Brazilian government seeks to encourage travel
Sunday, 29 Jun, 2009
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The worldwide economic crisis, coupled with recession fears in Brazil, is putting pressure on the country’s travel industry.
According to Euromonitor International, tourism expenditure in Brazil is expected to grow on average by 5.7% annually, down from the 8.7% average annual growth seen between 2003 and 2008.
The government, in addition to current activities, has taken steps to bolster the industry.
Government action to foster travel growth
The provision of enhanced credit lines to stimulate domestic tourism as well as the elimination of any barriers hindering pricing competition or tourism flows were some of the immediate actions taken by government authorities to prevent a slowdown.
In April 2009, Caixa Econômica Federal, a popular bank, and the Ministry of Tourism introduced the Caixa Fácil credit line, a brand new line introduced to further stimulate demand of travel and tourism products and services in Brazil through long-term financing options of up to 24 months. Interest rates are determined by the Bank.
Another measure taken to enhance demand was the removal of pricing floors on international airfares for Brazilian and international airlines granted by the National Agency of Civil Aviation (ANAC) in May 2009.
The pricing floor will gradually be removed in phases until April 2010, when they will be completely eliminated. By then, airlines flying to and from Brazil will be able to set their own prices. The initiative is likely to encourage more international travel as airlines discount fares to stimulate traffic.
Since the announcement, British Airways and Iberia have lowered prices by almost 20%. However, a lack of open skies agreements will continue to limit the number of routes and carriers flying internationally.
In June 2009, Brazil and Colombia also eliminated mutual restriction on entries in an attempt to increase intra-regional travel in light of the economic slowdown. This means Brazilians and Colombians do not need to carry a passport or a yellow fever vaccine card when traveling between the two countries. This is set to have a positive impact by allowing more people to travel without the added expense of a passport or a vaccination.
Short term prospects dim, but World Cup 2014 shows potential
These recent measures are positive moves to increase both demand for travel among Brazilians and international travel to the country by making it easier and less expensive.
However, the global economic uncertainty is likely to put a damper on travel demand in the short term, but these measures are expected to contribute to a stronger rebound.
The bright spot is the World Cup in 2014, which will foster the Brazilian travel and tourism product over the next five years.
Aside from implementing a powerful web marketing platform and feeding it constantly with news and events on travel and tourism in Brazil, government authorities are currently revising tourism strategies in place to undertake large infrastructure projects that have been on hold since 2006.
In addition focusing on stadiums and hotels, government authorities have allocated nearly R$5 billion to improve and expand main Brazilian airports – Guarulhos (SP), Manaus (Amazonas), Fortaleza (Ceará) and Brasília (DF). Issues related to security, organization, transportation and overall facility conditions are expected to be the highest priorities.
Phil Davies
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