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2007 is going to be the fourth year of sustained growth says United Nations World Tourism Organization but what about Latin America?
In the first eight months of 2006 international tourist arrivals totalled 578 million worldwide (+4.5%), up from 553 million in the same period of 2005, a year which saw an all-time record of 806 million people travelling internationally.
Growth is expected to continue in 2007 at a pace of around 4% worldwide. The expected 4% growth for 2007, though slightly slower than in previous years, is much in line with the UNWTO long-term forecast growth rate of 4.1% a year through 2020.
The short term outlook remains very positive; especially against the background of a strong world economy and as favourable exchange rates continue to encourage European and Asian travellers. International tourism is likely to remain buoyant unless major incidents occur.
Latin America is growing fast and 2007 will be a good year as far as international tourist arrivals and tourism expenditures are concerned. In the Americas in general 2006 recorded a 2.5% increase with Central America reaching 8.7% increase and South America an 8.1% increase.
The Caribbean had a smaller growth rate reaching +5.1% but it was exceeded the global growth average. North America (+0.4%) fell well below, pulled down by the results of Canada (-4.1%) and Mexico (-3.8%), in spite of the 4.3% growth in the USA.
South and Central America benefited both from higher expenditures by US travellers and more arrivals from European tourists. At the same time intra-regional travel performed on a high level.
On the one hand Latin America depends highly in domestic travel but the international tourists are showing more and more interest in the tourism product of the region. It is a fact that many Europeans are now placing the destination “Latin America” in to their travel schedules.
According to the Latin America Travel Association (LATA) the future in the UK specifically looks very positive for 2007 in terms of travel to Latin America.
“Growth has been for many reasons including starting from a low point (out of the UK), being the last continent to discover for many seasoned travellers who have now visited Africa and the Far East etc, global factors which have made Latin America seem more attractive ( e.g SARS, 9/11, generally good political stability), the weakening dollar…and the increase in interest in all things Latin e.g wine, music, culture. Mexico is always a big part of our statistics and has a huge part of the ‘tourism’ pie. Ecuador and Peru and Brazil are always great sellers,” explains LATA’s chairman.
There is also an increase in business travelers who spend more during their stay in a place compared to the leisure traveler. UNWTO forecasts indicate that international arrivals to the region may end 2006 up by 7.2%, therefore high above the expected world growth rate of 4.6%.
More and more countries in Latin America and tourism bodies and companies in the hospitality and aviation sector are realizing the potentiality of the tourism industry for their region. There is more professional approach from the tourism bodies to cooperate with local communities in order to proceed in to a common sustainable tourism policy that will benefit their counties in long term.
Tourism would be an instrument of development for Latin America as it starts to generate more jobs and more sustainable plots are being implemented by the tourism authorities of the countries in the region. It is worth mentioning that Iberoamerica receives 15% of worldwide tourist arrivals, which in 2005 generated 90 billion US dollars (73 billion euros) in receipts. As the trend is going to continue in higher rates in 2007 more jobs are going to be created helping the poverty to be reduced.
Tourism is one of the most dynamic economic activities at the international level. For the 22 Iberoamerican countries, revenues from international tourism and passenger transport account for more than 10% of total exports of goods and services and represent 3% of Gross Domestic Product, according to the UNWTO.
Iberoamerica received 122 million international tourist arrivals in 2005 (15% of the world total of 806 million), generating 90 billion US dollars (73 billion euros), equivalent to 13% of worldwide receipts (682 billion dollars).
While a large part of this tourism is concentrated in Spain, Portugal, Andorra and Mexico, there has been a notable dynamism in the Latin American region over the past fifteen years, During this period, destinations in Central America (+9%), and South America (+6%) enjoyed growth rates considerably higher than that of world tourism as a whole (+4.1%).
The UNWTO forecasts that this growth trend will continue and that arrivals will top 200 million by 2020. Especially fast growth is expected in Iberoamerican destinations in South America, followed by those in North and Central America and the Caribbean.
The growth of comparatively emerging destinations will complement the diversification of relatively more established destinations, thus boosting tourism’s role as a tool for the economic and social development of the Iberoamerican community.
Brazil
Brazil faces socioeconomic challenges but the tourism organizations in the country with EMBRATUR the Brazilian Tourism Board to lead the way are emphasising more and more to the benefits that tourism can bring to the country.
According to EMBRATUR, Brazil until the end of 2006, received 5 million foreign tourists, who generated exchange values estimated by the Brazilian Central Bank as almost US$ 4.4 billion.
MICE sector is the most beneficial part for Brazil so far which represents around 30% of the whole tourism activity in Brazil. Brazil is counting to the MICE sector trying to get a better place in ICCA’s rankings. But the country will continue to be strong in the leisure segment and during 2007.
Argentina
In Argentina tourism is becoming more important as it is generating more jobs than in the past. According to the Secretary of Tourism in Argentina, by the end of 2006, the country will see 7.6% more international tourist visits in relation to 2005.
Domestic and the intra regional travel is still high is the country with Brazil coming to the first place of the Argentina’s international arrivals but an increase number from European counties gives a sign of change.
Trends that will drive the region in the coming years:
- Leisure segment is going to be strong in 2007
- More events in the Latin America are going to take place
- Higher average expenditures
- Confidence for the good performance of Latin America will continue
- Intra-regional tourism to continue to be strong
- Arrivals to destinations in Latin America are forecast to grow above the world average
- Biggest growth is expected to originate from Europe and from Asia and the Pacific
- Niche destinations
- New and sustainable products and boutique properties
- Community tourism projects.
Finally, it is very important the fact that many counties in the region are making joint cooperations for mutual benefiting by the tourism industry as the decision of the leaders of El Salvador, Guatemala, Honduras and Nicaragua to move towards a single aviation market and plans for common promotion strategy in the long haul destinations.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
