Latin American governments encourage new travellers

TravelMole guest comment by Euromonitor Americas travel and tourism manager Michelle Grant.

According to research from market intelligence firm Euromonitor International, in 2006 almost 47% of the Latin American population did not take a holiday.

With such a high proportion of non-holiday takers, governments throughout Latin America are undertaking efforts to encourage more travel among their populations in an effort now being called “social tourism”

Overcoming obstacles

Local governments are tackling the main deterrents to holiday taking: lack of time and money.

In past years, countries such as Mexico have passed laws requiring that public holidays falling on weekends be moved to a weekday, creating three day weekends for employees in the formal sector.

As Latin American residents may not have extra money for travelling, government agencies have begun to offer accessible financing programmes for trips and discounted packages. For example, the Brazilian Ministry of Tourism announced in July 2007 the availability of tourism packages to visit the north-eastern part of the country at a cost of 12 monthly payments of 60 reais—around US$30. Pensioners were the first permitted to purchase these packages before the government launches a broad program for other groups. Additionally, efforts are aimed at promoting travel by the governments during the less expensive off season.

Objectives for social tourism

By encouraging the growth of domestic tourism, Latin American governments hope to alleviate seasonality issues, create jobs in the tourism industry and protect the country against external shocks that can cause international arrivals to the country to decline.

In particular, Mexico hopes that social tourism will help build the tourism industries of emerging regions, like Morelos and Guerrero, and stimulate economic activity among SMEs.

Other Latin American governments hope that by encouraging travel and relaxation among its citizens, this will result in a well-rested and productive work force, which will ultimately boost revenue. Additionally, the governments would like domestic travel to bring about an increase in national pride and greater acceptance among the different regions, cultures and ethnicities.

Social tourism -a new consumer target

The inclusion of new, low income travellers is expected to increase demand for many travel services.

Low-income families regularly purchase household items using instalment plans in Latin America, making a similar system in travel a natural transition.

Low cost industry suppliers are expected to benefit, particularly airlines, as these novice, price sensitive consumers seek the best value with financing that is accessible.

Travel retail companies will also benefit by offering favourable credit terms to these newly enfranchised travellers. Underdeveloped destinations, such as the north-eastern part of Brazil, are likely to benefit as Latin American governments encourage investment in travel infrastructure such as roads, airports, hotels, labour training and tourist activities to lure price conscious travellers.

These combined efforts will result in more citizens becoming accustomed to taking their holiday each year and in time, encourage multiple trips rather than not taking a trip or taking trips every couple of years.

This will likely improve the proportion of holiday takers in Latin America and increase spending on travel and tourism services.