OBS Report: Evolution and challenges of the tourism sector in Latin America 2024
Tourism in Latin America: a social economic engine
- By the end of 2023, global tourism had recovered to almost 90% of its pre-pandemic levels. Latin America and the Caribbean are expected to achieve full recovery by 2024.
- In 2023, the region received 117 million international tourists, an increase of 12% compared to 2022, according to the World Tourism Organization (UNWTO).
Colombia, June 2024. Tourism is a key industry in the economy of Latin America, a region rich in cultural and natural diversity and historical heritage. With iconic destinations such as Machu Picchu, the beaches of Cancun and the Amazon, among many others, the region has attracted millions of international tourists, contributing significantly to the economic and social development of the continent. The tourism sector accounts for 7.9% of the regional economy and will provide more than 17 million jobs by 2024, according to the World Travel and Tourism Council.
In view of the growth of the sector and its importance for the economy, OBS Business School, an institution belonging to Planeta Formación y Universidades, has published the report "Evolution and challenges of the tourism sector in Latin America", directed by Professor Albert Guivernau. The study explores the evolution of tourism in Latin America, analysing travellers' favourite destinations, its economic contribution and the challenges facing the sector.
As the school's report indicates, in 2022 the tourism sector in Latin America contributed almost 16.4 million jobs, or 7.7% of all jobs in the region. Although with the arrival of the pandemic this was one of the sectors that suffered the most losses, the various governmental and private efforts have allowed the region to once again position itself as a place that enchants and attracts tourists with its diversity and natural and cultural beauty. By 2024, a 13% increase in travel and tourism market revenues in the region is anticipated, with growth of more than 10% in countries such as Chile, Peru and the Dominican Republic.
According to Guivernau "almost 70% of travellers make medium stays in LATAM (ranging from 4 to 13 nights), while short and long stays represent smaller percentages, 7% and 23% respectively. Travellers are staying longer in Latin American destinations, opening up a great opportunity for visitor spending in the region".
Investing in this sector improves the quality of the tourist experience, but it is also essential to improve the quality of life of locals. The expert states that "GDP growth in Peru and Colombia has boosted investment in new infrastructure, facilitating access to remote destinations and improving both the tourist experience and the citizen's day-to-day life.
Colombia, a booming destination
According to the OBS Business School report, Colombia has emerged as a popular tourist destination in the last decade. "Cities such as Cartagena and Medellín have seen an increase in the number of tourists thanks mainly to improved security and international promotion," says Guivernau.
In 2023, Colombia welcomed 5.86 million visitors and is expected to contribute USD 3.8 billion to GDP in 2024.
Challenges and opportunities for the tourism sector in Latin America
To continue improving the tourism sector in Latin America, it is important to address some critical points so that both tourists and citizens themselves have better experiences in the region. According to Guivernau, it is important to target these improvements to complete the economic recovery of the industry and encourage a better tourism model:
- Infrastructure: Many destinations in Latin America lack the necessary facilities to handle large flows of travellers in a sustainable manner. The lack of adequate roads, modern airports and basic services limits the growth potential of tourism in the region.
- Sustainability: Implementing sustainable tourism practices presents several challenges, such as the need for funding and resistance from local communities. However, it also offers opportunities to diversify the tourism offer and attract a growing segment of increasingly aware travellers.
- Security: Violence and crime are significant concerns for potential tourists, which can be a disincentive to visit. However, several countries have implemented strategies to improve security. In Mexico, for example, tourist zones have been established with increased police presence and security measures to protect visitors. In Colombia, improved security in cities such as Medellín has been key to fostering a change in the perception of the country.
- Public administration: Public policies play a crucial role in the development of the sector. The implementation of effective regulations and the promotion of tourism can boost the growth and sustainability of the industry. For example, flexible visa policies and tax incentives for investments in tourism infrastructure have been effective in several countries in the region, according to UNWTO.
- Social impact: Tourism can have a positive impact on local communities, improving their quality of life through job creation and improving a region's infrastructure. However, it can also present challenges, such as gentrification and loss of cultural identity.
"Tourism in Latin America has experienced impressive growth in recent decades, becoming a fundamental pillar for many economies in the region," says Guivernau. With this in mind, if the promotion strategies of certain destinations are strengthened and the challenges of the sector are addressed, Latin America could lead the global tourism figures. As mentioned above with country branding, the only risk is that they will want to stay.
Content written by:
High Results
OBS Business School's Press Office