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Latin Tourism: The Driver

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Tourism is by far the best export for Latin American countries. All the money spent in the country is spread across the board to individuals and firms.

BY ROBERT C. BOOTH

As reported earlier, Latin America received a record of 68.6 million international arrivals in 2007, an increase of 2.9 percent, with tourism receipts growing 9.7 percent to $58.9 billion. It had the highest growth in all world regions except Asia. The growth was also higher than the world average of 5.6 percent. Assuming that the international arrivals were mostly, if not all by air, and since tourists come and return home, this means that more than 100 million air passengers were tourists to and from Latin America and within the region during 2007!  

According to the World Tourism Organization (WTO) tourism is the world’s largest industry with annual revenues of close to $500 billion, and it is growing fast with airline international tourist arrivals – estimated at 900 million in 2007, up 6 percent from 2006 – expected to double by 2010. According to research by the industry’s WTTO, the World Travel and Tourism Council, released this year, world travel and tourism is expected to generate close to $8 trillion in 2008, rising approximately to $15 trillion over the next ten years. And it states that Caribbean countries derive close to half their GDP from tourism (World Resources Institute), although we don’t have the specific numbers, except for the Dominican Republic and some countries in Central America- which do not come close to 50 percent. 

AIR TRAFFIC GROWTH

If you look at individual countries, they all reported significant growth in tourism receipts and international arrivals during the year, and the first half of 2008. (...)

When it comes to air traffic growth in demand, it is in double digits in most countries in the region; examples are: Chile with 4.8 million total passengers in the first six months of the year, for a 13.2 percent increase over last year. LAN reported 2007 RPKs were up 23.1 percent  in the year 2007. IATA reported that Latin American RPKs were up 8.2 percent  for its carriers in 2007. The Association of European Airlines (AEA) reported its South Atlantic routes were up 11.8 percent  in 2007, the highest growth in the system. (...) 

Brazil’s ANAC, Civil Aviation Authority reported that Brazilian airlines carried 51,028,000 passengers in 2007, a 7 percent growth over the previous year. 46 million were carried within the country with five million internationally. That’s a lot of traffic!

The demand growth within the region and domestically is also growing significantly which means more people are using air transportation, which is a good sign that the airlines in the region are stimulating the markets. And all the carriers – both from outside and within the region) are adding more flights and increasing capacity. The three U.S. Majors in the region, American, Continental and Delta are all adding capacity and new flights in the region in spite of their cutting back in the United States. Which is also good news.

MARKETING, MARKETING, MARKETING

And the Latin American and Caribbean nations are all devoting significant attention to tourism in the region. The following are a few examples from our “tourism guru” Jim Woodman’s Tourist Corner in Avnews: Ecuador is waiving visas for 130 countries which is designed to increase tourism; Panama and Costa Rica have joined forces to set up a marketing effort in Europe to sell the two destinations; Hilton hotels across the region are offering new “spoil yourself” packages to five destinations; “Big Five Tours & Expeditions” has announced a new program called “Undiscovered Costa Rica” ; Guatemala, Honduras, El Salvador and Nicaragua are opening a Miami office for the promotion of tourism in North America. And there are a lot of new Boutique Hotels opening in the region as well as “Estancia Tours” in Uruguay and Argentina. And a lot more!

TOURISM IS "THE DRIVER"

All of which is the basis for my statement that tourism is the driver of economic growth, air travel demand and generally improving the lives of millions in the region. Tourism as an export is by far the best medium for generating revenues for the countries involved. Unlike most exports, which generate revenue for the country and/or individual exporters, tourism receipts have a “horizontal impact”, that is all the money spent in the country is spread across the board to individuals and firms, ie hotels, restaurants and so on, which have a great impact on jobs, employment and individual income, from waiters, to taxi drivers, and others which are too many to mention. Basically, tourism is by far the best export for countries with the right kind of attractions, air service, marketing and a government that understands the value of foreign tourist expenditures. 

Stay tuned.

Robert C Booth is Chairman of AvGroup and author of  Airline Pasionado – Before, Braniff and After. This column is based on an excerpt of a commentary originally published in AvNews. Republished with permission.

 

 

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