Despite taking a pummeling from COVID-19 and a weak national economy, it could be worse: One thought among those who follow the course of the Brazilian economy and, in particular, its travel and tourism industry, is that the well-worn assessment of “it could be worse” is—believe it or not—an apt description of the situation for Brazil’s outbound tourism industry, especially as it compares to the United States.

Some of the headline numbers are daunting: At the time of this writing, Brazil, the number five overseas source market for inbound tourism in the U.S., with a population 212.5 million, had registered 2.7 million cases of COVID-19, with 93,000 deaths—about 1 out of every 2,285 residents. Only the United States, meanwhile, with a population of 329.9 million, had numbers that were worse: 4.8 million cases, 158,000 deaths, for an average of one fatality for every 2,087 residents.

On the Global charts for COVID-19, the USA is Number One, and Brazil is Number Two. China, interestingly (84,300 cases, 4,600 deaths) is No. 29.

Into the mix of factors that might warrant further pessimism is/was the state of Brazil’s economy. In April, it seemed as if the nation was about to experience another economic recession—just four years after the end of the country’s worst recession (called simply, “La Crise”) that hung around from 2014 into 2016.

But then, on July 22, as reported by Reuters, Brazil’s economic policy secretary, Adolfo Sachsida, speaking during an Exame Research online event, said all the forecasts for a decline in gross domestic product of 6.5 percent or more this year will have to be revised, and the downturn will be much closer to the government’s projected minus-4.7 percent. (The following week, the world learned that the U.S. economy had contracted by a record-breaking 32.9 percent annual rate for the second quarter of 2010.)

At about the same time, the monthly Brazilian Overview put pit by the travel trade publisher PANROTAS and the business publication FecomercioSP showed that the economic were spotty, but not woeful—inflation and interest rates were low for the month of June, and there was a small increase in one consumer confidence measure.

Could international travel resume in October? Also, on July 23, during a virtual panel discussion of steps that the tourism industry should take in order to maintain consumer confidence, José Guilherme Alcorta, CEO of PANROTAS, had a cautious, yet confident response when asked about the issue of when travel by Brazilians will resume. He said, “The perfect time to travel will only come when we have a vaccine. In the meantime, everything will depend on the risk that each one is willing to take. But I believe that the resumption of international travel should start in October.” (Travel from Brazil to the U.S. was banned May 25. On July 29, Brazil reopened international air travel to foreign tourists, which had been banned since March.)

“The expectation for the resumption is more pessimistic,” the sober-worded report tells us, adding, “If at the beginning of the crisis, most companies believed that it would happen in the months of May and June, now the stakes are in August or just at the end of the year. According to most companies, the return to normality will only happen in 2021, with close percentages divided between the first and second semesters.” (A semester equals six months.)

A joint project of the Brazilian travel trade publication PANROTAS and the Curitaba-based consulting firm MAPIE, the second edition of the report, PULSO TURISMO AND COVID-19, * whose first edition came out in April, was released at the end of May. Following are some key points from the study.

—55.52 percent of respondents say they had planned and / or purchased trips that were impacted by the new coronavirus pandemic. In this second edition, there is already more action on the part of travelers. At this time, 34.27 percent are still waiting to understand the next steps (before it was 45.45 percent), and the preference for 47.19 percent continues to be to change the trip to a future date.

—In general, the entire tourism chain was impacted by changes or cancellations. There was an increase in the percentage of contacts made since the first edition. The service providers that were most contacted by travelers were airlines (43.02 percent), followed by accommodation (37.43 percent) and traditional operators and travel agencies (17.23 percent)

—Tourism consumers keep an eye on the positioning of the brands and companies they follow. The number of consumers who said they will stop buying from brands that do not treat their employees/customers adequately during the pandemic and at this moment when the contamination curve is rising, rose to 55.17 percent (before 51.03 percent), 86 percent rate brands that encourage their customers to stay at home as responsible.

—The intention to travel decreased from the first to the second edition, which can be considered consistent with the moment, since the pandemic curve is growing in Brazil. In addition, confidence in tourism service providers has dropped considerably. Only 12.26 percent (before 22.68 percent) say they have total confidence in service providers.

—For most respondents, the travel budget was reduced in 2020. For 28.98 percent it remains the same and for 19.75 percent, it ceased to exist. There was no significant variation from the first edition

—In general, it is clear that customers are not only aware of new hygienic-sanitary practices and needs, but also want such conducts to feel safe. Masks can already be considered mandatory items in everyday life and also when traveling. 76.70 percent consider the use of masks in public / public areas essential to feel safe.

—Fear is a relevant factor in the decision to travel. 61.39 percent say they are afraid to travel and expose the family to the disease.

—The attention of companies has changed and now, the main focus is on maintaining contact with customers for relationships (65.14 percent). Then there are the actions to inspire future travel (64.59 percent). Managing cancellations and markdowns has moved to the third position (before the first).

—Most respondent companies have not yet made any layoffs, however this number went from 82.23 percent in the first edition to 68.32 percent in the second. We went from just 3.48 percent who had laid off more than 50 percent of the staff to 10.47 percent. In addition, 68.49 percent (formerly 49.32 percent) reduced the working hours and the remuneration of their teams.

—For 80.16 percent of the companies, it is essential that there is flexibility in the commercial policy, facilitating changes and cancellations and adjusting the forms of payment. Then, 78.05 percent consider it important to have a health seal or certification in airlines, lodging facilities and others to convey confidence to customers.

—43.21 percent totally agree that leisure tourism will be primarily regional and road in the coming months. The MICE segment will have to wait a little longer. For 41.73 percent of respondents, this segment will gradually return from 2021 onwards. 34.06 percent believe that corporate tourism begins to return little by little, as from the relaxation of the quarantine.

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* Important notes: 

• Be advised that this comes directly from the report discussed in this article, using a Google translation of the Portuguese-language document.

• PULSO TURISMO E COVID-19 is a series of research on travelers and tourism companies in this very troubled time, analyzing the impacts generated by the pandemic and the intentions for the resumption. The first edition was published in early April and this is the second edition, which also allows us to analyze the changes that occurred in this period. Both the first edition, launched in early April, and this second study can be downloaded for free at www.trvl.com.br (in Portuguese).

• For this research, an online panel was conducted with 416 Brazilian travelers from all regions of Brazil who made at least one trip in the last 12 months and 372 national tourism companies, predominantly travel agencies.

Brazil’s first in-depth survey of both the travel trade and travelers—taking into account the impact of the coronavirus pandemic—suggests that, once a market recovery begins to take effect, Brazilian travelers are likely to favor regional destinations before spreading out internationally. Travel suppliers, meanwhile, will have to tread gently in wooing customers, with brand loyalty playing an integral part in persuading consumers to travel again.

The above is a quick take on the first TRVL LAB—a new analytical project just launched by PANROTAS, the Brazilian travel trade publisher and event producer— and MAPIE, a leading hospitality and travel consulting firm which is based in Paraná, Curitaba, about 250 miles south of São Paulo.

The first TRVL LAB report was originally planned to launch March 17-18 at the PANROTAS Forum, which is a “must-attend” industry event held each year in São Paulo. But the Forum has been postponed until September 9-10. So, the TRVL LAB team went back into the field with the intention augmenting and updating their work in order to provide all interesting parties with their deep-dig research into the subject—conducted as the COVID-19 pandemic is taking place.

Researchers conducted two—one with 300 travelers and the other with 325 travel and tourism professionals. The results are open to all interested parties, said the report, “as we know that at this moment the analyzed and grounded information is very important in decision-making and planning for the future.”

Following are some of the key findings of the two surveys: (Note: We have rounded percentages to the nearest percentage point, and have occasionally change the language in some parts—it was a Google translation from Portuguese—for clarity.)

And when will we travel again? “What can be observed in concrete terms is that clients need to feel confident in controlling the disease before resuming their travels”, analyzes MAPIE director Carolina Sass de Haro. “This is also a delicate moment for brands, as consumers are attentive to the actions taken and the care shown by them in relation to customers and employees.”

The COVID-19 Impact—First Off:

—55 percent of travelers say they had planned and/or purchased trips that were impacted by the new coronavirus pandemic.

—45 percent are/were still waiting for the next developments to make a decision on what to do.

—When there is a decision, the preference is for the change to a future date to 31.82.

Who is most impacted by travel cancellations? In general, the entire tourism chain was impacted for changes or cancellations Service providers services most contacted by travelers were airlines (37.20%), followed by the media (24.91%) and by operators and travel agencies traditional travel (13.65%)

Importance of Brands: Most respondents fully agree with the statement that brands that encourage their customers to stay at home are responsible. In addition, 51 percent say they will stop buy from brands that have not treated customers/employees of adequately during the crisis.

What about international travel? International travel tends to remain affected after the resumption, since 61 percent affirming that they do not intend to return to international travel until that there is confidence in the control of the pandemic. This one number drops to 45 percent when it comes to national travel.

For most respondents, their travel budget was reduced in 2020. For 33 percent it remains the same and for 10 percent, nothing.

What about the travel trade? When it comes to companies, the vast majority are first dedicated to managing cancellations and markings (77 percent). Then, it was time to take care of team health and organize for the new conditions (35 percent), followed by cost and flow analysis of cash for the coming months (34 percent).

The vast majority of respondent companies still did not lay off. Only 3½ percent dismissed more than half 50 of their staff. In addition, 49 percent reduced their working hours and remuneration of their teams.

Almost four out of five (79 percent) of the companies have 100 percent of their team working in a home office. Three-fifths (60 percent) indicated that there are positive and negative points in this format, which will impact the business in the post-crisis.

About the relationship with brands: Most respondents fully agree with the statement that brands that

encourage their customers to stay at home are responsible.  In addition:

—51 percent say that they will stop buying from brands which have not treated customers/employees during the crisis.

—42 percent read the comments of other customers on social networks to understand their perceptions.

—34 percent consider that brands are being human in the face of difficulties presented by the pandemic; and

—35 percent feel that the brands are concerned with their customers.

—Despite the difficult times, 36 percent keep an eye on promotions and opportunities.

—In contrast, 28 percent considered it inappropriate to receive promotions and commercial actions

in this period.

—Solidarity is also important in this period: 22 were encouraged to contribute in some way with the accompanying brands and 21 percent effectively contributed.

About the intention to travel:

—International travel tends to remain affected after the resumption, since 60 percent say that they do not intend to return to international travel until there is confidence in pandemic control. This number drops to 45 percent when it comes to national travel.

—32 percent are unable to decide at this time about future trips.

—23 percent say they have full confidence in Tourism service providers to return to

travel as soon as the isolation is over; 28 percent say they have partial confidence; and only 7 percent

they say they have no confidence at all.

—22 percent don’t mind traveling for work when the isolation is over. 21 percent totally disagree with this statement; 16 percent know they will have to travel for work when the isolation is over, but they wouldn’t like it.

—Family travel does not seem to be one of the first actions that will be popular when the isolation is over.

About the travel budget:

—For most respondents, their travel budget was reduced in 2020. For 33 percent, it remains the same and for 20 percent, it ceased to exist.

—For 45 percent, it was reduced.

—For 33 percent, remains the same.

—For 20 percent, it does not exist anymore.

— For 3 percent, it Increased.

Desired Destinations for Resumption

Destination	Percentage Desiring It
Northeast	27%
Other	16%
Regional Beaches	14%
Serra Gaúcha	11%
Rio de Janeiro	9%
Europe	8%
Another part of the United States	5%
South America	4%
Florida	3%
Caribbean and / or Mexico	2%

More on How the Trade Reacted:

—At first, the vast majority (77 percent) of companies were first dedicated to managing cancellations and markings.

—Then, it was time to take care of the health of the team and organize the new working conditions (35 percent),

—Followed by cost and cash flow analysis for the next months (34 percent).

It was time for the following:

—Manage cancellations and bookings, 77 percent.

—Caring for the health of the team, organizing home office, vacation and layoffs, 35 percent.

—Analyze costs, cash flow and take actions for the next months, 34 percent

—Repatriate passengers, 21 percent

—Trying to follow operations normally 12 percent.

Layoffs:

—The vast majority of respondent companies had not yet made any layoffs.

—Only 3.48 percent dismissed more than 50 percent of the staff. In addition, 49 percent reduced the

working hours and the remuneration of their teams.

About home offices:

—79 percent of the companies have 100 percent of the team working in home office.

—60 percent say that there are positive and negative points in this format, which will impact the business in the post-crisis.

“It is a delicate and difficult time for everyone, and tourism has been hit hard.  Now is the time to act, guarantee the sustainability of the business, the jobs of the employees and, above all, the health of all of us. TRVL LAB was born at a time of enormous challenges for the industry and we hope to help each of you with this information,” explained PANROTAS CEO, José Guilherme Alcorta.

Click here for the complete PANROTAS article on the survey.

Brazilian travel trade giant PANROTAS has released its annual Forum magazine, a more-or-less directory of the top businesses in the country’s travel and tourism industry. The 128-page publication, available here, is usually released at the annual FÓRUM PANROTAS, a must-attend event for key figures in the industry, usually held just as Spring begins. However, concern over the impact of the coronavirus prompted the publication to move the forum, which had been scheduled to take place March 17-18, has been re-schedule and will take place September 9-10 in São Paulo.

The top players in the Brazilian travel and tourism industry are called travel distributors—not tour operators or travel agents—because many companies are both travel agent and tour operator, and some also have a stake in other sectors of the industry. For instance, the largest travel company in the country, CVC, comprises RexturAdvance, an airline consolidator; Grupo Trend, which is based primarily in Orlando, where it conducts receptive tour business; Submarino Viagens, a pioneer in online sales of airline tickets, hotels, packaged travel and cruises in Brazil; Experimento, an education-focused operator; and Visual Turismo, a travel agent-only operation.

The magazine also features lists of top performers in various sectors in the travel and tourism industry, as well as a special report on the history of women in the tourism industry in Brazil. 

The Top Travel & Tourism Distributors in Brazil*  

1. CVC

2. Decolar

3. Flytour Group

4. AJMOBI (AJ Mobilidade Corporativa – Alatur JTB)

5. Confiança Group

6. Kontik

7. viajanet

8. Arbaitman Group

9. Ancoradouro Group

10. Copastur

11. Skyteam

12. Belivtur

13. Hurb

14. Voetur Group

15. BCD Travel

16. BRT Group

17. Avidam

18. Teresa Perez Tours

19. Highlight Consolidator

20. Sakura Consolidator

21. Orintor Tour & Travel

22. Agaxtur Viagens

23. Queensberry Viagens

24. BTM Corporate

25. Tyller

26. Primetour Viagens & Experiencias

27. Master Turismo

28. Costa Brava Viagens & Eventos

29. Casablanca Turismo

30. Schultz

31. Promotional Travel

32. Rio Travel

33. LTN Brasil

* The criteria used in ranking the companies are discussed in the full report, available here.

Following a year in which there were episodic starts and stalls for the travel and tourism industry performance in Brazil, the latest monthly Overview report from the trade publication PANROTAS and the business journal Fecomercio was decidedly upbeat as it analyzed the latest economic numbers and other data.

After struggling through its worst economic recession in a century from 2014 to 2016, the nation’s economy appeared ready to stabilize until there was a sudden contraction early last year. Full-year data for 2019 are not yet available, but it appears that the country escaped another recession. As the January Overview indicated, “in the domestic environment, the country is showing signs of being increasingly on track.” Other notes from the Overview included the following:

—Christmas sales were at record levels and surpassed those of the pre-crisis period, between 2012 and 2014.

—Almost 100,000 jobs opened up in November, the best result for the month since 2010—and according to another survey by IBGE, the number of unemployed fell to 11.9 million (compared to a total of 12.2 million in the quarter ended in November 2018).

—In addition, inflation in Brazil is under control, maintaining the purchasing power of the population.  the end of 2019, the official price index had a rise of 4.31%, slightly above the target set (4.25%).

—With more jobs, more income and more confidence there is less default risks and the supply of credit goes up. In November, consumers contracted R$ 190 billion in credit in the financial system, an increase of 8.9 percent over the same period in 2018. (This number is important, since many Brazilians borrow money, in effect, to pay for their vacations.)

—In general terms, the economy grew by close to 2.5 percent by the end of 2019.

—The two major measures of consumer confidence both showed increases at year’s end.

A Good Year for the Travel and Tourism Industry? The Overview put it this way: “Great expectations for the year are turned to acquisitions of major players, such as Despegar and CVC Corp., for the future of Latam Travel franchises (the company will no longer have physical stores and recommended they be transferred to Agaxtur).“

However, the national aviation industry now has only three major players (Gol, leading the domestic market, Latam, leading the international market, and Azul, leader in destinations operated in Brazil) with the shutdown last May of Avianca Brazil. There ae also high expectations regarding the resumption of Boeing’s MAX aircraft, which halted Gol’s international plans. January started with Azul, Gol and Latam announcing more domestic flights in their networks (Latam had a 20 percent growth), but also some specific additions to their international network. Azul will fly from Campinas to New York and Recife to Buenos Aires and Gol from Porto Alegre to Punta del Este, Uruguay. (Industry analysis have cited high ticket prices for long-haul travel as a challenge for those marketing and selling Visit USA product.)

More Travel for Brazilians? Also, on the brighter side, the Overview noted: “According to Capital Research analysis, Brazilians shall travel more in 2020. Besides the six holidays that will fall on Mondays or Fridays, such as Carnival, Corpus Christi and Black Consciousness Day, it is expected that Brazilian have some money in the pocket to travel due to signs of economic recovery.”