Travel

Latin Americans are changing the way they travel

Why is this a game changer for tourism

Tourism is definitely on the priority list of many Latin Americans. In recent years, growth of the middle class, popularity of the internet and the impressive evolution of the mobile have boosted the industry throughout Latin America.

For example, in 2017, Mexicans made 22 million international trips, of which 18 million were to the United States of America (USA). Tourists who opted for Latin America visited Colombia and Argentina more.

In Brazil, numbers are also significant and signify an economic recovery after a period of recession. In 2018, the number of international flights increased by 14% over the previous year. This data is according to the National Civil Aviation Agency (ANAC), which is responsible for regulating this sector in Brazil.

However, in this regard, LABS highlights a characteristic of tourists which usually stays in the background when it comes to investing in the Latin market. Namely, the search for tourism services based on experiences and entertainment.

Local payment methods make booking hospitality services more accessible. Airbnb is a prime example of this transformation. However, not all travel items fit the payment culture of Latin countries.

See how facilitating the purchase of entertainment tickets and experiences is an opportunity to be explored by companies who wish to invest in Latin American tourists.

Beyond passage and lodging

Travel goes far beyond boarding an airplane, arriving at an unfamiliar location and checking-in at a hotel. More than ever, the experience and entertainment are at the center of the itineraries of the most varied tourist profiles. It’s no different with Latin Americans.

Amanda Carvalho, a 28-year-old Brazilian, is an example of this new kind of tourist behavior. When she decided to visit Rio de Janeiro again, she opted for an alternative itinerary. With the help of a local historian, she walked through the historic center’s streets and learned a little about the city’s black populations’ history.

The tour was through Gamboa, in the Port Zone of Rio de Janeiro. Although it contains large tourist attractions such as the Museum of Tomorrow, the locale has a little-known place in history. In the 19th century, this region was the largest port of landing of slaves during the slavery era.

I knew that this region had a history, but I didn’t know what it was. I thought it would be interesting to visit Rio de Janeiro in a different way. I went with my boyfriend, who is North American, and I wanted his first impression of Rio de Janeiro to be that one, and not necessarily of Copacabana and Ipanema (famous local beaches). So much so, that the first tourist attraction experienced was that of getting to know the black history of the city, and then visiting the most traditional points”, she says.

In explaining why she chose this type of entertainment amidst so many more conventional services, Amanda emphasizes authenticity and cultural content of programming. “I looked for a locale without a commercial transaction feeling. In that experience, I did not feel it. To such an extent that I met the tour guide at night in a bohemian area of Rio and met her friends. I looked for this feeling of being a part of the place for a day”, she points out.

Amanda’s experience illustrates an opportunity for tourism players who wish to take advantage of the potential of Latin American tourists. In addition to facilitating access to more conventional attractions, attending to the demand for personalized, unique experiences would be a good bet.

A survey conducted by Booking.com in 2019 indicated that 68% of Brazilian tourists consider doing cultural exchanges. US Experiential Travel Trends interviewed more than 2,300 travelers and found that 65% of them prioritize trips that provide a new kind of experience.

These numbers indicate a new behavior of the Latin American tourist and, therefore, reveal opportunities and challenges.

Also read: Top Profiles of Latin American Visitors

And traditional itineraries?

You may be thinking “So, Latin American tourists have simply abandoned the more traditional itineraries“? Absolutely not. This cultural transformation does not represent an impediment to the growth of tourism players who are focused on conventional itineraries. Most travelers in the area continue to prioritize classic destinations and schedules that are constantly under the spotlight – Disney, for example.

Miami is a destination known for its diversity of tourist attractions. Brazilians, Colombians and Argentinians represent 20% of all international visitors to the city. Recent research confirms that Latin Americans are replacing products with experiences.

Euromonitor, a leading tourism research firm, identified that tourists’ preference for experiences over material possessions boomed after the Great Recession of 2008 and 2009. Since then, surveys confirm that travelers prefer to return home having experienced unique and authentic experiences, and not necessarily with their bags crammed with goods.

In the Global Consumer Survey, 2017, the company identified that 70% of Latin American consumers are seeking a simpler and more practical life. In parallel, it is estimated that consumer spending on experiences will increase from USD 5.8 trillion to USD 8.0 trillion by 2030 (mainly in tourism, recreation and leisure services).

The question is that the growth of experiential tourism is a fact, and it’s up to the players to understand the best way to take advantage of this scenario.

The point here is that the new profile of Latin American tourism consumers is directly related to the purchasing culture of each country. In Brazil, for example, the preference for installment payments needs to be taken into consideration by companies that opt to invest in the Brazilian market.

Therefore, it is not that travelers from Latin America are uninterested in traditional tourist itineraries – quite the opposite. The question is that they are not always accessible for Latin American tourists.

Therefore, facilitating their access to entertainment tickets and experiences of all kinds is undoubtedly a promising strategy.

Local payment methods

Each country has its own culture and, consequently, a way to consume. Brazilians, for example, love to pay for purchases in installments. The possibility of installment payments is one of the central points in the decision of the consumer on the acquisition of a product or service. In addition, payment in installments enables travel expenses even in times of economic stagnation or even crisis.

Since not only air tickets and lodging depend on tourists, offering local payment methods for experiences and entertainment options tends to increase the interest of Latin Americans in these services.

Like large companies such as Airbnb and Booking.com, a great opportunity for players in this industry is to offer local payment methods which are aligned with the consumer profile of each country and, therefore, becoming more accessible and attractive.

The chart above confirms this trend. It represents transactions made by Brazilians via an e-commerce specialized in booking tourist attractions in Europe and the United States. The preference for installment payments is even clearer in the columns referring to the quarters of 2018 and 2019, in which six installments are significant.

In the last quarter of 2018, 38% of Brazilians who bought tickets of experience or entertainment divided the value into 6 installments, and 29% opted to pay in 10 installments.

Data indicates that offering local payment methods is an effective way to attract Brazilian tourists, since they can plan their spending on entertainment in advance.

If, on one hand, technology and the mobile age have diminished distances, they have also revealed other forms of tourism and changed the profile of travelers. The lack of payment options still makes it difficult for millions of Latin Americans to access the most varied forms of entertainment and experiences.

Aligning these two perspectives is the first step to explore the potential of a market full of opportunities.