Travel revenues in Latin America will reach US$98.5 billion in 2016, 23% more than in 2013, according to a report from research agency PhocusWright.
The results, which were revealed at WTM Latin America this week, also showed that online sales are growing twice as fast as the total market, and the forecast for 2016 is that online reservations will reach US$9.7bn, or 10% of the market.
According to the ‘Latin America Rising’ report, a key reason for this trend was found to be a group of emerging middle-class travellers who are keen on adventure.
This is however, affected by government regulations and incentives, the willingness of suppliers to invest in innovative platforms, the adoption of mobile devices and advances in security and forms of payment.
Brazil and Chile are more established when it comes to penetration of the online travel market and Peru and Colombia are yet to fully adopt digital approaches. Of these, the report stated that potential is greater in Colombia, due to its larger population and relative economic strength.
In Argentina however, the loss of value of the peso and high regulation of e-commerce means that the country is not a good investment option at this time.
Online travel agencies are encouraged to increase their local presence, with physical points of sale and call centres; the biggest local airlines in Brazil, TAM and GOL, took several years to establish direct relationships with global distribution systems.
Independent hotel brands dominate the market, but most of these do not have their own reservation platforms or IT structures to connect to online travel agencies and so, according to the report, this is a clear area of opportunity.