Foreigners’ spending falls to the worst level in 17 years and the tourism sector fears Brazil’s isolation – 04/08/2021 – Market

Companies that work with tourism in Brazil are already accounting for heavy losses from the pandemic and, now, fear for the future. The perception is that the increase in contagions and deaths associated with the delay in vaccination tends to leave the country outside international routes for a longer period than initially forecast.

According to a survey by CNC (National Confederation of Trade in Goods, Services and Tourism), achieved first hand by sheet, the new coronavirus pandemic led to the closure of 35,500 establishments in the tourism sector in 2020. This is the biggest annual loss since the 2016 crisis, when 44,900 establishments closed their doors.

The number of vacancies lost was even greater.

According to the Caged (General Register of Employed and Unemployed), which accounts for formal jobs, last year alone, the sector closed 397 thousand formal jobs. The number is equivalent to a shrinkage of 12.8% of the tourism workforce.

The survey points out that establishments are being closed in a general way throughout the country, but the biggest casualties were concentrated in São Paulo (10.9 thousand), Minas Gerais (4.1), Rio de Janeiro (3.7 thousand) and Paraná (2.6 thousand).

Bars, restaurants and similar were the ones that had the biggest losses – retraction 28.61 thousand in the year -, followed by hotels, inns and similar ones, which registered the closure of 3.04 thousand points.

The entire industry chain was affected. There are records of business closings in the segments of travel agencies, road transport (-1.39 thousand), cultural and leisure services (-1.02 thousand) and car rental companies (-0.2 thousand).

The increase in the pandemic this year, with record cases and health collapse, coupled with the government’s difficulty in implementing a large-scale vaccination program added an additional problem – the alienation of foreign tourists. The prospect is that Brazil will take more time than other countries to enter the global tourist itinerary.

Fabio Bentes, CNC economist and responsible for the research, estimates that, in relation to the generation of revenues, 2021 is already another lost year for Brazilian tourism. According to him, it is not feasible for the sector to be able to outline a consistent recovery this year.

“The tourism situation is in shortages. All short-term indicators of sales and employment show that the tourism sector is the most affected in the pandemic. If trade has restrictions, imagine tourism, ”he says.

“This year, for example, there is no way to think about international tourism. There is only national tourism and, even so, very limited because of the restrictions and blockages in the cities. There is no use doing marketing. The sector will not be able to take off in the short term ”, says Bentes.

The economist says that the sector needs emergency measures that can, at this moment, alleviate the fixed costs of businesses that remain stationary waiting for the control of the pandemic.

“The re-edition of BEm’s MP [com cortes de jornada e salário, além de suspensão de contratos] it would help to reduce costs, but there must also be a postponement of federal and municipal taxes, such as ISS ”, he says. “Another point would be to reinforce the Fungetur fund, which includes micro and small companies in the sector”.

As the tourism sector is branched out, uncertainty also affects businesses like exchange offices. According to ABRACAM (Brazilian Foreign Exchange Association), which accounts for 3,400 foreign exchange correspondents, the sector closed from March 2020 to February 2021 about 35% of foreign exchange stores, laid off about 30% of employees and has no prospects improvement for 2021.

The entity’s executive president, Kelly Massaro, says that the sector has survived with new businesses, such as remittances of money abroad.

“We no longer expect to resume in the short term, precisely because the vaccine will be the new passport,” he says. “We will receive a number of foreigners close to zero here this year, whether because of borders or because of the fear that people will feel to enter Brazil, and the rebound effect is worthwhile: there will be restrictions on our access to other countries in the short term. ”

According to CNC data, between March and December 2020, spending by foreign tourists in Brazil was R $ 113.4 billion, down 80% compared to the same period in 2019.

The negative result was also noticed in January of this year, when, according to the confederation, the expenses of these tourists in Brazil were R $ 269 million, down 60% in relation to January 2020.

The cities that received the most foreign inflows in 2019, according to the most recent data available, according to Embratur, the Brazilian Agency for International Tourism Promotion, are Rio de Janeiro, followed by Florianópolis, Foz do Iguaçu, São Paulo and Armação dos Búzios.

The pandemic also impacted Embratur’s activity.

Since May 2020, the agency has worked with the Ministry of Tourism to promote only domestic tourism. This determination lasts six months after the end of the public calamity period, which was in force in the country until December last year.

In a note, Embratur informed that, in view of the legal norm, it will only be able to resume its activities to promote Brazilian tourism abroad as of July 2021.

According to Embratur, because of the second wave of coronavirus cases in the world and the imposition of stricter travel restrictions by countries, the resumption of international tourism to Brazil will depend on the reopening of borders and the gradual return of confidence of tourists.

According to the Statistical Yearbook of Tourism, the foreigners who most came to Brazil by air in 2019 are mainly from South America, followed by Europe and North America – 590.5 thousand from the United States.

Brazil received, on average, before the pandemic, 6 million foreign tourists per year, a number considered low, according to entities operating in the sector. According to Alfredo Lopes, president of Hotéis Rio, a union of lodging facilities in the municipality, and advisor to the state hotel association, international tourism in the most touristic city in the country is paralyzed.

“The presence of foreign tourists in Rio today is close to zero, there are practically only people who come here for some specific business or family gatherings”, he says.

Lopes says that this year the sector will continue with domestic tourism revenues.

“Brazil is living on the national market, which is also struggling. With the delay in vaccination, there is a concern that Brazil will be isolated from the world. We will only be free of this, when there is 85% of the population vaccinated ”.

The vice president of the Commercial and Business Association of Búzios, Rodrigo Sobral, says that in the health crisis the profile of tourists in the city has changed. Instead of receiving Argentines and Chileans, the city has survived on spending from Brazilian tourists who went to the city to do a home office.

“We have received Brazilians with high purchasing power who have been renting houses for seasons of 6 months to 1 year in the region. Regions of Búzios, like João Fernandes, which receive more foreigners, have suffered more ”, he says.

According to the Bahia Department of Tourism, before the pandemic, the state received around 500 thousand foreign tourists per year, either by direct flights or by having other states as entrance gates. The cities most sought after by foreigners are Salvador and Porto Seguro.

“In the first three months of 2020, there were 55,000 passengers at the airport in Salvador and in this period Porto Seguro received 6,983 people from international flights. From April until today, there were no flights of international origin at the airport in that municipality ”, says the secretary in a note.

From April to August last year, flights were suspended in the Bahian capital. This year, with the recrudescence of the new coronavirus in the country, there were 1954 landings in January and only 152 in February.

A similar situation exists in the state of Santa Catarina. According to data from the tourism department, the flow of passengers in the summer season at the airports of Florianópolis, Jaguaruna, Chapecó and Lages fell by 41% compared to the same period last year.

In the capital Florianópolis, there was a 60% drop in the movement of passengers arriving in the city by intercity, interstate and international routes.

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