Emerging Trends and Future Prospects – FMIBlog

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The South American tourism market is set for remarkable growth, with a projected increase in market size from USD 333.2 billion in 2023 to an estimated USD 347.6 billion in 2024, marking a Year-over-Year (Y-o-Y) growth of 4.3%. Forecasts indicate that the region’s tourism industry will experience a compound annual growth rate (CAGR) of 4.7%, reaching an impressive valuation of approximately USD 549.9 billion by 2034.

The tourism sector in South America, representing approximately 2%-3% of the global tourism market, is on track to maintain its upward trajectory, driven by various factors including enhanced infrastructure, rising international tourist arrivals, and growing interest in eco-tourism, adventure tourism, and cultural experiences.

South America is home to some of the world’s most breathtaking landscapes, including towering mountain ranges, exotic beaches, vast rainforests, and iconic natural wonders such as Iguazu Falls, the Amazon Rainforest, and the Galápagos Islands. The region’s rich history, vibrant festivals, and diverse cultures make it a compelling destination for tourists worldwide. From the colorful carnivals of Brazil to the ancient ruins of Peru, the region’s offerings are diverse and captivating, ensuring South America remains one of the most sought-after tourist destinations globally.

Despite facing challenges in the aftermath of the COVID-19 pandemic, the tourism market in South America showed resilience in 2023, recovering to near pre-pandemic levels. With the pandemic’s impact largely behind, the market is expected to continue its growth in the years to come. Countries like Brazil, Argentina, Colombia, and Chile, along with up-and-coming destinations such as Ecuador and Costa Rica, are expected to dominate the tourism landscape.

Key Factors Driving Growth

The South American tourism market is benefitting from several key drivers, including:

Enhanced Infrastructure and Connectivity: Major infrastructure projects, such as the Panama-to-Patagonia Highway, are improving regional accessibility. Expanding air routes, particularly through low-cost carriers, are also making travel more affordable, leading to increased intra-regional tourism. South America’s rising popularity as a long-haul destination continues to attract visitors from North America, Europe, and beyond. Sustainability and Eco-Tourism: South America is positioning itself as a global leader in eco-tourism, with the Amazon Basin, Andes Mountains, and Galápagos Islands drawing eco-conscious travelers. Countries like Costa Rica and Ecuador have embraced sustainable tourism practices, significantly contributing to their economies and setting the stage for further growth in the eco-tourism sector. Cultural and Adventure Tourism: Cultural tourism remains a cornerstone of South America’s appeal. Festivals such as Brazil’s Carnival, Argentina’s Mendoza Wine Festival, and Colombia’s Barranquilla Carnival, along with historic landmarks like Machu Picchu, attract millions of visitors each year. Additionally, adventure tourism, including trekking, bird watching, and wildlife exploration, continues to thrive, particularly in countries like Peru, Argentina, and Chile. Emerging Secondary Destinations: While major cities like Rio de Janeiro, Buenos Aires, and Bogotá remain dominant, secondary destinations such as Bariloche in Argentina, Salvador in Brazil, and Cusco in Peru are experiencing increased international arrivals, driven by their rich cultural experiences and sustainable tourism initiatives. Digital and Online Booking Trends: Online booking platforms are shaping the future of tourism in South America. Platforms like Booking.com, Expedia, and Airbnb have become increasingly popular among travelers, offering ease of access, competitive pricing, and a wider range of choices, enhancing the overall tourist experience. This trend is particularly prevalent in countries with high internet penetration, making online bookings the most preferred method for securing accommodations and travel experiences in the region.

Regional Insights

Brazil: The largest economy in South America, Brazil continues to be a major draw for tourists. The iconic Carnival in Rio de Janeiro alone attracts over 2 million tourists annually, generating over USD 1 billion for the local economy. Brazil’s extensive beaches, Amazon Rainforest, and world-class cities such as Rio de Janeiro and São Paulo solidify its position as a top travel destination. Argentina: Known for its natural beauty, from the glaciers of Patagonia to the vineyards of Mendoza, Argentina offers a unique travel experience. Iguazu Falls attracts millions of visitors each year, while Buenos Aires’ tango culture continues to charm tourists. Argentina’s growing eco-tourism and wine tourism markets contribute significantly to its tourism sector. Chile: Chile’s diverse landscapes, from the arid Atacama Desert to the glaciers of Patagonia, make it a favorite for nature and adventure travelers. The country’s burgeoning astro-tourism sector, especially in the Atacama Desert, continues to attract international visitors. Chile’s commitment to sustainable tourism practices and adventure offerings continues to make it a standout destination.

Key Companies Profiled

Pentravel

CVC Travel

Thompsons

Suretravel

VIAJANET

Hostelworld Group

Harveyworld

IGO Travel

Computravel

LuxuryAfrica

Despegar

For instance

In 2023, CVC Corp signed a Memorandum of Understanding (MoU) with Cape Verdean tourism stakeholders to re-establish direct flights between Brazil and Cape Verde starting 2024. This initiative aims to enhance connectivity and promote tourism between the two regions after the disruption caused by the pandemic. IGO Travel is enhancing its portfolio by introducing new travel packages that emphasize eco-friendly tourism options. The company aims to attract environmentally conscious travelers looking for unique experiences within South America. Harveyworld continues to operate as a travel agency with a focus on personalized service. Recent developments may include adapting their packages to cater specifically to emerging trends in adventure and experiential travel.

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South America Tourism Market by Category

By Tourism Type:

Religious Tourism Cultural Tourism Medical Tourism Others

By Booking Channel:

Phone Booking Online Booking In Person Booking

By Tourist Type:

By Tour Type:

Independent Traveler Package Traveler Tour Group

By Consumer Orientation:

By Age Group:

15-25 Years 26-35 Years 36-45 Years 46-55 Years 56-65 Years 66-75 Years

About Future Market Insights (FMI)

Future Market Insights, Inc. (ESOMAR certified, recipient of the Stevie Award, and a member of the Greater New York Chamber of Commerce) offers profound insights into the driving factors that are boosting demand in the market. FMI stands as the leading global provider of market intelligence, advisory services, consulting, and events for the Packaging, Food and Beverage, Consumer Technology, Healthcare, Industrial, and Chemicals markets. With a vast team of over 400 analysts worldwide, FMI provides global, regional, and local expertise on diverse domains and industry trends across more than 110 countries.

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