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Brazil Tourism Report Q2 2012
Business Monitor International, March 2012, Pages: 65
Brazil Tourism Report provides industry professionals and strategists, corporate analysts, tourism associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Brazil's tourism industry.
BMI remains highly positive about the outlook for Brazil's tourism industry in 2012.
International disembarkations, which are released monthly by the Ministry of Tourism and serve as a proxy for tourist arrivals in the absence of this data being released by the ministry in a timely fashion, show an increase of 13.95% year-on-year (y-o-y) over 2011 to 9,005,165. There was notably strong growth in April of 35% yo-y to 703,652 international disembarkations. Domestic disembarkations were also on an upwards trajectory, rising by 15.81% y-o-y over 2011 to 79mn.
The disembarkation data from the Ministry of Tourism covers all arrivals, including business, leisure or people visiting family and friends. However, whatever the purpose of travel, the data show the overall trend in tourism is positive, which will benefit airlines and hotels operating within Brazil.
For 2011, preliminary indications from the Ministry of Tourism are that an estimated total of 5.54mn foreign tourists visited Brazil, which would be a new record for Brazilian tourism. In 2011, foreign tourists spent US$6.78bn in Brazil, an increase of 14.5% y-o-y, very much in line with BMI's forecast of US$6.72bn for the year. The strongest months for tourism receipts in 2011 were April (US$630mn), August (US$605mn) and December (US$650mn).
With Brazil hosting the football World Cup in 2014 and then the Olympic Games being in Rio de Janeiro in 2016, BMI believes tourist arrivals will continue to grow strongly in the years ahead. BMI forecasts 21.5% growth in tourist arrivals through to 2015, reaching over 6.73mn tourists. Over the same period, we also expect tourism receipts to increase by 25.6% to total over US$8.52bn.
LATAM Airlines Group Takes To The Skies
In December 2011, the merger between Brazilian airline TAM and Chile's LAN, which was first proposed in August 2010, was finalised after approval from Brazil's anti-trust authority (CADE) and the merger received the support of both airlines' shareholders.
The only conditions set out the Brazilian and Chilean anti-trust authorities were: a reduction in flights in and out of Lima, Peru; a reduction in the amount of Santiago-São Paulo flights operated by LATAM (LAN and TAM have over 80% market share); and asking LATAM to choose which international alliance to join. LAN is part of oneworld and TAM is part of the Star Alliance. There has been no indication as to which alliance LATAM will seek to join, according to local media reports. In January 2012, the airlines announced a revised estimate of the cost savings expected to be achieved through the merger. LAN and TAM now predict the synergies could increase annual operating income by US$600-700mn, which is a significant increase on the original estimate of US$400mn in synergies announced in August 2010.
Breaking down the headline figure, the companies said around 40% of total synergies will come from increased revenue from LATAM Airlines' passenger business, 20% from increased revenues from the cargo business and 40% from cost savings across both airlines.
BMI believes the merger of the two airlines, which will create the world's third-largest carrier, will be positive for the Latin American tourism industry as it should lower costs for passengers as a result of cost synergies and economies of scale.
Airport Privatisation Takes A Step Forward
Brazil is prioritising investment in airport infrastructure as it prepares to host the 2014 World Cup and then the 2016 Olympics. In recent years, Brazil's commercial airport administrator, Empresa Brasileira de Infraestrutura Aeroportuária (Infraero), has implemented a BRL3.8bn (US$2.44bn) programme to upgrade the country's airport infrastructure.
In February 2012, the government was scheduled to auction off airports in São Paulo, Campinas and Brasilia as part of plans to boost capacity and meet rising air travel demand. The bidding prices will reportedly start at US$1.84bn for Guarulhos, US$812mn for Campinas and US$315.2mn for Brasília. The winning bidders will take a 51% stake in each airport, with Infraero holding the remaining 49%.
Infraero will also maintain a right of veto on any future decisions taken by the airport joint venture partners. Mercopress reported in October 2011 that the winning bidder for São Paulo's Guarulhos Airport will be charged 10% of gross revenue over a 20-year operating contract. Bidders for Viracopos-Campinas Airport will have to bid at least BRL521mn and look to pay out 5% of gross revenue over a 30-year operating contract. Brasilia's concession will last for 25 years.
Among the interested parties reportedly bidding for these airports are a Spanish consortium of airport operator AENA and infrastructure developer OHL Concesiones, German airport operator Fraport and French company Aéroports de Paris. Indian company GMR Infrastructure said that it decided not to enter the bidding process but it might consider entering a second round of airport auctions scheduled for mid-2012. BMI will discuss the outcome of the airport auctions in the next quarterly report.
Brazil Tourism Industry SWOT
Brazil Political SWOT
Brazil Economic SWOT
Brazil Business Environment SWOT
Industry Forecast Scenario
Table: Arrivals, 2008-2015
Table: Tourist Expenditure And Economic Impact, 2008-2015
Table: Inbound Tourism, 2008-2015
Table: Outbound Tourism, 2008-2015
Market Overview – Travel
Global Oil Products Price Outlook
Market Overview – Hospitality
Business Environment Outlook
Table: Latin America Travel And Tourism Business Environment Ratings
BMI's Regional Security Ratings
Table: Latin America Security Ratings
Table: Latin America State Vulnerability To Terrorism Ratings
Brazil's Security Risk Ratings
Latin America Security Overview
Strategic Outlook For The 2010s
Latin America In A Global Context
Challenges And Threats To Security
Role Of Outside Powers
Key Factors To Consider In The 2010s
Table: Global Assumptions, 2010-2016
Table: Global And Regional Real GDP Growth, 2010-2013 (% change y-o-y)
Table: Developed Market Exchange Rates, 2011-2013
Table: Emerging Market Exchange Rates, 2010-2013
Table: Developed States Real GDP Growth, 2010-2013
Table: Emerging Markets Real GDP Growth. 2010-2013
Table: BMI And Bloomberg Consensus Real GDP Growth Forecasts, 2011 And 2012 (%)
Brazil Hospitality Group
Gol Transportes Aéreos
TAM Linhas Aéreas
How We Generate Our Industry Forecasts
Tourism Ratings – Methodology
Table: Tourism Business Environment Indicators
Table: Weighting of Components
- Brazil Hospitality Group
- Gol Transportes Aéreos
- TAM Linhas Aéreas
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