Domestic tourism is the driver of travel in the Americas

02-12-23

WTM Global Rep is an exclusive compilation of international surveys that provides an in-depth analysis of the sector's performance in 2023 and a global view of the outlook for domestic and international tourism travel in the coming years.

Edited in collaboration with researchers from Tourism Economics, an Oxford Economics company, and released at WTM London last week, the report uses an extensive databank covering nearly 185 countries to provide analysis from both destination and outbound market perspectives and reveal data related to visit flows, nights and expenditure. The document also considers the impacts of challenges such as inflation, cost of living reductions, strikes, staff shortages and natural crises, among others, on activity.

The Americas segment shows the recovery of business by travel companies in the main markets, driven by the increase in domestic tourism. The report projects that the domestic segment in the Americas will end 2023 with values 31% higher than those obtained in 2019 and shows all countries with better results than those presented in the last year before the onset of the pandemic.

In the analysis by country for 2023, Brazil is in the third position in domestic tourism and should maintain it in 2024. The forecast is to end this year with an increase of 118% over the results before the pandemic - behind Mexico, which should have an increase of 144%, and the United States, with a projected increase of 130% in domestic spending. Another highlight is for Venezuela, the seventh largest domestic market in the region, but which should grow 325% domestically compared to 2019.

In relation to the reception of international travelers, meanwhile, projections show results below those presented before the pandemic, both in volumes and values for the American markets as a whole. The expectation is that the region will receive 117 million tourism travelers in 2023, a number 4% lower than in 2019, with a drop in earnings of 2%.

The report points out that inbound tourism from the United States, the largest market in the region, will present a 17% drop this year, but will recover in 2024, when it should be 8% higher than the result presented in 2019. Among the positive highlights, two countries appear with projections that place them in second and third place in the ranking of the Americas: Mexico, with the prospect of growing 128% in relation to 2019; and Canada, with a projected increase of 107%.

Brazil should register a 112% increase in inbound, which places it in seventh position in 2023.

In fourth to sixth place are, respectively, the Dominican Republic, Colombia and Panama. Bahamas, Costa Rica and Puerto Rico round out the top 10 largest tourism destination countries in the Americas. In the comparison between 2019 and 2024, the forecast is for Brazil to drop one position and Cuba to enter the list, in seventh place - the ranking remains unchanged from first to sixth place. Costa Rica is in ninth place and Argentina appears in tenth place.

The 70-page report further reveals that the number of tourism trips taken in 2023 will be only 10% lower than the 2019 peak. Meanwhile, the value of these trips will close the year with positive numbers due to price increases caused by a combination of rising fuel costs, staffing and financing for the aviation sector, among others. Still, consumers-especially those in more developed economies-have been prioritizing spending on leisure travel in the short term.

According to the study, "Rising costs combined with potential changes in consumer outlook pose a threat to the industry, but there are currently no clear signs that costs are an impediment to travel volumes." The trend is for tourism travel search to be "robust" in 2024, with domestic tourism performing well.

By 2033, the projection is for the United States to consolidate its position as the world's second largest inbound leisure market, with results 82% higher than projected for 2024. This places the country among the ten largest global markets, behind only China (+158%), Thailand (+178%) and India (+133%). Mexico and Canada should register, respectively, increases of 80% and 71% in international tourist arrivals over the next decade. By 2033, global expenditures with tourism travel are expected to more than double from 2019 levels.