According to Phocuswright’s Phocal Point database, total gross travel bookings in the region were worth $60 billion in 2018 and are predicted to increase to $69 billion in 2020 and $78 billion in 2022.
IATA’s 20-year Air Passenger Forecast from October 2018 predicts Latin America will grow by a compound annual growth rate of 3.6% through 2037, serving a total of 731 million passengers.
That is all good news considering the region’s economic and political challenges in the past several years.
According to Brazil-based Phocuswright analyst Carolina Sass de Haro, “We have to consider that the political and economic turmoil that happens often is just a given. We are used to living like that. Of course it does affect tourism and everything, but you see entrepreneurship and the industry moving despite what is happening with the political and economic crisis.”
Brazil, the region’s largest country, is still feeling the effects of a severe recession that began in 2014, yet in the midst of that, it has hosted major international events – the World Cup in 2014 and the Olympics in 2016.
For 2019 through 2022, Phocuswright predicts an average of 6% total gross booking growth in Brazil, while online gross bookings will increase an average of 10%, reaching 48% penetration in 2022.
“This strength is due in part to the characteristics of the Brazilian traveler. Tech savvy and quick to adopt new technologies, Brazilian leisure travelers have shifted to online booking more rapidly than their counterparts elsewhere in Latin America, and Brazil’s online travel penetration is the highest in the region,” says Phocuswright’s Brazilian Digital Travelerreport.
Brazil and Mexico together represent 71% of Latin America’s total and online travel markets, but the development of infrastructure and consumer adoption of mobile technology is not just happening in those countries.
According to the Economic Commission for Latin America and the Caribbean, the number of households across the region connected to the internet grew by 103% between 2010 and 2016. And there is still substantial room for growth.
The GSMA, a global association for the mobile industry, reports 68% of the population across Latin America and the Caribbean was connected to a mobile network in 2018, and that number will increase to 74% by 2025, closing the gap on the developed market average (87%). And it predicts smartphones will account for 78% of the mobile connection in the region by 2025.
As internet penetration and smartphone adoption increases, online travel activity throughout the region also grows. Phocuswright says online accounted for 37% of all bookings in Latin America in 2018, but that number will increase to 43% by 2021.
“We still have a lot of presence of traditional tour operators for first-time travelers, but then as they get a little bit used to travel, by the second or the third time, they’re going online, and they book through the online travel agencies and with the airlines,” Sass de Haro says.
“But the new generations, they are digital already. No matter what income level they have, they are not going to buy from the traditional tour operators.”
To understand the habits and preferences of these travelers, Expedia Group Media Solutions surveyed 1,000 people each from Argentina, Brazil and Mexico who had booked online travel in the past year for its 2018 Latin American Travel & Tourism Trends study.
The survey found these travelers take an average of four trips per year, and their average leisure trip length is 10 days – more than other countries surveyed including the United States, the United Kingdom, Germany, France, China and Australia.
But despite taking multiple trips per year, six in 10 Latin American travelers have not selected a destination when they first decide to travel.
Expedia Group Media Solutions’ director for Latin America, Ana Paradela, says this is an opportunity for brands to attract these travelers by sharing relevant content on multiple platforms.
The Bottom Line:
Latin America is both a destination for travelers and the source of a growing travel industry clientela. Also, recent studies indicate that this travel market is bursting on the mobile and online booking scene. Expedia Travel Group reports that, although the older generation may book through traditional agencies when traveling for the first time, the younger generations are completely bypassing in-person bookings for online opportunities.
Despite stereotypes, Latin America is very connected to both online platforms and mobile applications, with the in-house wifi connection increasing by over 103% between 2010 and 2016. Also, in the next year, it is predicted that 78% of all cell phones across the region will be smart phones– a trend which also greatly facilitates the mobile travel market.
With Latin American tourist destinations attracting both regional and distant visitors, and the local populations gaining more mobile access, travel traffic in Latin America is only expected to continue growing.
For the source of this original article, and more fascinating and cutting-edge travel news, visit: https://www.phocuswire.com/Latin-America-part-1-overview