Following a year in which there were episodic starts and stalls for the travel and tourism industry performance in Brazil, the latest monthly Overview report from the trade publication PANROTAS and the business journal Fecomercio was decidedly upbeat as it analyzed the latest economic numbers and other data.
After struggling through its worst economic recession in a century from 2014 to 2016, the nation’s economy appeared ready to stabilize until there was a sudden contraction early last year. Full-year data for 2019 are not yet available, but it appears that the country escaped another recession. As the January Overview indicated, “in the domestic environment, the country is showing signs of being increasingly on track.” Other notes from the Overview included the following:
—Christmas sales were at record levels and surpassed those of the pre-crisis period, between 2012 and 2014.
—Almost 100,000 jobs opened up in November, the best result for the month since 2010—and according to another survey by IBGE, the number of unemployed fell to 11.9 million (compared to a total of 12.2 million in the quarter ended in November 2018).
—In addition, inflation in Brazil is under control, maintaining the purchasing power of the population. the end of 2019, the official price index had a rise of 4.31%, slightly above the target set (4.25%).
—With more jobs, more income and more confidence there is less default risks and the supply of credit goes up. In November, consumers contracted R$ 190 billion in credit in the financial system, an increase of 8.9 percent over the same period in 2018. (This number is important, since many Brazilians borrow money, in effect, to pay for their vacations.)
—In general terms, the economy grew by close to 2.5 percent by the end of 2019.
—The two major measures of consumer confidence both showed increases at year’s end.
A Good Year for the Travel and Tourism Industry? The Overview put it this way: “Great expectations for the year are turned to acquisitions of major players, such as Despegar and CVC Corp., for the future of Latam Travel franchises (the company will no longer have physical stores and recommended they be transferred to Agaxtur).“
However, the national aviation industry now has only three major players (Gol, leading the domestic market, Latam, leading the international market, and Azul, leader in destinations operated in Brazil) with the shutdown last May of Avianca Brazil. There ae also high expectations regarding the resumption of Boeing’s MAX aircraft, which halted Gol’s international plans. January started with Azul, Gol and Latam announcing more domestic flights in their networks (Latam had a 20 percent growth), but also some specific additions to their international network. Azul will fly from Campinas to New York and Recife to Buenos Aires and Gol from Porto Alegre to Punta del Este, Uruguay. (Industry analysis have cited high ticket prices for long-haul travel as a challenge for those marketing and selling Visit USA product.)
More Travel for Brazilians? Also, on the brighter side, the Overview noted: “According to Capital Research analysis, Brazilians shall travel more in 2020. Besides the six holidays that will fall on Mondays or Fridays, such as Carnival, Corpus Christi and Black Consciousness Day, it is expected that Brazilian have some money in the pocket to travel due to signs of economic recovery.”