President of the Republic car races, started producing route maps, and emphasized promotion of the automobile as a way of seeing Peru and having it seen – as its slogan proposed.29

4.Emergence of a state agency: the National Tourism Corporation

Benavides was succeeded as president by Manuel Prado Ugarteche (1939-1945), who kept the focus on increasing the state’s role, social control, and tourism development. In 1940, the Prado government established the School of Tourist Guides (Escuela de Cicerones), and in 1943, the School of Hospitality (Escuela de Hotelería), but most important of all was its creation in 1942 of the Compañía Hotelera del Perú to oversee the tourist hostels in existence or under construction: the hotels of Arequipa (1940), Huancayo (1943) and Trujillo (1943); the hostels of Machu Picchu Ruinas (1940) – the previous hostel, remodeled – Yura (1940), Tingo María (1940), Piura (1943), Huánuco (1943), Nazca (1943), and Cuzco (1944); and the guest house of Chala (1942). Added to these was the hostel of Abancay (1945).30 The government also continued to promote internal tourism and “love of country,” setting up the Information Office of Peru, which was tasked with the promotion at home and abroad of government achievements in the field of tourism. To aid in this endeavor, between 1940 and 1942, it declared tourist zones in Huaylas, Condesuyos, Cajamarca, Lake Paca, La Libertad, Chavín, Puno, Ayaviri, and Lampal, as well as organizing further Great National Fairs after the first in 1939.31

By this stage, criticism of Touring was intense. Although it was charged with producing reliable statistics, these remained non-existent. Apart from providing figures about entries and departures obtained from the state immigration agency, it had done little. The organization was also criticized for its failure to produce a national tourism guide. But Touring did rather better when it came to promoting tourism, having opened an office in Cusco, “with a bilingual employee,” through the efforts of its delegate, José Gabriel Cosio. However, the direct government subsidies to Touring did not achieve their purpose (Valdivia Dávila, 1943, p. 11),32 and by then interest had emerged in generating new spaces from inside the state.

From the end of 1943, on the initiative of Benjamín Roca Muelle (an ex-finance minister), the Chamber of Deputies agreed to support the organization of a new National Congress of Tourism. By 1944, however, “nothing was done,” even though conferences such as the Argentine Tourism Congress provided a model.

During the inter-American trade conferences held in the United States, the future of tourism relations with South America was discussed; towards the end of WWII, economic actors were optimistic about the continent’s potential, with scope for investing in infrastructure and tourist “comfort,” “as up until now we have trusted solely in the intrinsic attractions of the country, believing that they alone will bring us the traveler.”33

Thus, with a change of government and a new president, José Luis Bustamante y Rivero (1945-1948), steps were taken to resolve this delicate matter. Bustamante had come to power with the aim of democratizing the country after years of political repression, and initially enjoyed the support of large sectors of society. His government saw the economic importance of inbound tourism as a way of overcoming currency shortages – due to the tight trade balance and measures favoring national industrialization – in the postwar context, while internal tourism could promote social harmony and leisure for the middle and working classes. Thus, in November 1945, a supreme resolution mandated the formation of a committee to work on a tourism development plan. This ultimately gave rise to the National Tourism Corporation. The committee was made up of Eduardo Dibós, Benjamín Roca Muelle, and Carlos Velarde.34

The new climate also reflected the attitudes of the media, companies, tourism development associations, the state bureaucracy itself, and Pan-Americanism, but above all it reflected an international climate “favorable to this type of intervention, with successful examples of state support of tourism, which showed that this activity could be an interesting source of income and also political consensus” (Piglia, n.d., p. 16).35

Law No. 10556 created the National Tourism Corporation as an autonomous organization and as an official center of control and supervision vis-à-vis private enterprise, responsible for general promotion and coordinating actions in favor of tourism with other state entities, which made it a “plank of economic and social development.” The Hotel Company of Peru (Compañía Hotelera del Perú, previously under the Ministry of Development), the country´s thermal springs, and the School of Tourist Guides were assigned to the Corporation. Its other responsibilities included tourism planning; hotel, railway, and road inspection; organizing national tourism information; and developing domestic tourism, among other areas (Valle, 1947).36 Pedro Bentín Mujica was its first president and Benjamín Roca Muelle, its manager. The latter had close links with tourism institutions: he had been manager of Turismo magazine; oversaw the laws passed by Benavides’s government to create revenue for tourism as well as the Andean excursions organized by Touring; and promoted the national fairs during Prado’s government and the car races of 1939, 1940, and 1941. In addition, he had made attempts to promote the organization of the National Tourism Congress.

The Corporation developed a Tourism Development plan, and on March 17, 1947 its project execution plan was authorized. This entailed the building and expansion of tourist accommodations. So began the construction of its hotels in Tacna, Tumbes, Chimbote, and Iquitos; the hostels in Huaraz (Monterrey) and Tarma; and the guesthouse in Desaguadero, all of which started operations between 1947 and 1954. In addition, the hotels in Arequipa, Huancayo, and Piura and the hostel in Yura were expanded.37

The Corporation likewise acted in its capacity as the governing body of the sector. For example, in conjunction with the competent authorities, and through a supreme resolution, it established that travel agencies must be enrolled in a special register.38 Moreover, it started to intervene in certain public and private sites of historic interest to ensure their conservation or restoration. It also revisited the idea of cataloging artistic works, and was involved in the Peruvian congress’s declaration of Cusco as a national monument. To support internal tourism, in 1946 the Corporation arranged a stay for tourism workers at La Hostería de Chosica followed by two more such visits – to Huancayo and Trujillo in 1947 (Armas Asín, 2006, p. 149).39 Finally, alongside the Ministry of Foreign Relations, it sought to improve immigration services for tourists. As a result, several decrees were promulgated in 1946. They resulted in the following improvements: visas were issued for 90 days, renewable for a further 60 days, and applications could be made by third parties; the pre-departure declaration was abolished; internal travelers were exempted from customs evaluations, and a single visa card was established; and finally, transit visas were scrapped for short-term visitors.40

In 1947, the Corporation launched an official Peruvian tourism calendar and organized the First National Tourism Congress (Alayza Paz Soldán, 1947, pp. 41-73).41 All of this helped to increase the optimism of the economic actors, which translated into continuous private investment. The International Petroleum Company (IPC), which owned a refinery in Talara, established a substantial national network of gas stations, while one entrepreneur invested 25 million soles in a hotel for 600 travelers in Lima – the Hotel Crillón, on Nicolás de Piérola Avenue.42

5.The confrontation with the private sector

In truth, private investment had been continuous during previous years, given the development of the tourist market. The Peruvian Corporation not only promoted its south Andean railroad for visits to Arequipa, Puno, and Cusco, but also advertised its central line for trips to the central Andes and Amazonia. In addition, it consolidated its valuable network of Ferrocarril hotels in Mollendo, Cuzco, Puno, Sicuani, Chosica, and Huancayo, among other locations. Other hotels also opened their doors, both along the railroad routes and elsewhere in the country. Examples included the exclusive Los Ángeles in Chosica (1941), aimed at weekend getaways for the Lima elite, and La Hostería (1944) in Moyopampa, Chosica, owned by Enrique Deacon Mujica, again with comfort and rest in mind. That same year, in Huacachina, the architect Héctor Velarde oversaw the renovation of the Hotel Mossone, until then a small and simple establishment, resulting in the design that it still has today. In Ica, the Hotel Paracas opened, with a capacity for 118 persons, distributed among bungalows for four or eight visitors each. It was intended for those with an interest in natural or biological resources, which were major draws to the area. The TACA airlines introduced a connection with Lima, while the New York-based Waldorf Astoria announced it might open a hotel in the Peruvian capital.43

In this context of entrepreneurial dynamism, the Peruvian Association of Hotels and Restaurants (Asociación Peruana de Hoteles y Restaurantes, AHORA), was created and granted official recognition. From the outset, its objectives were to offer representation as well as information and assistance to its members in the development of their activities, “primarily hospitality.” The previous association of hotel owners had disappeared. The first board of the AHORA was made up of Antonio Bergna, Juan Bertolotto, Vicente Drago, Armando Garivotto, and León Mozart, among others (Cámara Nacional de Turismo, Canatur, 1990).44

The association carried out a range of activities, such as organizing the 1st National Convention of Hotels and Restaurants in 1947, in order to emphasize the importance of tourism and hospitality for the country. That year saw the opening of the Hotel Crillón, run by the Compañía de Inversiones Montealegre Perú S.A. and built by Vargas Prada Ingenieros, as well as the Hotel 28 de Julio, owned by Nunzio Zuccarello and José Carella; this was a first-class hotel with 100 en suite rooms featuring private telephones, with sleeping room for a total of 170 travelers. It was a member of the association.45 In addition, during the same year local tourism operators created the still-existing Peruvian Association of Travel and Tourism Agencies (Asociación Peruana de Agencias de Viajes y Turismo, APAVIT).46

The counterparts of these private hotels were the state-run tourist hotels. On July 17, 1942, by decree, the Compañía Hotelera del Perú S.A. was created. Initially, its shareholders were the IPC, Panamerican Grace Airways Inc., Gran Hotel Bolívar S.A., Compañía de Aviación Faucett S.A., Banco Popular del Perú, and various private investors. This company initially administered the tourist hotels in Tingo María, Arequipa, and Chala, then also the small guest house at Machu Picchu, and then, successively, the other state-run establishments. Its management model entailed administering the accommodations directly or, sometimes, entrusting this task to private administrators, as in the case of the Yura hostel (Turismo, 1942, 70). As can be seen, at this point, it was not state policy to intervene directly in the hotels. But in 1947 the Compañía Hotelera del Perú S.A. passed into public ownership, falling under the control of the National Tourism Corporation, which oversaw a total of 14 establishments. The Corporation invested in the construction of new hotels and the expansion of some existing ones, as we have seen (Valle, 1947, pp. 91-106; Touring y Automóvil Club del Perú, 1951b: 15)47.

There was a good deal of public interest in these hotels, which were seen as investments that contributed to local development and to inclusion in the dynamics of national tourism. Thus, in various parts of the country, the authorities were asked to build tourist hotels. Indeed, starting in 1944 there were demands from Callao for a hotel in La Punta, a beach that many felt should be turned into a “resort.” In this way, it was hoped the area could compete with the rising prominence of La Herradura and, of course, Ancón. In the city of Lima, there were also demands to build a hotel.48 This interest from the capital persuaded the National Tourism Corporation to try to build a tourist hotel on land that the executive branch had conceded for this purpose, by way of Law No. 10843 of February 25, 1947 (Valle, 1947, p. 46).

But not everyone shared the Corporation’s enthusiasm. Antonio Bergna and Juan Bertolotto, president and secretary of AHORA respectively, as well as representatives of the Colmena, Crillón, Residencial and Encarnación hotels, issued a press release for publication in newspapers on April 26, 1947, and addressed to the president of Peru. In it, they asserted “that it is worth keeping the hotel business as an activity limited to the private sector and promoting its development through limited measures, to better serve the interests of a country in the promotion of tourism” (Touring y Automóvil Club del Perú, 1951a; Valle, 1947, p. 46). In their view, which attested to their belief in a subsidiary role for the state, Lima did not need a state-run hotel like those in the provinces. The capital was a market already developed for private enterprise, which did not want any more competition. This was the first problem faced by the Corporation.

6.The collapse of state efforts: the triumph of entrepreneurial liberalism

The following year, 1948, marked the beginning of the end for the Corporation and the state’s enthusiasm for tourism. Though the year opened with some signs of continuity – with the opening of a new landing strip in Pisco, the inauguration of the modern Limatambo Airport, and the creation and upgrading of private hotel infrastructure, including the Colón hotel in Ica and the Nazca hotel49 – the political circumstances of the Bustamante y Rivero regime, which had deteriorated during the first three years, reached a terrible denouement: a coup d’etat, which toppled the president on October 27 and replaced him with the general Manuel A. Odría.

The installation of Odría changed the outlook for the Corporation. In the immediate term, its leadership was removed and Ernesto Cánepa Sardón, originally from Arequipa, was put in charge. From the beginning, Cánepa announced his intentions to bring “efficiency” to the Corporation. He argued that the institution’s funds had been squandered to the benefit of “certain individuals,” distorting its tourism-oriented mission, and stated that he intended to improve the service provided by state-owned hotels and expand their network. However, he was more interested in organizing the 1949 “October Fair” in Lima, which the president was keen to promote. But this fair was not successful since it entailed little more than the opportunity for people from Lima to visit some theme parks at the Campo de Marte park.50

This failure, exploited by a critical press, served to discredit the Corporation, prompting the government to distance itself. But there were more important motives. First of all, the regime, surrounded by liberal technocrats – such as Pedro Beltrán, director of the Banco Central de Reserva and editor of the newspaper La Prensa – were distrustful of the Corporation’s development model: the economy had just been liberalized, external tariffs reduced, and the currency devaluated (Portocarrero, 1983), and these technocrats saw the idea of planned sector development as absurd. Second, the organization’s objectives clashed with certain interests that had rapidly developed around the new authoritarian regime. That same year, 1949, the media created a stir over the Corporation’s revived plans to build a hotel in Lima, albeit this time the model was one of private investment rather than state ownership. Indeed, it was behind proposals to authorize a foreign company to build a twelve-floor hotel in the city’s Parque de la Exposición.

Various media outlets, including the usually accommodating magazine Turismo, reacted uproariously to what they saw as a delusional idea on the part of those in charge, whose role was supposedly to “ensure the integrity of our green spaces.” Indeed, these outlets thought it inconceivable that the proposed construction “even be considered within the realm of possibility,” given that such a mass would blot an urban greenbelt intended for “public use and recreation.” This was something to which “citizens cannot be resigned” given the many options available for construction.51 Thus, in the face of pressure from the media and the hotels’ association, the proposal was again withdrawn.

The weakened Corporation was overlooked, even at times of exceptional events that ought to have required state intervention – such as the Cusco earthquake of May 1950, which seriously affected the city’s patrimony. Thus marginalized, it was reduced to producing basic statistics on the arrival of foreign tourists to Lima.52

In the end, the government opted to wind the Corporation down. First, it was stripped of control of the Compañía Hotelera del Perú S.A., which returned to the orbit of the Ministry of Development. However, some from the regime and other stakeholders felt that construction should continue or else be relocated outside Lima, but based on the pre-1946 management model and the concept that public investment should open up the market for private investment.53 Although this viewpoint would prevail in the years that followed, some were opposed to even this subsidiary role for the state. Attacks were leveled at the Compañía Hotelera del Perú, which in 1950 administered 18 establishments.

In 1951, a Lima newspaper published a piece by the Compañia’s president, Luis T. Larco, disclosing that only five of the hotels had yielded profits and that the rest would require state subsidies. These had been necessary since the organization’s establishment in 1942, but had not been dispensed following its restoration to the Ministry of Development; as such, Larco suggested that the funds allocated to the Touring y Automóvil Club del Perú could be used to this end.54 Of course, Touring came out in defense of its income and took the opportunity to directly attack the Compañía Hotelera del Perú, questioning its plea for subsidies after having pitched the idea of autonomous development. Moreover, it accused the Compañia of charging excessively high rates for its services and of spending unnecessarily. “There would be nothing to object to if the improvement of services at the hotels for tourists was achieved through its own efforts.” Touring recalled and capitalized upon several complaints about deficiencies in the Compañía’s service.55 As well as accusing it of inefficiency, Touring questioned the Compañía's reason for being, as when it “was at the disposal of all Peruvians and provided efficient services,” it was still competing with private hotels in the interior, with the result that “only two first-class privately-owned hotels had been built outside the capital of the Republic: Hotel Monterrey in Huaraz, and Hotel Paracas in Pisco.” (Touring y Automóvil Club del Perú, 1951a, 1951b). So, despite a trajectory of nearly 20 years promoting the establishment of hotels to open up new tourist destinations, Touring accused the National Tourism Corporation of impeding such development.

After years of favoring state support as an instrument for development, by the 1950s, Touring had turned to liberalism. It called upon the state to withdraw from the hotel business and to give inducements to private firms. And although it believed the Compañía Hotelera should continue to exist, it wanted its subsidies to be rerouted to private enterprise (Touring y Automóvil Club del Perú, 1951a, 1951b).

Thus, public activity gradually decreased, and finally, on October 27, 1950, the second anniversary of the coup against Bustamente y Rivero, a decree was signed to liquidate the National Tourism Corporation. It was argued that this liquidation was motivated by its economic and financial situation, and because it could not discharge the functions required by Law No. 10556 and its own by-laws. The state assumed its liabilities and transferred its responsibilities to the Touring y Automóvil Club del Perú, except for the construction, expansion, and repair of tourist hotels, which now fell to the Ministry of Development. The liquidation committee was chaired by the engineer Carlos Moreyra y Paz Soldán and composed of Eduardo Dibós (from Touring), Luis Benoil, and Alberto Rodríguez Carpí.56

It was remarkable how those who once championed the creation of the Corporation were later responsible for its demise. In an editorial, Turismo magazine criticized the Corporation’s planning and forecasting: “[There was] no criteria that was thought-through and benefiting from experience. A policy that was optimistic to the extreme has always been followed.” The only tangible element, he added, were the hotels, because they were assured of a market rather than just a “hypothetical flow of tourists.” “Creating a costly entity that is difficult for the public purse to sustain with a view to a possible increase in tourism, was a gamble.” This was a charge leveled after WWII, when Europe was reopened for tourism: “What could we offer to compete with Europe in terms of tourist attractions? Little.” The feeling of being on the fringe of the world was overwhelming. So, now that the policy of coordination had been eliminated, what was proposed to take its place? Continued investment in hotels, roads, some publicity at the consulates, and the development of domestic tourism. ”This will be a job [that] […] will not entail the gamble typical of the big bureaucratic investments made without a sense of reality and with a childish optimism derived from inexperience.”57 The mood of policymakers, both within the state and in the private sector (entities, sector personalities) was therefore one of marked liberalism, consistent with developments on the political and economic fronts (Portocarrero, 1983; Thorp & Bertram, 1985). In 1952, Turismo magazine insisted in an editorial that Peru already had tourist attractions, and so “all that remained” was to remove obstacles to travelers: improve transport, hotels, and guides; produce “intelligent publicity which the travel agencies themselves and the embassies can easily do,” and “the rest will automatically follow.”58 Any urge to engage in state planning or coordination was resisted, and it was believed that public involvement in tourism should be no more than complimentary.

For its part, in 1951 Touring (1951b), published a text in which it criticized the National Tourism Corporation, alleging that its organization and promotion of tourism “lacked basic, indispensable plans because it did not have any scientific knowledge.” Its projects, “disjointed and lacking in organicity,” did not yield the expected results. In particular, it questioned its publicity policy (“facile, ostentatious, and ineffective in the country and in the United States); the tourist hotel program (“with minimal achievements”); the costly bureaucratic apparatus; and the employee vacation plan (“prejudices their own finances and that of private entities and [...] had an insignificant social impact”). Moreover, Touring went as far as to question the notion of social tourism, carried out during the holidays of public employees. The organization considered it harmful to pay workers for their vacations: “That the state subsidy is obligatory for those who do not wish to travel during holidays is a noxious approach.”59 Its aversion to the state, and its direct coordinating or developmental role, led Touring to assert: “The state must not intervene in the [tourism] industry or in the trade as an industrialist or a trader. Its presence in activities leads to the withdrawal of private initiative” (Touring y Automóvil Club del Perú, 1951b). Thus, when it came to tourist hotels, Touring again proposed their liquidation or minimization by way of strong incentives for private enterprise.

The liberal vision had triumphed. Business sectors, which did not necessarily subscribe to this perspective, were again left to trust in isolated initiatives.60

7.Conclusion

Thus, from the 1930s until 1948, Peru had clear and consistent public tourism policies in a very particular socio-political context, in parallel with other South American countries and in the context of peak interventionist policymaking in several European countries, such as Germany, Italy, and France. Peru was not removed from a sequence that began with an interest in passing specific laws while relying on private entities (such as Touring), before developing larger-scale developmentalist policies (including road- and hotel-building), and concluding with the creation of a public entity. However, these efforts soon came up against local conditions shaped by postwar circumstances and the crisis of the Bustamente y Rivero government, the repudiation of state interventionism, and the reaction of economic interests, and as a result the process came off the rails. Thus, by 1950, there was a patent reversion of the approach of previous years.

The business community – specifically, that of Lima – was among the architects of this outcome. Though at first it was eager to back the state’s initial plans, this support only reflected a desire to open the market to private capital. And when the state sought to compete against private enterprise, a rupture was inevitable, with private interests signaling what role they expected public policies to play. Another decade would have to pass before this approach was reconsidered.

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