OPPORTUNITIES IN LATIN AMERICA TRAVEL AND TOURISM INDUSTRY - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

OPPORTUNITIES IN LATIN AMERICA TRAVEL AND TOURISM INDUSTRY - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Latin America travel and tourism industry is expected to see growth due to the increasing internet penetration in the region, improving economic status of the countries and as a result more availability and ability to travel across and within the country.

Key Highlights

• Outbound travel is a major reason for the industry's growth. Argentina along with Brazil have the highest growth in outbound tour with Americas being the most favored destination.
• The increasing disposable income among the population and the growing middle class has helped the tourism sector flourish even when the economy was sluggish.

Key Market TrendsGrowing Economic Impact of Tourism

In Latin America tourism has become one of the most important contributors to economic development, job creation and even environmental protection. Numbers given by the World Travel and Tourism Council (WTTC), show that the subcontinent stands as the fourth most important touristic region in the world. Tourism provides 15,778,000 jobs (7.6% of total employment) and contributes 348.7 billion dollars to respective GDPs. International tourist arrivals increased by 7%, according to the World Tourism Organization (UNWTO).

Latin America stands out as a travel destination. Countries like Mexico, Peru, Colombia, Chile and Argentina have made new investments, and new international travel players, such as Norwegian Airlines, are emerging in the region. UNWTO forecasts that Latin America will receive 78.2 million tourists by 2027, generating USD 82 billion for the local economy.

The rise of the middle class is one of the most important achievements when it comes to the economic expansion in Latin America. The reduction of poverty allowed people see further and have other perspectives over their own lives. Economic growth plays a big role when talking about the growth of outbound travel market. This means that the rise of the middle class slowly opens up opportunities for people who could barely get by just a few years ago. It’s true that most Latin American countries experienced an economic slowdown over the past few years. However, tourists keep searching for outbound destinations that are worth the trip inside and outside of Latin America.

Outbound Travel driving the Market Growth

With 5% more international trips, outbound travel from the Americas has shown solid growth in 2018 with a plus of 5%. While North American outbound travel increased by 4%, Latin America was twice as strong with 8% more international trips. Latin America outperformed North America during the first 8 months of the year 2018 with 8% more international trips. One of the significant factors was high growth in the Mexican outbound travel market, which declined in th eyear 2017 but recovered strongly between January and August. The reason for this turnaround was an increase in visits to the US, which dropped in 2017 but recovered strongly in 2018. Compared to North America, where trips to Europe remained the growth driver, Latin Americans mainly headed to destinations within the Americas.

When it comes to Latin American tourism market, numbers are growing nonstop. In 2016, nearly 36% of all visitors in the United States of America came from LATAM. This means more tourists from the region than any other region of the whole world. They also generated a profit of 60 billion dollars in 2016 for the United States alone. This is almost one forth of the total amount spent by international travelers in the country. Argentina is the leading outbound travel country in Latin America. The country had more than 16.6% growth recently, mainly focused in other Latin American countries. The second biggest growth-rate comes from Brazil, with 14.2% increase in outbound travel in 2018. Brazilians are going to United States and Canada – especially after an improved system for visas was implemented.

Competitive Landscape

The Latin America Travel and Tourism industry has a number of players active from international markets like North America and Australia competing with the local travel and tour operators. This makes the market competitive and the market is expected to remain competitive over the forecasted period.

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