After the panel at NAJ’s RTO Summit last week in Kissimmee, Florida that discussed the outlook for South America’s largest overseas source market for inbound U.S. travel, one sensed that the roller coaster that is Brazil’s economy, as well as the performance of it, regardless of who was elected this past Sunday as the country’s new president, would continue.
(Editor’s note: this account was written just as Brazilians were prepared to go to the polls on Sunday, Oct. 28, in a runoff election pitting the two top challengers left from the first round of voting on Oct. 7th: The far-right Jair Bolsonaro and the left-of-center Fernando Haddad. Bolsonaro emerged as the victor and new president of Brazil.)
Although the nation’s economy began earlier this year to pull out of its worst economic recession in a century, its condition is fragile and the recovery is tentative, due in part to a massive buildup of government debt.
Perhaps the situation was best put by panelist Oswaldo Freitas, regional sales director-Latin America, TPI Global (a division of JTB, which is the U.S.-based ground operator for CVC groups) who said that, in the past several years, “We’ve had a good challenge politically, combined with a challenging economic situation. The current election that we’re having puts us in kind of a roller coaster right now.”
—the other panelists were Jay Santos, Orlando station manager, GOL airlines, and Tereza Reis, president, Personal RGE Tours—
Business this year has been good—so far—he told Summit delegates, characterizing the first half of 2018 as “good,” while the second half is “very challenging, but better than the first half.” He added, we’ve had a challenge politically, combined with the economic situation. It’s kind of a roller coaster that we’re in right now.
Reis agreed, it seemed, as she described a beleaguered national population that has lost confidence in itself. “The problem is getting confidence back,” she said, “back into its people …. confidence in spending—people are not buying homes, not buying cars, not buying anything.”
The nation’s people are so sharply divided at the moment, “as it is in the United States, that somebody could win by a single vote.” While not necessarily disagreeing with Reis, Santos said that “Brazil does deserve a kick in the butt” in order to “wake up” and get things moving again.
Among the panelists and in the coverage of the Brazilian election, there seemed to be a consensus that the administration of former president Luiz Inácio Lula da Silva (2003-2011) did much to grow the size of Brazil’s middle class, expanding the size of Brazil’s population that could afford international travel.
But now, the economic recession experienced by Brazil has left the government weakened, with insufficient resources to pay for the social programs launched by Lula da Silva, or the nation’s disproportionately large debt.
Complicating matters, suggested Freitas, is that “we’ve become so global that something that happens in Turkey can quickly affect everyone.”
As they discussed current hot-button issues in the Brazilian market, some familiar refrains were sounded.
—Santos said that his carrier, GOL, has been able to grow into its just-achieved position of the top airline in Brazil by being flexible in its approach. A budget carrier, it has no plans to encroach into the market segment served by its partner, Delta Air Lines. “You have to be (country) specific as to what you are doing. What we do in Brazil we cannot do in Mexico.”
—Reis pointed to the starchy relationship that receptive operators have with hotels. Hoteliers, she believed, don’t take operators seriously at times. “Sometimes, they take a week to respond to a request for a quote—if they respond. They don’t even both to send us a quote anymore.”
—Freitas said that, in a new development, CVC, which is trying to increase the size of its footprint in international markets, has developed a group series for Europe—the same as they are doing in the United States.