All eyes on LATAM: What we can learn from latin america’s travel renaissance.
Latin America contains many major cities that are attractive for business travel – Mexico City, Rio de Janeiro, and Buenos Aires just to name a few. Latin America was also one of the regions worst affected by, Colombian airline Avianca being one of the first globally to declare bankruptcy in 2020.
But now, over three years on from the onset of the pandemic, what does the state of Latin American corporate travel look like now? To get that answer, we need to look at leisure tourism as well.
A solid resurgence
Tourism in Latin America is showing solid signs of recovery, even reaching pre-COVID-19 levels. Both outbound and inbound tourism travel have registered positive numbers that contribute to the regional tourism GDP growth of 48.2% compared to 2021, as stated by the World Travel and Tourism Council, and generating income worth US$233million throughout the America continent. In the first five months of 2022 passenger transport has increased 181% compared to the same period in 2021, according to the International Air Transport Association (IATA).
The figures presented by the Mexican Ministry of Tourism at the end of 2022 show a recovery of 81.3% of visitors and an economic revenue recovery of 95.6%, compared to what was registered in 2019. Due to this, the Ministry estimates that economic recovery will be at 100% by the end of 2023, since tourism and cultural activities have already resumed in their entirety.
But what does this mean for business travel?
Throughout the region, one of the main factors that has led to a growing recovery in corporate travel is the ”bleisure” trend. Many companies that used to make frequent short-stay corporate trips have opted to send their employees on fewer trips, but for longer stays. This allows travelers to not only to carry out their work responsibilities, but also to get to know the area or to engage with leisure activities. This has led to the trend that short trips to simply attend a meeting and return immediately will become less and less frequent, and will be instead replaced by longer trips that combine work with leisure time.
This is consistent with a recent study conducted by Morgan Stanley, which highlights that U.S. hotel chains have detected an increase in corporate bookings and stays from Thursday to Sunday, a clear indication of a combination of corporate and leisure travel.
A focus on market competitiveness
One of the general goals for airlines in the region is to leave behind the effects of the pandemic on their operations, which is why companies are adjusting their strategies in an increasingly competitive market.
Tourism has driven the air recovery in the Latin American region. The next step is the consolidation of airlines into large groups, which will increase the growth of this market over the next 15 years.
This groups, or alliances, open the possibilities for new business models in the Latin American and Caribbean market. As an example of these strategies, the Chilean National Economic Prosecutor's Office (FNE) approved two major agreements last year: LATAM Airlines-Delta and Jetsmart-American Airlines, strategic alliances that will increase the presence and connectivity of Chile and Latin America with the American market.
Ready to talk about your Latin American travel operations?
FCM is here to help. Our team will be at GBTA Convention 2023 in Dallas, TX, USA from August 13-15th and we can’t wait to speak with you. Book time to meet with one of our Mexico or Latin America team members today. Aren’t attending GBTA 2023. No problem! Schedule a virtual meeting and demo with us.