How is the tourism industry in South America doing?

After the deceleration that had been occurring until 2015, the tourism industry in South America had an accelerated growth in 2017; In this period a rate of 5.5% was reached, according to Marketline. This acceleration of the industry is largely due to the economic development of Brazil, being the largest market in the region with 61.7% of the total value of the tourism market.

Within the economic segments that make up the commerce industry, the one with the highest value in 2017 was food and kitchen services, which generated close to 166.9 billion USD, which represents 67.2% of the value of the industry, according to the Marketline portal. The segment that follows is that of hotels and motels, which generated profits of 21.5 billion USD, equivalent to 8.7%. The airlines in turn participated with 7.7% of the market value.

Brazil continues to be one of the main tourist destinations in the region due to the variety of offer that its great territorial extension presents. In 2017, this country had gains of USD 153.2 billion. The second tourist market in the region is Peru, which in 2017 had profits of 26.1 billion USD, representing 10.5% of the value of the region. Chile and Argentina ranked third and fourth in 2017, reaching USD 25.4 million and USD 20.3 billion, respectively, representing 10.2% and 8.2% of the value of the South American market. The rest of the countries of South America represent only 9.4% of the total market value, generating together 23.3 billion USD.

The tourism industry is expected to continue its growth in the short term, with an average growth rate of 6% between 2018 and 2022. This growth may be affected by the policies implemented by the governments elected this year, since six countries of the region have presidential elections. Although at present the environmental issue, the orange economy and sustainable development are the flags of almost all the candidates in the region, a look at the performance of this sector during and at the end of the governments will be a very telling indicator of the true management developed by the South American governments.

This industry has been gaining more attention, at least discursively, in recent years, being one of the campaign banners of many Latin American politicians. One of the most important elements of this industry for the Latin American region is that it represents the possibility of a diversification of the economic income of the countries. Historically, extractive economy models have been dominant and in many cases mono export, with a heavy dependence on hydrocarbons and mining, which have considerable environmental impacts. That is why projects focused on tourism, particularly the promises of ecological and sustainable tourism, have penetrated so deeply in the new generations of the region, which in the coming years will boost consumption in this area.

The governments of the region have a great responsibility to provide and improve the existing regulatory frameworks in their countries, taking as a reference the sustainability and care of the environment. At the same time, they ensure that the industry provides the necessary incentives for investors and tourism providers to make the leap towards more environmentally friendly production models that show a much richer and interesting tourist offer for new generations. 

Latin American Post | Juan Sebastián Rojas

Translated from "¿Cómo está la industria del turismo en Sudamérica?"