El Salvador — The Navarro Report
El Salvador is on pace for the best tourism year in its history, and the numbers are not subtle. The country received 2.9 million international visitors between January and July, a 24 percent jump over the same period last year, according to the Ministry of Tourism. April alone brought 473,000 foreign arrivals, a 36 percent year-over-year surge that made it the strongest April on record. Tourism Minister Morena Valdez says the sector generated more than $2.1 billion in foreign currency in the first half of the year and is now targeting $3.6 billion by December — a roughly 10 percent increase over 2025, itself a record year that saw the country surpass 4 million visitors for the first time. Officials at INVEST, the government’s investment and export promotion agency, now project the year could close with as many as 4.9 million visitors, well above the original forecast.
Valdez has been explicit about the driver behind the surge: security. “Security is the main factor motivating the arrival of more visitors,” she told EFE, pointing to the transformed public image of a country that for years ranked among the most dangerous in the world due to gang violence. The state of exception President Nayib Bukele has maintained since March 2022 — controversial among human rights organizations but broadly popular domestically — remains, in the government’s telling, the foundation on which the tourism boom is built. Cruise arrivals at Salinitas, Acajutla, and Los Cóbanos are feeding new visitor traffic into the Ruta de las Flores and the historic center of San Salvador. In contrast, new infrastructure such as the Plaza Universitaria and social housing projects tied to Surf City are being presented as evidence that growth is extending beyond the capital.
Guatemala, the United States, and Honduras remain the top source markets, with Guatemala alone contributing 231,000 visitors in April and Honduras posting 30 percent growth. Regional connectivity and airport investment — including upgrades at El Salvador’s international airport and the Port of Acajutla — helped drive first-quarter GDP growth of 4.8 percent, according to the Central Reserve Bank, with hotels and restaurants expanding by 7.1 percent and construction leading all sectors at 13.5 percent.
Here is where the story gets more complicated and where readers closely tracking El Salvador should pay attention. While tourism revenue is climbing, foreign direct investment is declining. Net FDI fell from $756 million in 2024 to $474.8 million in 2025 — a 37 percent decline, according to Central Reserve Bank figures. Nearly $982 million in profits were distributed to foreign investors last year, concentrated in finance, insurance, commerce, electricity, and manufacturing — meaning a meaningful share of the capital entering the country is flowing back out as returns to existing investors rather than new productive investment. Reinvested earnings accounted for $661.7 million of the net flow, essentially profitable companies choosing to plow money back into operations already established, rather than fresh greenfield projects breaking ground for the first time.
There is a silver lining in that data. El Salvador ranked second in Latin America and the Caribbean, behind only Costa Rica, in fDi Intelligence’s 2026 Greenfield FDI Performance Index, landing at 38th globally with a score suggesting the country attracted more than double the new investment projects one would expect for its economy’s size. Panama increased its investment flows into El Salvador by 117 percent, and more than half of countries with existing investments in El Salvador expanded their positions in 2025 relative to 2024. That suggests investor confidence remains directionally positive even as headline FDI numbers fell.
The deeper structural story is remittances, not investment or tourism, carrying the economy. Salvadorans abroad sent home a record $9.99 billion in 2025, up 17.8 percent and equivalent to roughly 24 percent of GDP — a level of dependency higher than any other economy in Central America. Net international reserves reached $5.1 billion in April, bolstered by remittances, tourism dollars, and disbursements tied to the $1.4 billion IMF agreement signed in 2024, which required El Salvador to raise bank reserve requirements to 15 percent and strip the mandatory acceptance provision from the country’s Bitcoin Law.
For a government heading into the final stretch of Bukele’s second term, the political messaging writes itself: falling crime, rising tourists, record remittances, and a growing economy. The harder question — one INVEST officials and private economists are beginning to ask openly — is whether tourism and remittance dollars can be converted into the kind of sustained, greenfield investment that builds durable jobs, rather than simply cycling profits back to investors who arrived years ago. That conversion, more than any single visitor statistic, will determine whether 2026’s records mark a turning point or a ceiling.
Human-Directed AI Journalism