Mastercard Economics Institute presents report on the tourism market in Latin America and the Caribbean

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The report reveals that there has been a great recovery in national air transport in several markets, but the pandemic led the sector to levels of spending that had not been seen in more than 15 years

After flights were largely suspended due to the pandemic, leaving travelers homebound in 2020, the return of air travel has become one of the most anticipated and uncertain activities of 2021.  Mastercard  has released its report Recovery Insights: Ready for Takeoff ?, a global look at key trends in air and ground travel. Although the global travel recovery remains uneven in pace, one-fifth of the countries surveyed have returned to at least 90% of pre-pandemic levels in domestic flight bookings.

The report, produced by the  Mastercard  Economics  Institute , draws on anonymous, aggregated sales activity from across the Mastercard global network   to better understand the next phase of travel, its drivers, and its challenges. This includes the balance between business and leisure, local and long-distance travel, and also between savings and spending. In addition, the report looks at the spending categories that are experiencing a rebound and what this indicates in terms of travel recovery.

“Although there has been an impressive recovery in domestic air transport in several markets, the rebound will not happen overnight. The pandemic led the sector to spending levels that had not been seen in more than 15 years, ”said  Bricklin  Dwyer , Mastercard’s chief economist   and director of the  Mastercard  Economics  Institute . “Although there remains a lot of uncertainty, accumulated savings, the desire to venture far from home and the green light from governments could produce favorable and significant winds for the continued recovery of travel.”

The main trends are:

· Consumers continue to choose road trip options as gas costs rise. Local road trips are becoming a big trend in 2021 as more and more people travel their country to enjoy smaller places near beaches and mountains. Among the countries that are experiencing an increase in gasoline spending are Argentina (+ 28%), Brazil (+ 31%) and the Dominican Republic (+ 39%), compared to January 2019.

· In  LAC , the demand for air travel is being led by consumers in Colombia, Mexico and the Dominican Republic. Pre-pandemic booking levels have been exceeded by travelers from the Dominican Republic (+ 29% of air spending); Mexico (+ 35%) is experiencing a similar situation led by spring break travelers, and Colombia is also experiencing a significant rebound (+ 12%).

· Global business travel shows slight signs of recovery.

In  LAC , business travel reservations have been making at a slower rate than those for leisure travel. Compared to the fourth quarter of 2019, corporate travel was represented in Mexico (-10%), the Dominican Republic (+ 2%), Colombia (-7%), Brazil (-57%) and Argentina (-63 %). It is interesting to note that travel by small and medium-sized companies ( SMEs ) has recovered more quickly than in large companies. These figures are significant, considering that  SMEs  tend to spend less on flights, hotels and restaurants than large companies.

· Travel routes to observe with the  reopening  of borders. The   limited reopening of borders has proven to be a challenge for travelers and the tourism sector, but some open corridors, such as the Dominican Republic to the United States and Mexico to the United States, are reaching and, in some cases, exceeding pre-pandemic levels.

“The past year has only reinforced how important travel is to connecting with friends, family and the world at large, as well as for our business communities and personal fulfillment,” said  Raj  Seshadri , President of Mastercard Data and Services  . “The economic implications of tourism are enormous, as virtually no sector remains intact when travelers stay home. Through our Recovery Insights report  We have helped airlines redesign travel routes, retailers realign inventory, and cities experience shifts in spending around them. It is about facilitating smarter decisions to obtain better results today and tomorrow ”.

Mastercard  launched  Recovery  Insights  to help businesses and governments better manage the economic risks posed by COVID-19. Through this initiative,  Mastercard  has provided data-driven insights, analytics and other services to businesses and governments to help them understand changing consumer spending trends and how to address them.