New report shows LATAM market holding up well
The Latin American Travel Association (LATA) has revealed the results of the 2017 LATA Travel Trends Report, which looks at the prospects for travel to Latin America based on market information as well as new research.
The report offers interesting insight into travel planning and will be of interest to a variety of sectors within hospitality industry, both in Latin America and around the world.
• The UK travel market
While Brexit has dominated the headlines over the last year, it has not had an immediate impact on holiday bookings. ONS data shows that customer confidence has held up well with positive year-on-year growth in overseas visitation and tourism spending. UK visitors made 4.6 million visits abroad in March 2017, up by 5% compared to March 2016.
Consumer spending is also more robust than might be expected. In March 2017, UK residents spent £3 billion on their visits abroad, a 13% increase when compared to March 2016*.
Latin America is showing similar growth rates to other parts of the world but the perceived cost and distance remain barriers to booking.
• Who visits and why?
LATA surveyed 3,641 consumers about their travel habits. 19% of respondents had travelled to Latin America in the last two years with the largest share (25%) falling into the 65+ age category followed by the 25-34 age category (representing 21%) and the 55-64 age category (representing 18%). Although the age spread is varied, it’s worth noting that the over 55s account for a significant 43%.
When asked what elements were included in their holiday, the most popular attribute was culture, history and heritage that was selected by 56% of participants who had visited the region. This was followed by wildlife and nature (46%) and walking and trekking (30%).
When asked what words or phrases most apply to Latin America, those who had travelled to the region chose the following four descriptions: beautiful (79%), distinct culture (78%), exciting (63%) and breathtaking (58%). Those that hadn’t travelled to the region weren’t quite so enamoured and opted for distinct culture (65%), beautiful (58%), out-of-the-ordinary (48%) and exciting (46%).
• Competitor destinations
Looking at competitor destinations, Asia stands out with 21% of respondents who have holidayed in Asia over the last two years having considered, and discounted, a Latin American alternative. The types of trips taken bear a striking similarity to the types of trips taken in Latin America, with key themes including culture, history & heritage, walking & trekking and wildlife & nature.
13% of those who have travelled to the Caribbean, 11% of this who have travelled to Africa and 7% of those who have travelled to North America or Australasia in the last two years considered and discounted Latin America as an alternative travel destination.
Travel industry results
Over 40 UK tour operators were surveyed of which 59% are Latin American specialists. In terms of types of holidays sold, the three most popular categories included wildlife and nature (86%), culture, history and heritage (81%) and luxury (78%).
Looking specifically at the Latin American region, over 62% of tour operator respondents reported a growth in bookings in 2016 (vs 2015). For the first quarter of 2017, 81% of tour operators have seen a growth in bookings to Latin America compared to the same period 2016. An overwhelming 76% of bookings are made directly with the tour operator (rather than via a travel agent).
The most popular type of booking to Latin America was
- Multi-destination trips
- Tailor-made holidays
- Highlights tours
• Customer demographics
The largest share of tour operator sales to Latin America in the last two years is amongst the 55-64 age group accounting for 29%, followed by the 45-54 age group (23%) and the 65+ age group (20%). 52% of bookings are couples, 18% families, 17% groups and 13% solo travellers.
• Barriers to booking
47% of tour operators claim that the main barrier to booking a Latin American holiday is cost, 18% claim it is due to distance a/o length of travel and 15% cite concerns around the zika virus.
• Growth destinations
Destinations seeing the largest amount of growth over the last two years include Costa Rica, Chile, Argentina, Peru and Colombia.
Travel agent feedback
LATA surveyed 254 travel agents. When asked how confident they felt when selling trips to key destinations, Latin America came at the bottom of the list behind Europe, North America, Asia, the Caribbean, Australasia and Africa. The same applied when asked to rank the destinations in terms of the ease of earning commissions. In this instance, Asia came out on top, followed by Europe, North America, the Caribbean, Australasia, Africa and then Latin America.
When asked what one factor would help sell more holidays to Latin America, 52% cited a better knowledge of the destination. Similarly, when asked what the travel industry could do to help sell more holidays, 52% opted for training (to increase product knowledge).
In a year of change and uncertainty, it is not surprising to see people seek the support and protection offered by a tour operator. The UK travel industry reports an increase in year-on-year bookings to Latin America as well as increases in passenger expenditure and business confidence. Despite positive gains, the industry claims that the main barrier to bookings is the lack of knowledge with more than half of the travel agent respondents citing their lack of knowledge as a major deterrent when trying to sell holidays to Latin America. There is a demonstrable desire amongst the travel trade to learn about the destination offering a valuable opportunity for Latin American tourist boards and tour operators to deliver meaningful training sessions to help drive sales and visitation.
Another major barrier to bookings is the perceived cost of travel to Latin America suggesting that tourist boards should also develop campaigns to showcase the extraordinary value for money offered in the destination and the kind of experiences that money simply can’t buy.
The findings demonstrate an appetite for travel to Latin America, particularly amongst the senior market, representing the largest share of those who have travelled to Latin America in the last two years. This presents a considerable opportunity with the 60+ market now accounting for the UKs largest share of tourism expenditure as well as over 80% of the UKs wealth.
The full report can be downloaded here.