Travel to Latin America could take until 2025 to recover to pre-Covid levels, according to the latest industry forecasts, with demand from UK travellers unlikely to return until the second half of 2021 at the earliest.
Speaking at the opening session of Latin American trade show Lata Expo, for which Travel Weekly is trade media partner, Caroline Moultrie, managing director of MMGY Hills Balfour, said travel and tourism had grown faster than the rest of the Latin American economy in 2019, accounting for 1.6% of growth compared to 0.4% across the region, until passenger numbers fell dramatically in March 2020.
Current recovery scenarios, based on World Travel & Tourism Council data, predict 6.1 million tourism sector job losses across Latin America and the Caribbean and a $109 billion hit in tourism revenues (against 121.1 million tourism job losses globally and a $3,435 billion loss to international travel), though worst-case scenarios could see even an greater impact on the region.
Moultrie said: “Travel and tourism is a real driver of the economy.
“According to Iata, we’re looking at a four to five-year time frame to recover to pre-2019 levels.
“If we don’t get a strong 2021, the foundations for 2022 and beyond start to get even more worrying.”
Forecasts suggest that the number of passengers travelling to Latin America could reach 71% of 2019 levels by next year then gradually rise in subsequent years until finally matching pre-Covid figures by 2025.
Sarah Bradley, managing director of specialist tour operator Journey Latin America, said: “For those of us who operate to Latin America, most have discounted the first quarter [of 2021] because the lead-in time is so short now for the January to March period.
“Most of the people who were due to travel this year have postponed rather than cancelled – initially it was about 50/50, but from July onwards about 75%-80% of people are postponing – so the period from April onwards looks very strong compared to normal.”
Quoting a recent customer survey, Bradley said: “Fewer customers now think they’ll be travelling to Latin America in 2021, which I think is really because of the shortened time frames, but more of them think they’ll be travelling in 2022. I think this points to a longer recovery.
“Because of the long lead time, 2021 is probably going to be quite tough. I think we’re all hoping for a good second half of the year, but we’re also gearing up for the fact that if things change imminently, I think there will be pent-up demand from people who desperately want to get away.”
Colin Stewart, Lata chairman and UK and Ireland director for Air Europa, said air connectivity would be slow to recover given the drop-off in demand.
He said: “We were flying to 23 destinations in Latin America, and the majority of those were daily services. We started flying again in July to one or two destinations but even as of today, we’re limited on the number of destinations we’re flying to and we’re starting off with once or twice a week maximum, because the demand isn’t there to justify anything more.
“The approach we’re taking is about starting off small and building up as and when we can. I think there are still opportunities for growth but we’re starting from a very low base in terms of demand.
“The airlines are ready, they can’t wait for the demand to come back, but they’re not going to be putting on the capacity they had before. They’re going to start off very slow and build up as the demand increases.”
Lata Expo runs each day this week as a virtual event. For more information, visit lataexpo.travel.
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