IVIS Country Analysis – Brazil

BRAZIL

348,945 Arrivals in the United States

Loss of 56,149 over 2002, -13.9%

25.6% of all Brazilian Long-Haul Travel

-12.2% over 2002

SUMMARY

In 2003, Brazilian total outbound travel declined 1.8 percent over 2002 to the lowest level in the past decade. Total long-haul travel also declined, down 1.9 percent compared to 2002. Brazilian arrivals to the United States fell 13.9 percent over 2002. As a result, the U.S. market share (MSI) declined 12.2 percent year-on-year for a total MSI of 25.6 percent, the lowest this decade.

In 2003, Brazil's economy was nearly stagnant, growing only 0.3 percent, despite the economic growth promised by President Luiz Inacio Lula da Silva. Lula enforced a policy of fiscal austerity required to bring the country into conformity with IMF loan requirements. This has caused the economy to stagnate. The country's inflation rate reached 14.7 percent and private consumption declined by three percent over 2002. In addition, the unemployment rate remained over seven percent. Although the Brazilian currency, the real, appreciated in value against the U.S. dollar during the first half of 2003, its yearly average exchange rate declined by 5.3 percent over its yearly average exchange rate in 2002.

With a market share of 25.6 percent, the United States earned only a slightly greater share of Brazilian long-haul travel than Italy (25.2%) in 2003. Italy's Adriatic neighbor, Croatia, welcomed an impressive 17.4 percent of Brazil's long-haul travel, followed by Portugal (7.5%) and the United Kingdom (5.1%). Italy, Croatia, and Portugal gained share in 2003, while the U.S. and the UK lost share.

Sources: Travel Industry Association of America; Global Insight; USDOC/OTTI.

Regionally, the United States (25.6%) is losing Brazilian market share to Europe, which received nearly two thirds (65.0%) of all Brazilian long-haul travel in 2003. The Caribbean region earned 19.7 percent of Brazil's long haul market, while Asia was a distant fourth with 2.6 percent of the market. While the Caribbean and Europe gained market share of Brazilian long-haul travel in 2003, Asia and the U.S. both lost share.

Sources: Travel Industry Association of America; Global Insight; USDOC/OTTI.