Brazil - Spotlight on the state of business travel
Updated: Jun 27, 2018
Today’s AP voice is from our VP of sales for Latin America, Cinthya Caggiano.
Most people in the industry had written off Brazil after 2016. After seeing a period of growth, Brazil’s recession and political instability affected not just the domestic business travel market but the international market as well. In its 2018 Global Travel Forecast, the Global Business Travel Association (GBTA) stated, “This growth has stagnated over the last few years, and Brazil’s business travel market is backsliding and losing much of the momentum gained early in the new millennium.”
However, I think this was perhaps a bit premature for three core reasons. And because of these reasons, there are opportunities for independent hotels abound. Like leisure travels, business travellers are looking for unique experiences and memorable stays. Independent hotels are well placed to capitalise on these trends and should be looking to augment their marketing, even perhaps getting support from hotel representation companies.
1) While travel might have slowed a bit, the overall trend is still upwards. In 2010, business travel spending in Brazil was $23.49 billion and in 2016, this was $27.22 billion.
2) Brazil’s largest airlines, Azul and GOL, reported in late 2017 that they saw positive trends in high yielding corporate demand. “I think we can say that with some certainty after a long time that we are seeing corporate demand pick up,” Azul stated. “We had a good close in demand in September and we saw it in October as well.” GOL estimates that approximately 70% of its revenue is driven by corporate clients, and both airlines have forecasted that they anticipate an uptick in 2018.
3) Demand for rental cars expected to increase in 2018. Localiza, a regional rental car company, entered into a partnership with Hertz, which included the purchase of Hertz Brazil in Q4 2016.
Naturally, with so many business travellers flying around and so many cars being rented, it isn’t a stretch to assume that hotels will reap the benefits as well.
Brazil, the largest and most diversified economy in Latin America, has seen substantial investment in the hotel industry in past decade. Both the 2014 FIFA World Cup and the 2016 Summer Olympic Games turbo charged the hospitality sector, and there continues to be a rapid increase in the number of rooms under construction. Hilton has announced a partnership with Atlantica to grow its Hilton Garden brand in the country and BHG and Accor Hotels recently announced a $63 million deal which will see Accor take over a portfolio of 26 hotels with 4,400 rooms. Furthermore, French chain B&B Hotels announced its intention to open roughly 30 units in Brazil by 2025.
I’m very keen to speak to independent hotels in Brazil who are looking to raise their profile and who want to discuss marketing and sales strategies on how to attract corporate travellers.