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South American tourism hurt by loss of US spending

US spending into South America is forecast to drop by 44.4% between 2020 and 2021 as travel restrictions due to COVID-19 have stymied visitor flows. Having featured in the top ten international arrivals in all the five major economies across South America in 2019, the reduction of this source of market will be detrimental for the travel sector. A proactive approach in engaging US tourists should be considered vital to stimulate recovery for when it is possible.

US travelers spent over US$38.8 billion across South America in 2019 with a year-on-year (YOY) growth of 7.3% from 2018. This represents a compound annual growth rate (CAGR) of 7.3% for the period 2017-2019 (spending was US$33 billion in 2017). This is set to reach US$54 billion by 2024, highlighting that there is clear opportunity for growth post-COVID-19.

Both the US and Brazil are currently identified as holding the highest number of COVID-19 related deaths, as well as the highest number of cases. While both countries have restrictions in place, this does not mean opportunities should be ignored.

Typically noted as one of the highest spending markets for the region, destination marketing organizations (DMOs) should be proactively launching captivating content to engage US travelers. Latest survey found that 32% of US travelers do plan to reduce their international travel plans, however, if DMOs are able to engage with travelers, and dependent on the progression of COVID-19, this will help South America on its road to travel recovery when possible.

With 30% of US travelers browsing social media more, 23% spending more time actively watching videos/vlogs about product usage and 24% more commonly reading online reviews/blogs (taken from the same survey) there are clearly still multiple opportunities to engage with the US source market.

Regional travel will be vital for South America’s recovery as neighboring destinations commonly depend on each other for a large number of arrivals per year. DMOs however, should also be looking to the long term and beginning to plan where opportunity lies and how to engage with this in the future travel space.


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