Domestic tourism to return to pre-pandemic level by the end of the year – Prime Time Zone

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Advances in vaccination and repressed demand generate expectations of normalization in the sector during the vacation period; international travel is only expected for 2022

Ricardo Moraes/ReutersTrips within the country itself drive the recovery of the tourism sector after the shock generated by the health crisis

The advance of vaccination against Covid-19 in the second half and the repressed demand for travel raise the projections for the resumption of the tourism sector, one of the most affected by restrictions on the movement of people. The constant revisions of the state schedules for the application of the first dose lead entrepreneurs to project the resumption of part of the operations at the pre-pandemic level by the end of 2021. The recovery process should extend over the next year and end in 2023, with the complete return of activities to the level of 2019. Data from CVC, one of the largest tour operators in the country, show that the sector’s recovery is driven by the domestic segment. Travel bookings to destinations within the country are constantly growing, and in the first quarter of this year reached 63.3% of the same period in 2020. The rising curve in vaccination and the summer vacation season should boost the category to recovery in the coming months. “Surely, the world will be practically normal when we look at domestic tourism,” says the company’s CEO, Leonel Andrade. “The great driver of this, without a doubt, is vaccination. Therefore, 100% of our energy must be focused for immunization to go quickly and successfully.”

The resumption of the domestic sector as the first sign of normalization of tourism has already been seen in other regions of the world where immunization against the new coronavirus is more advanced. With the privileged perspective of those who maintain operations in 110 countries, the Accor hotel conglomerate projects that the pace of recovery in Brazil will be similar to that followed in Europe, where internal travel was the first to experience a return to the “old normal”. With more than 5,000 units around the world — 323 in Brazil — and the owner of 44 hotel brands, including the Ibis, Mercure, Pullman and Fairmont chains, the group’s projections also point to the normalization of activities throughout of the coming months. “As of September, we should see signs of activities in Brazil comparable to those in Europe,” says Accor CEO for South America, Thomas Dubaere. The expectation is that the immunization of the adult population projected for the second semester will gradually lead to pre-pandemic levels starting in 2022. “We are seeing the light at the end of the tunnel, but we are aware that Brazil is a huge country, so let’s go take a little longer [para a imunização] than in smaller countries in Europe,” he says.

The recovery of tourism by local travel can be explained by a number of factors, from people’s lack of confidence in staying away from home at a time when the pandemic is still at high levels to the financial issue. The imposition of barriers on Brazilians by several countries also pushes part of this eager demand for travel to local destinations. The opening of the borders, estimated only for next year, will be the last step towards the complete resumption of the segment. “Compared to 2019, we are still far behind, but we are already much better than in 2020, the height of the unknown”, says the CEO of CVC. Based on global data, Dubaere points to the resumption of the pace of growth in tourists at the rate of 4.4% per year, an index observed until 2019. “Meanwhile, the supply chain was growing 2.3% per year. The numbers show that we are going back to what we had before, but unfortunately we lost a year and a half.”

Leisure tourism is the main bet for this moment of recovery. After more than a year of pandemic and lack of perspective, the hope with the traction in vaccination should give body to the repressed demand. This package segment has always been the sales leader at CVC, with almost 80% of the market. The forecast is that the number will remain in this growth movement. “The upper classes are finally getting to know Brazil, and the country has a good structure for that,” says Andrade. The sentiment is shared by Accor’s CEO, who defines the moment as a discovery of his own country. “It’s clear that people want to go out, travel again and meet family and friends. We see that the big trips, from one continent to another, will take place in a second stage”, says Dubaere. Projecting the opening of another 25 hotels in South America this year, and 98 by 2025 — 70% of them in Brazil —, Accor sees the region as a source of opportunities for the post-pandemic market. “Leisure trips will grow, and a place like Brazil, with nature, mountains, beaches, offers everything this segment needs”, he says.