The macroeconomic picture is a less-than-encouraging mix for the Brazilian outbound tourism industry: inflation is high, consumer confidence indexes are “meh,” and unemployment closed out Q1 at 11.1 percent—unchanged from the previous period and below market forecasts of 11.4 percent. It was the lowest jobless rate for a quarter ending in March since 2016 when it was also 11.1 percent.
Even with the above, the travel industry analysts who know Brazil and Brazilians, are not about to concede a mere slow recovery in our industry: i.e., read the rest of the article.
Taking note of the numbers, the most recent edition of the Brazilian Overview Monthly Report (BOM Report)—a joint effort of the Brazilian publishing giant PANROTAS and FECOMERCIOSP, the São Paulo-based business and economic research organization—asserted that, “The international market should return to 100 percent of the pre-pandemic levels next year (2023), but Brazil already shows promising results: we are Top 4 in sending tourists to the United States (February data), Top 3 in visitors at Walt Disney World and Universal Orlando parks, and frequent visitors in the Caribbean and Europe.” The numbers on international arrivals to the USA from Brazil for April 2022 show that some 94 thousand Brazilians visited the United States. This made the country the number six country market for overseas traffic to the U.S.—behind the UK, France, Germany, India and Colombia.
For the year-to-date (through April), Brazil was ranked the No. 3 country market—behind only the UK and France. (See article on NTTO arrivals elsewhere in this issue of INBOUND.)
So, what could go wrong? Or right? Here are some guesses to these two questions.
1. First, let’s not talk about jogo de cintura anymore. That’s a given. It means (according tour my favorite translation from the Cambridge Oxford dictionary, which tells us that it means) “footwork [noun] clever or skilful/skillful actions to achieve something or deal with a problem.” So, this quality is always a given in any dialogue about what makes Brazil so effective as a marketer.
2. This is a World Cup year—as in the quadrennial championship series of matches to crown the best national futbol (soccer) team in the world. This also means, according to conventional wisdom, that in most countries on earth, normal day-to-day activity will grind to a halt as teams play one another until there is one match left and two national teams play for the World Cup championship as hundreds of millions of spectators stop what they are doing to watch all of the aforementioned games and the championship. (Actually, qualifier matches began last year.)
The action takes place from Monday Nov 21 to Sunday, Dec 18, 2022.
There are no superlatives to describe just how important this competition is to Brazilians. In the history of the World Cup, no country has had as many consecutive appearances as qualifier/competitor as has Brazil, with 22. The next closest streak is Germany, with 18, followed by South American arch rival Argentina and its 13. Also, Brazil has won the World Cup more than any other nation—five times (1958, 1962, 1970, 1994, 2002), followed by Germany’s four (1954, 1974, 1990 and 2014). Several others, including Argentina, have won it twice.
So, the question is begged? Will the World Cup have an impact on travel from Brazil? We believe that, should Brazil advance as far as the semi-final round of competition, it could keep people at home for the month or so of actual activity. Those who celebrate after everything is over probably will hold off for a couple of weeks or so. This would drive the travel into the new calendar year.
3. This is a presidential election year. In good times and not-so-good times, national elections that are open and transparent seem to keep a population’s attention fixed on the matter. Travel abroad is a less-than-commanding priority as people want to be close to the action. For Brazil, the situation is no different—probably even more so since this election year came to be, it resulted in what is already a fierce campaign between the Liberal Party’s Jair Bolsonaro, the incumbent president (since 2019) Liberal Party and former president (January 1, 2003 to January 1, 2011) Luis Inácio Lula da Silva for the Workers Party.
The latter was actually jailed for the better part of a year-and-a-half on a corruption charge. A court ruling annulled Lula, as he is called, who has basically come out of retirement (he is 76 years old) to challenge Bolsonaro. A Genial/Quaest poll earlier this month said Lula has a 17-percentage-point lead. The election takes place on Oct. 2.
A note: Lula is credited with helping to increase the size of Brazil’s middle class though programs such as one that gave cash transfers that would help recipients take self-improvement steps in their life. A larger middle class also meant that more people could travel—even if it was domestic travel and was likely made possible through a year of monthly payments.
So, we ask: will this have any impact on international travel. Not really. As we studied this issue, we realize that the system that defines the Brazilian economic structure is one that is tied to social classification. There are several different concepts of social classes in Brazil, but that which is most widely followed or adopted by the market classifies society in letters from A to E. This definition is based, overall, on the household’s gross monthly income.
4. Those who work the international travel market and Brazil, in particular, know the system well. This is why one tourism industry professional told me seven years ago at an industry function that their then-new strategic move was to target the two percent of Brazilians who are able to act on their travel plans regardless of the economic currents that affect most of the country’s population. He was obviously referring to the A’s. So, even if there are winds of change, there are still about 4.3 million A’s who are ready to travel … no matter what.