Latin America: Gross bookings expected to decrease 59% overall
- August 2020
- Phocuswright Research
Before the coronavirus pandemic was spreading across the globe, Latin America was undergoing political, social and financial crises that negatively impacted the region's economic health. Latin America experienced sluggish 0.5% GDP growth in 2019 and, prior to the pandemic, the World Bank forecast a modest 1.8% rise in GDP for 2020. Currency devaluation occurred across several countries, including Argentina, Chile and Brazil.
In June 2020, the World Bank downgraded its Latin American GDP forecast, predicting a 7.2% economic contraction overall, as economies in every Latin American country were projected to shrink. Political turmoil, social inequality and poor public health infrastructure created a ripe environment for the proliferation of COVID-19. As the pandemic magnified the region's underlying problems, national governments in each country announced social and economic support measures, including easing bureaucratic labor laws, providing emergency stimulus checks to the unemployed, and shoring up local governments and businesses with credit lines and emergency aid.
Although federal aid-type measures have been put in place, for example in Brazil, some of the relief still hasn’t reached its intended recipients due to lack of internal capacity or available systems in some countries.
These geopolitical factors have acutely impacted Latin America's travel market. According to Phocuswright's latest travel research report Latin America Travel Market Update 2020, gross bookings fell more than 6% in 2018 to $55.5 billion (see Figure below). Travel revenue rebounded slightly in 2019, rising 3%. However, the coronavirus pandemic will put an end to any further travel market recovery in 2020. Gross bookings are expected to decrease 59% overall in the region with each country suffering revenue declines ranging from 44-63%. Clearly, Latin America is a large geographic region with many diverse countries, cultures and languages. The countries analyzed in this report have been chosen for their travel market size and impact.
The full Phocuswright research report presents a high-level overview of the Latin America travel market in 2020 (Argentina, Brazil, Chile, Colombia and Mexico), including the impact of the pandemic on major players, key segment analysis, and sizing and projections through 2020. Download the report here.