With incredible variability, the LATAM travel market continues recovery
The region has been on the upswing and the future appears promising.
There is good reason for optimism regarding the future of Latin America's travel market, as the COVID pandemic eases and new political leaders try to improve financial stability and income equality in the region.
According to Phocuswright's latest travel research report Latin America Travel Market Report 2021-2025, a return to pre-pandemic gross bookings is anticipated by 2023, with the reopening of many destinations and upcoming elections boosting future prospects.
Dominant domestic demand
With the notable exception of Mexico, local, domestic leisure travel buoyed the industry in most nations.
Domestic tourism will continue to drive travel market growth, as Latin Americans take advantage of currency conversion rates favoring local exchanges, and elevated airfares keep some foreigners away.
Travel gross bookings are expected to increase 37% to $48.1 billion in 2022; recovery to pre-pandemic levels is projected to occur the following year, when revenue tops $57 billion.
Still, the region's systemic economic problems will not be easily overcome. After an initial post-pandemic rebound, Latin American GDP growth was predicted to slow to 2.4% in 2022, as continued supply chain disruptions, COVID variants and tight financing conditions take a toll on the overall outlook.
Variability and a surge in revenue
With incredible variability, the Latin America travel market began recovery in 2021.
- New COVID-19 infections and deaths are declining throughout Latin America.
- The elimination of many travel restrictions and alleviating some of the region's economic pressures.
- Vaccination rates in every country reported on exceeded the global average.
- Strong domestic demand helped steady the travel market.
- In Mexico, few - if any - restrictions on foreign visitors, which lessened the impact of the pandemic on its tourism industry.
Against this backdrop, Latin America travel revenue surged 51% to $35.2 billion in 2021 (see figure below).
Did you know?
Cancún International Airport became the tenth busiest airport in the world in 2021, serving more than 13.2 million passengers.
This report provides market sizing, projections and key segment analysis for the Latin America travel industry through 2025, with a focus on Mexico, Brazil, Colombia, Chile and Argentina.
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