Tourism in LAC, a great opportunity

In 2020, tourism suffered a historic blow: the pandemic confined the world and travel was suspended. The tourism sector suffered a dramatic downturn. Five years later, Latin America and the Caribbean (LAC) are back above pre-covid-19 outbreak levels.

In fact, the region closed 2024 with 103% of travelers compared to pre-2020 levels, while the world as a whole achieved a 98% recovery from 2019 figures. Globally, Asia has been slower to rise due to the restrictions imposed there. However, our continent has already achieved a recovery in revenue of 113%.

Unstoppable, tourism is growing, even if cities like Barcelona or Venice are looking for ways to organize it because the massification of travelers increases rental prices and displaces the local population by one of greater purchasing power. However, industry forecasts indicate that the number of travelers will continue to increase, and not only in large cities.

The pandemic brought about virtuality, and since then digital nomads have been changing the dynamics of traveling alone for vacation or work. With the only condition of having connectivity, they seek natural destinations that allow them to live well at a lower cost.

Oscar Rueda, director of Tourism at CAF -development bank of Latin America and the Caribbean-, knows that tourism is a resilient and adaptive sector like few others and that, given the trends of today's travelers, the most desirable destination is LAC.

Today's travelers, rather than returning with a photo next to a monument, prefer experiences with the landscape and their communities.

Current trends

"Today's travelers want to learn from the locals, from the indigenous peoples, from their ancestral medicine and their vision of the world. LAC offers a lot of that, in addition to nature, there are other attractions that mobilize travelers to live deeper experiences," Rueda explained.

The region is home to a large part of the world's biodiversity. It also has six of the world's most megadiverse countries, 11 of the 14 biomes on Earth and 36% of the world's intact forests.

In such a context, tourism emerges as a great opportunity. The figures seem to make this clear: in the first nine months of 2024, 1.1 billion tourists had traveled to international destinations and, according to the latest UN Tourism World Tourism Barometer, one of the regions with the greatest recovery was Latin America.

If in the world, in general, 11% more people decided to pack their bags compared to 2023, in Colombia, for example, the historical record of foreign visitors was surpassed by reaching 6.2 million. Weekly air operations also grew by 23%. In the region, apart from Colombia, the best-performing destination was Curaçao.

Curaçao, not to mention Central America and the Caribbean.

Ethnic and sustainable approaches

One of them is to give value to the manifestations of ethnic groups so that visitors get involved in them hand in hand with the locals. One example is CAF's pilot plan in Brazil, which stimulates Afro-tourism and puts Afro-Brazilian entrepreneurs at the forefront to incorporate experiences that involve their culture, history and experiences.

A second option is to create spaces for nature conservation with the possibility for indigenous communities or locals in the territories to transmit their knowledge to visitors. This added value avoids habitat depredation because it is guided by the community itself, which provides the services and cares for its territory.

In fact, an alliance with ethnotourism was launched at this year's Fitur fair in Madrid to reward tourism entrepreneurship projects that turn ancestral knowledge into products.

An additional experience that generates great impact is the coffee cultural landscape, which has gone from being a visit to a farm to an involvement of the visitor with a coffee processing plant to learn how the process goes from the seed to the cup. Something similar happens with cocoa in Ecuador or Mexico. The tasting and the experience of participating in the production and transformation of cocoa is today a tourism product of wide growth.

A fourth approach responds to culture. While beach and sun destinations tend to resemble each other, cultural manifestations are unique and memorable for that very reason. Moreover, they are not in competition with each other, because each has a different experience.

The Inti Raymi in Peru, the Carnival of Barranquilla in Colombia, the Jesuit missions in Paraguay or the Day of the Dead in Mexico do not fight against each other, but each one is an attraction unique enough to attract visitors on its own.

To do so, it is necessary to turn those attractions and diversity into tourism products that can be offered. Peru and Mexico, in fact, have already turned their gastronomy and culture into cultural manifestations that attract tourists on their own.

A fundamental line of action is when communities come together to offer community and sustainable tourism. Sustainability is identified with the environment, and requires involving the community and making it participate so that it does not feel discriminated against; involving it in the care of its territory and allowing it to provide services, as well as considering the number of visitors to be received and the contingencies that may arise. Adequate planning avoids possible shocks.

Better infrastructure and planning

CAF will award ethnic tourism ventures in 2025. Last year it had awarded the best proposals in community tourism. Both seek that, when the tourist returns home, the place visited is better than when he/she found it because the visitor has contributed to improve the community.

Finally, for tourism to be a real opportunity, it is necessary to improve the infrastructure of the places, as well as to allow the flow of foreign investment. If the public sector invests in regions with tourism potential and allows their development, then these sites are leveraged by private investment and their development increases.

CAF has been developing tourism investment guides that include the incentives and conditions of countries such as Uruguay, Honduras, Jamaica, Peru, El Salvador, Mexico, Brazil and Panama.

CAF, for example, invests in urban renewal by financing historic centers such as those of Panama, Lima or Santa Marta, which have been converted into tourism hubs; or in basic sanitation infrastructure and land-use plans, as in Colon (Panama), so that better tourism can be offered.

One thing is clear about these investments: today's tourists, in addition to experiences, require infrastructure and connectivity.

Latin America and the Caribbean have a great joint opportunity before them. The invitation is to offer circular fares and joint promotions in a great continental open skies policy, beyond the considerations of each destination or airline, with a view to a common benefit.

It is clear that tourism will continue to grow, and it is important to map out strategies now. According to the Global Wellness Tourism Market research report, the sector will reach US$2.3 trillion by the end of 2033, because more and more people are seeking physical and mental health in their travel, and are opting for destinations that allow them a greater connection with the environment and their consciousness.

According to another report, Sustainable Tourism Market 2024-2028, by Research and Markets, the global ecotourism market is expected to reach US$331.62 billion by 2027, with a compound annual growth rate of 10.87%.

The region can still achieve enormous development thanks to its natural offer of at least 14 diverse ecosystems and natural attractions, ranging from the Caribbean to Patagonia, and its cultural manifestations, ethnicities and population groups. Based on a model that benefits communities and protects the environment, tourism is already the best opportunity.