Number 34 - march/23
INDEX
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Main Facts
05
Confidence Indexes
06
Travel and Tourism
Brazilian Overview
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MAIN FACTS In Brazil, a recent fact raised one more issue in heading towards the economic growth upturn. Americanas, a huge retail chain in the department stores’ segment and with considerable operation as a marketplace, in the digital environment, had a major problem in its financial balance, still under investigation, which generated a debt of great proportions with banks and companies. This retailer, by then, was considered to have high credibility in the financial market, with the highest credit score, the so-called triple A. Now, with the billionaire debt, banks will rise their credit selectivity, for all sorts of companies, including to consumers in general, resulting in even pricier financing costs, due to the already high interests basic rate, in the threshold of 13.75% a year. Besides this incident, the collapse of Silicon Valley Bank and the difficulties faced by Credit Suisse Bank also contributed to increasing the alert level in the world. The world finds itself in a situation of excessive interests, with the Central Banks seeking to restrain inflation. In Brazil, the picture is a little different, or less challenging, especially for the financial system because the interest rate, on average, has always been high and with large fluctuations. In other words, situations like the current one isn’t any big news to business owners. The Brazilian Central Bank, through COPOM’s meeting (Monetary Policy Committee), decided in the last meeting in March, to keep the rate at 13.75% a year, still cautiously looking at inflation. It’s expected that from the middle of the year on, it will be possible to think about the beginning of the rate’s reduction.
The inflation in the country, in turn, presents lower rates than a year ago, however it is still elevated and under pressure. The general index, IPCA by IBGE, increased 5.60% in 12 months. In the same period last year, the accumulative rate was 10.54%. The traditional readjustments in the education area, and the return of federal taxes on fuels, influenced the increase in prices at the beginning of this year. The tendency is that inflation circles around 6% this year of 2023, still considered to be quite high for a healthier recovery in families’ incomes. Another highlighting point is that with the external and internal uncertainties, Real hasn’t gotten its appreciation. Since the beginning of the year, the exchange rate circles around 5.20 reais per dollar, and with the news on SVB and Credit Suisse, there was a new rise to the 5.30 threshold. The national currency would be an important path to help in the reduction of internal prices. Considering the scenario of expensive credit and high inflation, it’s natural to think about the restriction of families’ consumption. Adding to that, the elevated level of defaulting families in the country, which according to CNC, the National Confederation of Commerce, reaches 29.8% of households presenting overdue bills, recalling that the historical record was in November of last year, a level of 30.3%. The silver lining comes from job positions. According to data by IBGE, the unemployment rate in the country reached 7.9% at the end of last year, the lowest one since the last quarter of 2015. That way, with the real average income gently increasing it allows, gradually, the payment
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And to collaborate with the sector’s evolution, flight tickets for instance, although expensive, presented an average price drop throughout the past months. On the last GDP result, from 2022, which rose 2.9%, the service sector was responsible for 2.4 percentage points, being the growing engine in the country. Nevertheless, the rate in the last quarter shows a downturn, which causes an expectation for a weaker economy in 2023, even due to the effects of interests’ increase performed throughout last year. Therefore, the first quarter is coming to an end without major novelties or advances in the economy. There are many uncertainties, external and internal, which make channeling the reduction in interests difficult, and consequently, bringing a stronger traction to economic activity.
of defaulted bills, and the rise of expenditure in basic sectors like supermarkets and drugstores. Furthermore, when commerce available data up to the end of 2022 is noted, the asymmetry among sectors is clear. The performances have been marked by sensibility to credit, in other words, segments like household appliances, vehicles, and construction materials showing relatively worse results in comparison to supermarkets, clothing, and drugstores. Given a matter of methodological updating, IBGE hasn’t disclosed, by the elaboration of this BOMR, commerce and services’ January data. Anyhow, the general analysis is that the service sector, mainly the tourism sector, is in forthright expansion in the country, lifting off from the weak national growth. IMPORTANT DATA:
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In January, there was a positive balance, between hired and fired individuals, of 83 thousand formal job positions, according to data by CAGED.
The egg production in Brazil broke a record at the end of last year, of 4.06 billion dozens, which contributed to mitigate prices to consumers among increases in costs, and even the external pressure with cases of bird flu in the United States.
According to the survey by ABComm, electronic commerce should reach, in 2023, R$ 186 billion in revenue.
RESUME FEBRUARY/2023
Legend: Green, Red and Black The data get better, worse and equal than the previous month.
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CONFIDENCE INDEXES: The Consumer Confidence Index (ICC) follows the growth trajectory and, in February, pointed out a monthly increase of 2.7% and reached 128.8 points. In the annual counterbalance, the variation was even more significant, of 23.8%. It is worth highlighting that in the same period in 2022, the country was facing the ending of the Omicron variant and the beginning of consequences of the war in Ukraine. With a relatively more stable environment, with more job positions, and the inflation cooling down, it is natural that there is a gradual expansion of trust. The Trade Entrepreneur Confidence Index (ICEC) reached 112.3 points in February, a slight drop of 1.5% in relation to January, and of -3.8% in the annual comparative. Although still in the optimistic threshold, the reduction in the first months of the year was already expected in a certain way. This happens due to the adjustment in trust after commerce’s main period, Christmas. Besides that, high interests, and uncertainties in the economy, results in business owners being a little more cautious. Consumer Confident Index (ICC) and Comerce Businessman (ICEC)
Note: The ICC and ICEC vary from 0 to 200. From a 100 to 200 points, it is considered an optimistic threshold, and below 100 points, a pessimistic one. Although the indexes are from the city of São Paulo, they follow a tendency of what is happening in the rest of the country since the city, the largest in Brazil, represents 11% of the National GDP.
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TRAVEL AND TOURISM The 20th edition of the PANROTAS Forum took place at the beginning of March and brought several good news to the Travel and Tourism industry. AVIATION • The growth perspectives, according to Latam Airlines and Azul Airlines are good, but prices should continue in the heights for quite a while. • Azul announced the return of flights to Paris and a larger presence in Congonhas (São Paulo), the main airport in Brazil. • Latam is going to start flying to Los Angeles, in partnership with Delta, and to Johannesburg in South Africa, in the upcoming months. Miami could be one of the next announced flights in the alliance with Delta. Another Latam’s novelty is the beginning of sales via NDC, projected for May. • The recovery of the international air network in Brazil will only occur at the beginning of 2024, when the figures should equalize the numbers in 2019. From that moment on, the lost time should be recovered. OPERATORS • Figures from the main tour operators are already above 2019’s, especially because of higher prices and due to the reopening of international destinations. • Azul Viagens have announced that they will have package deals along with partner airlines, like United Airlines. • Orinter and Mondiale by Ancoradouro are promising more investments in travel agents, for instance trainings about international destinations. • Also, ViagensPromo should launch a new business model, with 200 partner travel agencies in a new company. The operator will also have 3 distri-
bution hubs of domestic flights in Brazil. • Brazil is still the main vacation destination, but trips to the United States, Argentina, and Europe are back in a solid way. Flights and visa requests to the United States are currently the biggest challenges. • The Brazilian government, by the way, with the new administration of President Lula, has announced that in October will once again require a visa from tourists coming from the United States, Japan, Canada and Australia, due to the reciprocity law. The Tourism community, mainly the receptive one, is against the measure but the decision has been made, and the Ministry of Tourism and Embratur are trying for this visa to be electronic and issued in up to 24 hours. 6 TRAVEL TRENDS TRVL LAB, PANROTAS’ research and market analysis division, in partnership with MAPIE, disclosed a new study carried out with travelers. And it got to 6 trends from these travelers for the following months and years.
1. TOURISM AS A PRIORITY The purchase of experiences is starting to be more important than the acquisition of material products. According to 29% of respondents in the study, traveling is a priority in their lives. 25% of them have an allocated budget for trips, and 23% affirm having already bought unplanned trips stimulated by discounts.
2. HUMANIZED DIGITAL TOURISM Although technology makes travelers’ lives a lot easier, they don’t want to relinquish humanized
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customer service. 30% of them affirm they prefer the human contact to digital convenience, while 13% consider the customer service via artificial intelligence tools to be satisfactory. 43% of travelers say that they will make their travel reservations online in the upcoming months, and 58% of surveyed individuals affirm that they are used to searching on several websites before booking. 51%, in turn, read the comments made by other travelers before making the reservation.
3. WELLNESS TOURISM Wellness Tourism is a priority for travelers heard by the survey. 54% find that trips are part of their health and wellness maintenance, while 32% take the opportunity to fit these experiences in their trips. At last, 19% of respondents intend traveling to destinations that focus on health and wellness.
4. TOURISM OF SUPER-EXPERIENCES Trips that encompass content are gaining strength, mainly in relation to visits, workshops, and experiences, which allow the traveler to know local culture aspects in a more profound way. Furthermore, there is a desire of rescuing the roots and ancestrally and being in touch with nature. 25% of individuals surveyed in the study prefer taking less trips, but having better quality experiences, while 23% want to visit places that cherish historic and cultural authenticity. 19%, in turn, want to travel to a destination with full contact with nature and/or ecotourism.
5. REGENERATIVE TOURISM The choice of sustainability increasingly becomes more present in travel decisions. After all, there’s an
increase in the collective consciousness in matters related to the climatic crisis and in the social impacts generated by consumption choices, which is beginning to reach Tourism in a more significant way. More and more clients will opt for sustainable, responsible, and regenerative alternatives. 28% of them treasure brands/companies that promote sustainability, while 15% are up to paying more for products and services that are environmentally and socially responsible, and 17% prioritize local and/or communitarian suppliers when making a purchase.
6. HYBRID TOURISM The increasing adoption of new work formats also affects tourism. Bleisure is here to stay and will demand adaptation of products, services, and experiences by the sector’s businesses. 40% of respondents say that they have flexibility to travel out of the high season, and 25% have flexibility to work anywhere. 18%, in turn, work remotely only. MAIN CONCERNS Regarding travelers’ concerns, the main one is related to violence and criminality, followed by flight tickets’ high prices and by the inflation and economic crisis. The survey was carried out with 1,348 Brazilian travelers from all regions in the country, belonging to the upper, middle, and working classes, and with ages between 30 and 59 years. The full study is available on trvl.com.br. UPCOMING EVENTS PANROTAS is attending great international events in the following months. Visit us in the WTM Latin America and ILTM Latin America, in São Paulo, and in the IPW 2023, in San Antonio, Texas.
This report is produced by PANROTAS and FECOMERCIOSP to support your business decisions. The contents are valuable assets to Destinations and Travel Organizations, both domestic as well as international. For further information please contact ri@fecomercio.com.br redacao@panrotas.com.br.
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