Machu Picchu, Peru's most famous tourist attraction, has had its fair share of struggles over the past few months.
After stranded visitors were airlifted out last month and overcrowding resulted in halted ticket sales last summer, now the Incan site has closed "indefinitely" due to ongoing violent protests against the country's new president, it was announced this week.
Tour operators, such as Manuel Sanchez-Palacios, who works for Peru for Less, expect the closure to last for about two weeks, but the aftereffects of political instability to linger much longer.
"Sadly, this will affect tourism for the next few months and all people involved," he tells The National. "This includes everyone from the local artisan who depends on selling handmade goods to tourists, to the tour guides, and then larger agencies like us. Anyone who operates in Peru will feel the effects of this, especially after the temporary closure of Machu Picchu."
Protesters have been demanding the resignation of Peru's President Dina Boluarte, since she was sworn in last month after serving as vice president. Since then, 46 people have died and the government has imposed a state of emergency in certain areas of the country.
They want her predecessor, the ousted left-wing Pedro Castillo, to be released from jail where he's facing charges of rebellion and conspiracy.
"As a country, we are hurting socially and politically, and seeing the image of Peru being damaged as well is painful," says Sanchez-Palacios. "I know this is a dream destination for many travellers, and as a Peruvian, I only want to share the beauty of experiencing my country."
Sanchez-Palacios advises tourists who are planning to travel to Peru, or visit Machu Picchu, to hold on to their tickets and travel dates.
"If you booked with an agency, ask for their postponement policy, and if the worst comes to worst, you can always postpone or transfer your travel credit," he advises. "If you didn't book with an agency, follow the recommendations of who emitted your tickets."
Right now, the company he works for, which offers custom tours and travel packages at affordable prices, is experiencing a deluge of cancellations and postponements, but they're offering customers solutions such as lower fees, extended or transferable travel credit and alternative itineraries with other brands in the group.
Peru has been through worse, he says, and Machu Picchu remains an "extremely important" site. The citadel was built in the 15th century as a religious sanctuary for the Incas at an altitude of 2,490 metres. In 2018, it attracted 1.5 million visitors. Last summer, capacity was at 4,044 visitors a day, increasing steadily since the Unesco World Heritage attraction reopened in October 2020. The UN has described it as “probably the most amazing urban creation of the Inca Empire at its height".
"Tourism has always rebounded in Peru no matter the circumstances; we've been through much worse, including the pandemic, so I would still hold on to current travel dates unless they are within the next two weeks," Sanchez-Palacios says.
He recalls a situation in 2010 when Machu Picchu closed for two months due to a heavy mudslide that nearly destroyed Aguas Calientes. "We spent months suffering the consequences," he says.
The most recent closure is mainly due to railway damage, which left hundreds of tourists and civilians stranded for hours as protests raged.
"Luckily, the damage to the rails is not as significant as it was in 2010, and we hope that trains will resume soon after Machu Picchu reopens," he says.
Ultimately, he is confident the unrest will settle soon. "And once it does, I hope travellers will visit without hesitation," he adds.
"I would ask all travellers considering travelling here to please keep Peru in their hearts."
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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9: Annual growth in philanthropy
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Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
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Starring: Ayushmann Khurrana, Bhumi Pednekar