ITB Berlin

International tourist arrivals fell in similar proportions in the Americas and in Europe in 2009, but in 2010 they rose twice as fast in the Americas. They were up about 8% to 151 million, about 2% more than their peak in 2008. And beware those figures that suggest that the recovery slackened in the last quarter of the year: they are due entirely to stronger base figures in the last quarter of 2009.

As always, one has to look first at the USA, which receives about 40% of total arrivals in the Americas. At times during 2010 it seemed that the USA was one of the laggards in the economic recovery, but the economic indicators improved as the year progressed. At the same time, the US dollar continued to weaken, particularly against the currencies of commodities' producers like Australia, Brazil, Canada, Chile, New Zealand, Russia and South Africa, and against Asian currencies like those of Japan, South Korea, Taiwan, Indonesia, Malaysia, the Philippines, Singapore and Thailand. This combination had a strong effect on the direction of tourism flows. Americans travelled more extensively at home, but not abroad. Foreigners – especially from countries blessed both with prosperity and a strong currency – flocked to the USA. So arrivals in the first ten months of the year were up 11%.

Canada, on the other hand, combined a less equivocal prosperity with a strong currency. A very successful and much praised marketing campaign, 'Locals Know', helped to sustain demand for domestic travel, but did not prevent a large increase in outbound travel. Inbound travel was up only 2% – and this in spite of vigorous growth from Japan, China (Canada has at last signed an ADS agreement with China), Brazil and other South American markets. But not from Mexico: new visa requirements introduced in 2009 continue to restrain arrivals from Mexico.

Variable winds in Mexico and Central America …

On paper, arrivals in Mexico and Central America were strong in 2010, but much of that was a recovery after the H1N1(A) influenza pandemic in 2009. Some observers also believe that most of the increases in numbers are cross-border business and VFR visitors rather than 'paying' leisure tourists. There were new problems: Mexicana Airlines collapsed in June 2010 and ceased flying for a while. Other airlines stepped in where they could, but gaps in services remained. And old problems persist: the activities of drugs merchants and other criminals continue to cause mayhem in some areas, and real damage to the reputation of the whole region.

Political problems, too, caused real problems for the organisation of tourism in a few areas, and general damage to the reputations of the region as a whole. There are pessimists in the region, worried about these problems and the hesitancy of the recovery in US demand, and optimists, who point to the continuing investments in tourism in Mexico and the under-exploited potential in Central America.

… and lighter breezes in the Caribbean

Overall, arrivals in the Caribbean seem to have grown moderately than those in Mexico and Central America. The islands depend heavily on the US and European markets, both of which are slack. But, as usual in a region with so many small destinations with their own specialisations and unequal shares of good and bad luck, some did better than others. Among the more successful were Jamaica, Anguilla, Dominica, Martinique, St Lucia and the British Virgin Islands. The Bahamas ran a successful 'Companions Fly Free' campaign for much of the year, but business / convention travel remained weak. Cuba, whose arrivals had continued to grow in 2008-09, benefited from a relaxation in the rules of travel by both the American and Cuban authorities. It also attracted more visitors from Argentina, Brazil, Mexico, Peru, Venezuela, Russia and China. But arrivals in Curaçao, Grenada, Montserrat, St Kitts und Nevis, St Vincent and Trinidad and Tobago declined.

The boom in cruise holidays continued. The Caribbean Tourism Organization says cruise visits in the region rose 6% in 2010. Highlights included increases of 50% in Martinique, 18% in the Bahamas and the US Virgin Islands and 12% in Bermuda. Investments in facilities for cruise ships continue in both the Caribbean and Central America. Nassau harbour has been deepened to allow visits from the largest ships and Jamaica opened a new pier in Falmouth Trelawny. But cruise visitors tend to spend little ashore and some destinations in Central America and the Caribbean have been attempting to impose, or raise, passenger landing fees.

Trade winds set fair for South America

However, South America put in the strongest performance in 2010. Only Venezuela did not share in the sub-continent's success. The regional prosperity is allowing larger numbers of people to travel than ever before. Again, exchange rates are setting the patterns for the directions of travel. Most currencies in the region are very strong against the US dollar and European currencies. The prosperity is driving large increases in domestic and cross-border travel (by air, land and sea), and the strong exchange rates are facilitating long-haul outbound travel. But those same exchange rates (coupled with higher air fares) are restricting long-haul inbound travel.

Thus a great many destinations around the world are reporting large increases in arrivals from Brazil, but international arrivals in Brazil are stagnating. There is huge enthusiasm among the growing middle classes (including many on very modest incomes) for holiday travel within Brazil, and the industry is preoccupied with catering for this demand. Tackling the complexities of international markets is, for many in the industry, not worth the effort. This is an attitude that will have to change as the 2012 Olympics and 2014 FIFA World Cup draw nearer. The government has set a target of doubling international arrivals within ten years.

The business hotels, especially in São Paulo, are also thriving without having to distinguish much between their domestic and international custom.

Tourism in the River Plate area prospers …

There is a cluster of high-growth tourism industries around the River Plate, consisting of northern Argentina, Uruguay, Paraguay and the southern states of Brazil (Paraná, Santa Catarina and Rio Grande do Sul), and catering very much for one another. Yet again, exchange rates matter enormously. The strength of the Brazilian real means that the southern states cannot attract larger numbers of Argentines and Uruguayans, and they continue to focus on the Brazilian market. The Uruguayans report large increases in arrivals from Brazil and (now that the bridges across the Rio Uruguay can be relied on to be open) Argentina, and that there is great interest in holiday homes in their resorts. The Argentine peso, meanwhile, is weak, and Buenos Aires reports a huge increase in visitors from Brazil and more moderate (but still large) increases from Uruguay and Chile. A small part of the increase from Brazil represents a recovery from the H1N1(A) crisis in 2009.

… while that in the Andean area struggles

There is a second, but more problematic, cluster consisting of Colombia, Venezuela, Ecuador, Peru and Bolivia. The regional prosperity is generating a great deal of local travel demand, but political differences impose restrictions, including sometimes visa and extra documentation requirements. Venezuela has taken its idiosyncratic policies to such extremes that both inbound and outbound travel are declining year after year. (Multiple exchange rates make both almost prohibitively expensive.)

To attract leisure visitors from Europe and North America, Ecuador depends heavily on the Galapagos Islands and Peru on Macchu Picchu. Both are now overloaded, and the tourism authorities are urgently promoting alternative 'routes' and attractions, of which they are both blessed with an abundant supply. Colombia and Venezuela, however, lack similar attractions with high international profiles.

This cluster had more than its fair share of natural disasters in 2010. 'El Niño' caused heavy rainfall and mudslides in Ecuador and Peru earlier in the year, closing Macchu Picchu for a while, and when 'La Niña' followed at the end of the year it caused similar disruptions to the resorts (mostly used by domestic holidaymakers) on the Caribbean coasts of Colombia and Venezuela.

Chile is an outlier to both clusters with a notably successful tourism offer centred on its natural landscapes. It has been a popular destination for Brazilians, Argentines and Uruguayans, but a high exchange rate and ultra-long-haul flights did some damage to arrivals from Europe and North America during the economic downturn. The earthquake and tsunami then did serious damage to its economy and tourism in February 2010, from which it is still recovering.