Nicolás Raffo Menoni

The latest tourist news from Uruguay, in South America

Another article by the author: Hablando de Turismo. A view from the south

Uruguay has always been a country that has always been characterised for being a destination for tourists, mostly from Argentina and Brazil, which are the bordering countries that have a direct border with our territory and that in normal conditions, and depending on the reference year, contribute between 70 and 80% of the total arrivals.

Looking at the current reality of our region in terms of tourism (this analysis is made in mid-July 2022), we see that the situation has changed and that our country is now the second destination of origin for Argentina, only behind Brazil, both in terms of the number of tourists and the recovery of markets. In May this year, the pre-pandemic figures for May 2019 were exceeded by 163%.

If we look at the reference numbers for Uruguay, we see that the outbound trend does not stop and is growing; in the first two weeks of July, 163,810 Uruguayans left and 74,000 foreigners entered in the same period (according to figures from the National Directorate of Migration).

In proportion; for every 4 Uruguayans who left the country, 1 Argentinean entered, or for every 10 Uruguayans who left the country, 1 Brazilian entered Uruguay (both countries have respectively 13 and 60 times more population than our country, which illustrates the current imbalance).

I would love to be able to send an optimistic and more encouraging message, but in the current macro and micro economic situation, our prospects for receptive recovery are complicated in the short and medium term for the following reasons:

1) according to a Bloomberg report, our region will continue to be complicated, with Argentina and Brazil being two countries with serious default risks by 2022 (they rank 7th and 11th globally), which will force them to have to continue taking defensive measures that will stop or slow down the outflow of their residents.

2) the outflow of Uruguayans abroad will continue to be favourable due to exchange rate differences, which will also have an impact on domestic tourism.

3) air connectivity remains flat compared to the pre-pandemic and there is no prospect of improvement until 2024; to date, almost 30% fewer seats are planned to and from our country.

4) airfares will increase due to higher oil prices and/or the introduction of more sustainable but more expensive fuels.

5) connectivity has been lost with one of the main outbound destinations in terms of spending, such as the United States, and although a return to operations was announced in October, scheduled flights do not move the needle and are to be confirmed (American Airlines raises and lowers scheduled flights at its convenience).

6) our promotion abroad is lukewarm and shows no signs of being very effective, at least in the short term and in view of the bookings scheduled for the future, partly because of the serious difficulties being experienced by our neighbours, who are our main tourist partners.

7) we are subject to strong ups and downs that we do not control, such as the cancellation of the 21-22 Cruise Season due to the measures applied by Brazil to the detriment of other countries in the region.

8) Our country is lagging behind in terms of investment in technology and innovation, especially in the private sector, where the Mypes (micro, small and medium enterprises) are the vast majority in the tourism sector, which hinders the speed of reaction and response, at a time when the Big Data and the possibility of having real-time information are a real differential or a competitive advantage.

9) we have a strongly seasonal tourist flow in most of the destinations we offer at a national level, except in the case of Montevideo, which is the capital of the country, and to a lesser extent Colonia.

Based on the above and the current figures, we do not see a significant recovery in tourism in the short term.

If there will be a better next season than the previous one, because the previous one was simply bad or poor; whatever you want to call it, since in the first quarter of 2022 almost 400 thousand tourists entered (which is approximately 40% of those who entered in the same quarters of 2019 or 2020, which are the last "normal" quarters of reference).

We can get out of this situation by working and contributing together; with a strong analysis of the current situation and looking at which variables we can establish a sustainable competitive advantage in the medium and long term.

Our country must adopt a proactive strategy, aiming to establish a strong image that can and wants to be communicated and that can be experienced by those who come; an image that must be real and not aspirational (both internally, so that those of us who are the hosts are convinced of it, and externally, so that tourists can experience it and compare it with the image they have of our country today),

Although it may be an obvious and reiterated concept, today more than ever we have to aim for a national consensus, where all the actors in the tourism value chain can contribute their vision and their needs in order to establish a strategy with a better chance of success, which must necessarily be promoted and led by the government

Mag. Nicolás Raffo Menoni

The authors are responsible for the choice and presentation of the facts contained in this document and for the opinions expressed therein, which are not necessarily those of Tourism and Society Think Tank and do not commit the Organization, and should not be attributed to TSTT or its members.

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