Recovering from a near knockout blow: After a planned hiatus for the month of January, the PANROTAS monthly overview—it is a must for anyone who follows the travel and tourism industry in South America’s largest source market for visitors to the United States— is back on the scene, keeping busy in the interim with its output of other industry publications and events. The latest edition, which is a joint project with FecomércioSP* a São Paulo-based business research organization, was published just as February was coming to an end.
In trying to find the right analogy that would describe the overall economic situation in Brazil—a setting in which all industries have to operate—the sport of boxing comes to mind. It was as if the economy of the country was knocked out cold last year in the sixth round of a twelve-round contest: Brazil was just recovering from a recession and it was hit worse than any other in South America with the COVID-19 virus.
The international tourism market blacked out. Or so we thought. Somehow, the boxer woke up, stood up and managed to finished the year—in terrible shape, but determined to compete.
The key economic indices are not exactly something to celebrate, but for an economy that had been knocked out cold, they are not cause to moan, either. Consumer and business confidence indexes are still climbing upward after they collapsed last summer. Inflation rate increases are modest and, should Brazil sharply increase the number of its people who have been vaccinated against the COVID-19 virus, the economy should take hold.
In two sentences—the outlook. “In Brazil, domestic travel will dominate the year and we predict the return of business travel, events, end even international trips (short-haul) for the second half of 200,” José Guilherme Alcorta, CEO of PANROTAS, told subscribers to the Overview, adding, “We need to promote the importance of the vaccine and maintain the right protocols and caution to attract our clients. Brazilian are eager to travel do Florida, New York, Europe.” Following are some key takeaways from the PANROTAS/ FecomercioSP monthly overview.
—While the hotel industry had a very good occupancy rate in Brazil, future sales already showed travelers’ concern about the increase in Covid-19 cases.
—Braztoa (Brazilian Association of Tour Operators) operators recorded lower-than-expected sales in December and January.
—CVC, the largest tour operator in Latin America, which had almost 60 percent of pre-pandemic sales in December, saw January sales drop to 40 percent compared to the pre-pandemic period.
—The CVC group forecasts domestic sales will reach levels before the pandemic only in December. And international sales are expected to recover only in 2022.
—Delta Air Lines and United have been able to maintain service to Brazil, while others, including American have suspended flight service or have reduced their frequencies.
—Brazilian carriers Azul, Gol and Latam maintain a substantial level of domestic flights in February, with small decreases compared to January.
—The rate of vaccination is very slow in Brazil (on February 17, just over 5 million out of a total of 220 million Brazilians had been vaccinated (to follow it, visit vaccinabrasil.org)
—For both domestic or international travel, Brazilians want resorts, villas, rental houses, where families can be together and have moments of relaxation and no crowds. Direct flights, structure for COVID-19 exams, health and safety facilities and protocols, and all-inclusive packages are the most sought after by consumers.
—Generally, the belief is that 2021 will be very similar to the second half of 2020: slow recovery, attention to the responsible reopening of countries, a lot of testing and vaccine when it is available. Losses are expected to continue in the sector, which foresees a solid start to recovery only in 2022 with domestic travel and travel to South America accelerating still in 2021.
* “The Federation of Commerce of Goods, Services and Tourism of the State of São Paulo (FecomercioSP) brings together business leaders, specialists and consultants to foster the development of entrepreneurship. Together with the government, it is mobilized for reducing bureaucracy and modernization, developing solutions, conducting research and providing practical content on issues that impact the entrepreneur’s life. It represents 1.8 million entrepreneurs, who account for almost 10 percent of Brazilian GDP and generate around 10 million jobs.”