The natural, cultural, and gastronomic resources that Latin America possesses allow it to generate great wealth and opportunities through tourism for those involved in this high-impact sector. If these elements are exploited conscientiously and equitably, the sector could become one of the most important economic drivers.
The role of tourism in the economy cannot be overlooked, and the annual statistics demonstrate this: in 2019, according to a report by ECLAC, tourism accounted for 42% of the Caribbean’s exports and 10% in Latin America. Additionally, it contributed 26% of GDP in the Caribbean and 10% in Latin America, while generating 35% of employment in the Caribbean and 10% in Latin America.
Undoubtedly, there was a scenario pointing to success, but unfortunately, the COVID-19 pandemic emerged, halting the world for a few months and severely affecting tourism, which contracted by 73%, leading to revenue losses of over 900 billion dollars.
However, Latin America did not give up. Once restrictions were lifted, tourists packed their bags and set out to have fun, even achieving statistically higher results than before the pandemic. The pandemic completely changed the mindset of travelers, who now seek to experience local cultures and are willing to pay more for sustainable destinations, such as ecotourism, agritourism, and gastronomic and cultural tourism.
This outlook allows industry players to ask themselves: is tourism on the road to recovery? Everything seems to indicate that it is, and now it remains for both sides to continue playing their roles and contributing to making tourism increasingly sustainable and productive.
Post-Pandemic Tourism Recovery
According to data from the World Travel & Tourism Council (WTTC) in 2023, the travel and tourism sector in Latin America exceeded 2019 revenues by 3.7 billion dollars, representing 7.8% of the regional economy, which translates to 367.4 billion dollars.
Tourism generated 110,000 new jobs in 2023, bringing the total number of workers in the sector to 17.33 million in Latin America alone.
Julia Simpson, President and CEO of WTTC, stated that: «The outlook for the travel and tourism sector in Latin America in 2024 is very optimistic; it reflects the enormous potential of the region to drive economic development and create job opportunities. The growth of tourism in Latin America not only surpasses pre-pandemic figures but also demonstrates the resilience and adaptability of the sector.»
The region’s rich natural heritage gives its countries the opportunity to continue showing positive numbers, meeting projections, and potentially even surpassing them, as Latin American tourists, although they tend to take shorter trips, do so more frequently and prefer destinations close to home.
Top Tourist Destinations in Latin America
At the International Tourism Trade Fair (FITUR) held in Madrid in January of this year, the WTTC indicated that Latin America is experiencing growth in tourist arrivals, surpassing 2019 statistics.
Their analysis highlights a 157% increase in arrivals in El Salvador compared to the same period in 2019, followed by Nicaragua (+142%), Guatemala (+52%), Honduras (+49%), Costa Rica (+35%), Mexico (+31%), and Colombia (+23%).
It is also noteworthy that, according to a report by the World Tourism Organization (UNWTO) presented in 2023, one Latin American country is among the top 10 most visited countries in the world. Mexico ranks 7th, a place rich in culture and heritage that attracts tourists from all over the globe.
Despite this significant position in the sector, it is acknowledged that Latin American tourism still has a long way to go and faces noticeable challenges, such as the loss of cultural identity and the gentrification of highly visited destinations, which may lead to dependency on a single sector.
The report «Evolution and Challenges of the Tourism Sector in Latin America,» published by OBS Business School and led by Professor Albert Guivernau, notes that 70% of tourists stay for an average of 4 to 13 nights, a figure that cannot be ignored, as this results in substantial revenue for the industry, with visitors spending more money during that time.
Travelers taking shorter stays in Latin America account for a lower percentage, ranging from 7% to 23%. There is no doubt that there is a great interest in visiting the territory’s offerings, such as beaches, natural parks, and historic sites, prompting longer trips.
Recapping 2023, the region welcomed 117 million international tourists, an increase of 12% compared to 2019, with Mexico leading the list with 45 million, followed by Brazil and Argentina with 6.35 and 7.4 million tourists, respectively.
One of the main reasons for the increase in tourism is the economic growth of countries like Peru and Colombia, which saw a rise in their Gross Domestic Product (GDP) and invested it in tourism infrastructure, facilitating access to remote destinations and improving the travel experience.
Challenges and Opportunities for Latin American Countries
Despite the growth in recent years, Latin American tourism still faces challenges, one of which is infrastructure. Many recreational destinations lack the facilities in optimal condition to handle large tourist flows. The absence of proper roads, equipped airports, and quality basic services limits the industry’s development.
One of the most significant challenges in the region is security, as violence and crime generate fear among tourists, who sometimes decide to cancel their trips. Honduras and El Salvador are two of the countries most affected by these factors, having struggled hard to attract tourists due to their high crime rates.
The perception of safety in a country is crucial for attracting travelers, as without it, tourists will only move further away from Latin America and choose the Old Continent, which occupies the top spot in the global visitation ranking.
Even while grappling with these challenges, the WTTC has a promising projection for the next decade in the region, highlighting solid economic growth and unprecedented job opportunities. They estimate that by 2034, the sector will contribute 498 billion dollars to the economy, accounting for 8.3% of the regional GDP.
Additionally, they foresee that it will provide employment to 22.43 million people, meaning that 9.6% of the labor market in Latin America will be covered by the travel and tourism sector. Clearly, this is the moment for it to be responsibly and equitably exploited.
