By reading this post you will:
- Gain an overview of the tourism sector in Brazil
- Discover how the tourism chain is structured in Brazil
- Get to know important facts of the 3 different types of tourism in Brazil
- (inbound, outbound and domestic tourism).
- Understand what important factors influence the Brazilians when travelling
- Get a clear picture of the tourism sector on the web
#1. General Overview of the Sector for the Danish Professional Community
Brazil has always been an attractive country for foreigners looking for an exotic destination. According to some researches, Brazil is perceived by its tourists as a friendly, sexy, warm, colorful and not least – a place full of diversity.
The drawbacks on the other hand, are the violence, the huge distances, and relatively high prices in Brazil, that, when compared to other destinations such as Asian or European countries such as Italy, Portugal, or Greece, are the factors that makes foreigners step back.
Two major international events are approaching -the World Cup in 2014 and the Olympics in 2016. Therefore the Brazilian federal government has been working closely with Embratur (the Brazilian branch responsible for all activities related to tourism activities in Brazil).
Together they have been working hard to improve the “Brazilian brand” abroad.
These are some of the facts that have been taken which have helped Brazil to create more awareness and improve its brand abroad:
- The pacification of the favelas (slum areas) in Rio,
- The consolidation of São Paulo as a major financial hub in Latin America,
Embratur has registered 5,8 million international arrivals in 2012, and for 2013 there are forecasted nearly 7 million tourists coming to Brazil.
The Brazilian outbound tourism has also increased in 2013.
One of the main reasons for this growth I´ve already posted in the New Brazilian Middle Class post, where I explain the emergence of the so called ” New Middle Class”, their impact on consumption and on the Brazilian economy.
According to a report done by UNWTO, Brazil is rated the 5th country most visited in the Americas, only behind, USA,Canada,Mexico and Argentina. Moreover, in 2012, Brazil was rated one of the countries with the best performance when receiving tourists, when compared to other countries in the Americas.
#2. The Tourism Chain in Brazil – What Danish Professionals should know about it?
The tourism service in Brazil is still considered a sector with a rather high level of informality. Since 2008 tourism service providers are obliged to be registered in Cadastur, which is a public registration system of tourism service providers.
Until September 2013, 45.000 service providers were registered within the tourism sector in Brazil, from several sectors and of different sizes.
The World Travel & Tourism Council recorded a total of 2,74 million jobs created by the tourism sector in Brazil in 2011. In 2012 there was a 7,7% growth, and the tourism sector in Brazil generated 2,95 million direct jobs. WTTC estimates that until 2022 there will be roughly 3,63 million jobs generated by the tourism sector in Brazil.
According to IPEA, the Brazilian institute for Applied Economics and Statistics, the jobs in the tourism sector are divided as follows:
- Transportation – 40%
- Food and Restaurant – 33%
- Lodging – 13%
- Transportation support – 5%
- Tourism companies – 5%
The Tourism Value Chain in Brazil includes a very wide number of players. There are: suppliers of touristic products, Tour operators and travel agencies, other tourism companies, corporate and end customers, exchange brokerage companies, banks, credit card operators, insurance companies. They all that create a strong link as it follows on the diagram.
According to a study done by Embratur the Southeast region of Brazil has 48% of registered tourism companies, followed by the South accounting for 22%. The Northeast accounts for 16%, followed by the Central West region accounting for 9% and North, accounting for 5%. This distribution reflects somewhat the weight of each region as a main touristic market in Brazil.
3#. A closer look at the main players:
Cruise Ships Industry
According to Abremar, the Brazilian Cruise Ships Association, the number of cruise ships travelers has grown considerably within the last decade. In 2011, ABREMAR recorded a record of 793 thousand tourists using cruise ships, of which 12,5% were foreign tourists.
Also Abremar points out that during the season of 2010/2011, 62,7% of cruise ships passengers were doing their first trip on a ship, whereas only 37,3% had already travelled in a cruise ship previously. The most sought destinations are: Northeast coast of Brazil (29,2%) followed by international cruise ship trips (28%), Caribbean (17%) and Buenos Aires (13,4%)
The cruise ships industry in Brazil is concentrated in 6 companies, where MSC Cruzeiros is the leader, with 5 ships and 12,2 thousand rooms available. Below you can see a chart with the main cruise ships operators in Brazil, by number of ships (Navios), number of rooms (Leitos) available and market share (Mercado).
As of financial impact, the cruise ship industry generated a total revenue of R$ 1,3 Billion with R$ 791,6 million spent on supplies, port costs and fuels and R$ 522,5 million generated by the passengers at the harbors of embarkation or destination.
Revenues of all companies altogether in 2010 were in the order of US$ 534 million, registering an increase of 56% compared to 2009. Approximately 90% of this value correspond to the sales of package-solutions and 10% to the on board passenger consumption.
The Travel Agencies Market in Brazil
Untill 2010, according to MTUR, there were roughly 11.000 travel agencies in Brazil. The main sectors that are driving the growth of the tourism in Brazil are:
- Corporate Market and Events
- The New middle Class and higher power of consumption
- Brazilian currency evaluation, which contributed for the increase of sales in international trips.
Additionally, other influences contributed and are still contributing for a positive impact on the sector:
- Broader service offer at competitive prices and facilities to pay
- Capture of new clients
- A widening of the production capacity from the travel agencies side
- Online platforms
Currently the largest travel agency of Latin America is CVC TURISMO, which accounts for more than 678 shops and more than 5.000 independent representatives. I.O.W CVC leads the segment of travel agencies in Brazil. Their main competitor has 102 shops. Below you can see a map done by CVC Turismo, showing their presence in Brazil, in comparison to their competitors. This info is from 2011. As of today,this picture hasn´t changed much.
Corporate Travel Agencies in Brazil
According to Global Business Travel Association and their report on Brazil, the Brazilian total expenditure with corporate travels will be in the order of US$ 34,5 Billion. The study points out that Brazil currently occupies the 8th place in the world ranking of corporate travels and within the next 2 years Brazil will overcome Italy, France and the UK.
In the first semester of 2013 the Brazilian corporate travel agencies in Brazil registered a total revenue of R$ 6,1Billion. A growth of 13% in comparison to the same period of 2012.
The main travel destinations in Brazil remain focused on the states of São Paulo, Rio de Janeiro and Minas Gerais ( Belo Horizonte is the Capital)
Educational and Exchange Program Agencies
The number of Brazilians going abroad to study has grown at an average rate of 26% per year. According to Belta in 2011 there were more than 200 thousand Brazilian students abroad.
Valor Economico (a Brazilian business paper) claims that from 2010 till 2011 these agencies saw an increase of more than 40 % in their revenues.
Adventure and Ecotourism agencies
There are roughly 2.067 adventure and eco-tourism agencies in Brazil. This is a segment of high potential in Brazil, not only given the huge international events the country will hold within the next years, but also given a general increase of foreigners visiting Brazil.
Different from other tourism agencies, the operators do not have contact with the end customers, but rather, with tourism agencies or suppliers of touristic products.
However there are some operators in Brazil that develop their own retail channels either selling in their own physical shops, or online.
According to Braztoa, the Brazilian Association of Tourism Operators it is estimated that its 86 members are responsible for 85% of all touristic packages sold throughout the Brazilian territory. Additionally they were also responsible for transporting 4,8 million passengers and being responsible for total revenues estimated in R$ 7,6 Billion
Events and Trade Fairs Agencies
The Event sector is traditionally informal, and it comprises mostly micro and small companies, according to the Brazilian association responsible for events (ABEOC).
ABEOC estimates that there are roughly 6 thousand companies responsible for the 320 thousand events and trade shows that happen every year in Brazil.
4#.Premises Danish Tourism professionals should know about the Brazilian Market
- There are 94,2 million internet users in Brazil.
- 47 % men and 53% women.
- 40% are between 20-34 years old.
- 55% are part of the A/B classes (high and upper middle class).
- 42% belongs to the class C – aka. “The New Middle Class”
- Brazilian GDP for 2013: 2% Growth – Total value of US$ 2,47 Tri.
- 25% of Brazilian income is compromised with debts. (Bank loans).
- Retail Total Value in 2011 was in the order of US$790 Bi, representing 16% of the Brazilian GDP
- Credit Card possession is divided as follows:
- 51% Class AB, 42% Class C and 7% Classes D and E
- Brazil is the country with most internet users in Latin America
5#. Tourism flows Danish Tourism Professionals MUST know about in Brazil
The Domestic Tourism in Brazil
The domestic tourism in Brazil has grown systematically, sustaining the demand in moments that the external economic environment wasn’t favorable. The Getulio Vargas Foundation and the Tourism Ministry made a study and projected a total of 243 million domestic trips that would happen from the period ranging from 2011 till 2014.
The Outbound Tourism in Brazil
As more Brazilians are enjoying the decent economic moment of Brazil, they are also experiencing income expansion. The income expansion has reached a great deal of Brazilian families and has therefore contributed to leverage the number of Brazilians travelling overseas.
The Destinations Brazilians travel mostly remains South America, USA and Europe. Argentina is the destination in South America most visited by Brazilians.
In 2010, according to a report done by Business Monitor International, each Brazilian tourist (travelling outside of Brazil) spent on average US$2.610, (totaling US$ 14,6 Billion) almost 3 times more than the average spent by a foreign tourist visiting Brazil.
Here’s an interesting fact:
Recently a television channel in Brazil uncovered how much money Brazilians actually are spending when travelling abroad – and it is quite amazing.
The reason why they spend so much money (especially when travelling to the USA) is that clothes, electronics, etc. is much cheaper there. So often the “good hearted” Brazilians bring lists of goods required by their family and friends when returning from a trip abroad.
Of course this phenomenon has created a fuss among the Brazilian authorities.
Here on Denmark Brazil, you can read more about the reasons why it is so expensive to buy in Brazil, on the “Uncovering the Brazil Cost” post.
The Inbound Tourism in Brazil
In 2012 Embratur registered 5,8 million tourists arriving on Brazilian soil. Roughly 70% of the foreign tourist came by air transport, 27% came by land transport, 3 % by sea transport and 1% by inland waterway transport.
According to Embratur and the Federal Police the main arrivals from 2008 till 2012 were the following:
6#. Tourism in Brazil, for Danish Marketers
As as marketer you should know where your audience is keen on spendng their money. With the Economic expansion, more people started to travel, but that doens´t mean that travelling represents the main intent of each class. Below, you will see an intent chart per class, done by IPSOS institute, when it comes to travelling.
Eletrônico = Electronics
Móveis = Furniture
Celular = Mobile phones
Computador = Computer
At the bottom you can see how much of the consumptions was destined to tourism activities
Internet Usage, Online Ticket Purchasing In Brazil and a few insights from Google Events
As already mentioned there are in Brazil today 94,2 million internet users, accounting for 48% of penetration. Brazil still lags behind USA, where internet usage is penetrated in almost 83% of the population.
From the total amount of internet users in Brazil, around 71% buy tickets online. (The result comes from a study done by Skyscanner Brazil in 2012).
9% of searches are made via smartphone. By 2015, Google estimates that roughly 20% of all tourism searches will be made via smartphones
9 out of 14 times, Brazilians people interact with a tourism website, during the decision making process of buying a trip and aggregated services.
Here is some interesting data gathered by Google Brazil regarding the Tourism searches in Brazil:
- 47% superior than all searches for films/movies.
- 54% superior than all searches for beauty products
- 92% superior than all searches for football
- 469% superior than all searches for politics
- 924% superior than all searches for weather forecasts
- 2565% superior than all searches for alcoholic beverages
You want to know more? Watch the full presentation here: http://thinkbrazil.withgoogle.com/travel/ao-vivo/
Did I miss out on something, Please let me know.