Latin America awaits the return of tourists

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“PERÚ, DESPEGUEMOS nuevamente ”(“ Peru, let’s go ”) pleads the slogan in large letters on the glass facade of the terminal at Lima airport. In the Plaza de la Independencia, in the colonial heart of Quito, the capital of Ecuador, a small group of blond tourists looms like an exotic species in a sea of ​​black haired street vendors. From the beaches of the Caribbean to the lakes of Patagonia, the question that arises is the one asked at the beginning of the year in a cartoon by El Roto in El País, a Spanish newspaper. He drew two empty lounge chairs, one asking the other, “Do you think they will come?” “

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The answer counts. Tourism plays an important role in most of the economies of Latin America and the Caribbean. On a simple average of the 34 countries of the region, it represents about 20% of GDP, according to an index established by the Inter-American Development Bank (IDB). The figure ranges from over a third for several Caribbean islands to 15% in Mexico and 8% in Brazil. In addition, tourism provides a significant share of employment, from around 80% in Aruba and Antigua to 13% in Mexico and 8% in Brazil. The Caribbean also depends on tourism for foreign currency and accounts for around 10% of Ecuador and Peru’s export earnings.

Foreign tourism to the region has declined in the past due to international crises. In 2009, during the financial crisis, it fell by 5%. But this time, “tourism was shut down like a tap,” says Henry Mooney of the IDB. Arrivals fell 70% in 2020, as countries of destination and origin closed their borders. The World Travel and Tourism Council (WTTC), an industry body, estimated that the region’s tourism industry as a whole lost $ 230 billion and 12.4 million jobs in 2020. Airlines in Latin America have been beaten. Latam and Avianca, two of the three largest carriers, have filed for bankruptcy protection. Last year, tourism revenues in the Caribbean were only a quarter of what had been projected.

Today, a modest recovery is underway, especially in the Caribbean, as vaccination progresses and borders are reopened. Cruise ships are sailing again, even though they are struggling to adapt to health regulations. The Americans are returning to the beaches. The WTTC says tourism is recovering faster in the Caribbean than in other parts of the world, with an expected growth of 47% this year compared to last year, meaning additional revenue of $ 12 billion dollars.

Reopening is slower in South America, a longer flight from most major markets. Latin Americans and Americans are coming back, but not Asians or Europeans, says Pedro Morillas, who owns a four-star hotel with 350 rooms in Cusco, Peru. “We had a lot of bookings for the second half of this year, but many were canceled,” says Roque Sevilla, the boss of Metropolitan Touring, a major tour operator in Ecuador, which owns three ships in the Galapagos Islands and a retreat in a cloud. Forest. With tours starting at $ 5,000, excluding international flights, for many, “Ecuador is the trip of a lifetime and they want to be sure they won’t be restricted and are safe.” Many in the industry believe that travel will not reach its pre-pandemic level until 2024.

For some, it will be too late. A February survey of 255 businesses by the Caribbean Hotel and Tourist Association found that 14% of them likely would not reopen. For others, the slow recovery means a struggle to adapt. Mr Morillas’ hotel occupancy rate, normally 85%, with almost all foreign tourists, has fallen to zero, forcing him to lay off his 150 employees. “The blow was sudden and drastic,” he says. In the absence of income, interest charges on his debt to the bank accrued. But the hotel is open again, it has rehired 15 people and negotiated a grace period on the bank loan. “The hotel will survive,” he said.

Part of a large conglomerate with deep pockets, Metropolitan Touring was in a better position. Mr Sevilla continued to pay his 850 workers 75% of their wages for a year before reluctantly sacking 85. He lowered the prices and found a new market with Ecuadorian tourists. Latam and Avianca are on the verge of coming out of bankruptcy.

Governments can help accelerate the recovery, Mooney said, by working with the industry to coordinate health protection measures throughout the tourism chain and to conduct marketing and market research. “People will travel differently and need different things,” he says. Many Latin American countries are on the verge of exceeding their pre-pandemic level of economic production. But employment is lagging behind. The sooner the tourists come back, the sooner this will change.

Read more from Bello, our columnist on Latin America:
Will the electoral defeat favor moderation in Argentina? (November 20, 2021)
President Jair Bolsonaro is bad for the Brazilian economy (November 13, 2021)
Revulsion in Venezuela fuels hard right in Latin America (November 6, 2021)

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This article appeared in the Americas section of the print edition under the title “Waiting for the return of tourists”

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