Brazil - Travel & Tourism: Inbound tourism to drive the industry (Strategy, Performance and Risk Analysis)
Brazil is rich in natural heritage and vast biodiversity. However, the country’s tourist potential is affected by weaknesses in societal safety, infrastructure, and labor, among other factors. Though fluctuations in its local currency negatively affected outbound tourism, it led to growth in inbound tourism, which contributes significantly to the total travel and tourism of the country.
The country’s inbound tourism expenditure increased at a CAGR of 1.8%, from US$6,858.4 million in 2012 to US$7,357.8 million in 2016, and is expected to rise at a CAGR of 2.2%, from US$8,132.4 million in 2017 to US$8,886.6 million in 2021. Growth in tourist numbers was driven by the 2016 Rio Olympics, along with the depreciation of the local currency (Brazilian Real).
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Growing investments in the hotel industry to drive hotel revenue over the forecast period (2017-2021)
The total revenue from hotels declined at a CAGR of -11.8% over 2012-2016, from US$18.6 billion in 2012 to US$11.2 billion in 2016. The decline is attributed to the depreciation of the Brazilian Real, which affected the hotel industry’s profit margins. However, it is forecast to increase at a CAGR of 2.1%, from US$12.1 billion in 2017 to US$13.1 billion in 2021 due to increase investments in the industry.
Increasing demand to foster revenue growth
Full service airlines accounted for the majority of revenue and will be the main revenue generator during the forecast period. Though revenue in this segment declined at a CAGR of -8.2% over the review period, from US$8,611.8 million in 2012 to US$6,125.2 million in 2016, it is forecast to increase at a CAGR of 6.2%, from US$6,858.5 million in 2017 to US$8,716.7 million in 2021.
The car rental fleet size is expected to witness strong growth
The overall car rental fleet size increased at a CAGR of 5.1%, from 198,875 in 2012 to 242,246 in 2016, and is forecast to increase at a CAGR of 2.9%, from 250,612 in 2017 to 281,380 in 2021. This is mainly due to international sports events such as the 2014 FIFA World Cup and 2016 Olympic Games, which increased the volumes of both leisure and business tourists.
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