Chile’s urgent need to get tourism back on track
World Tourism Day invites us to ponder on the impact that the recent health and economic crisis has brought. Prior to the pandemic, the Travel & Tourism sector was one of the largest, contributing 1 in 4 jobs created in the last decade, in addition to 10% of the workforce and 10.3% of global GDP. International travel expenditure totaled USD 1.8 trillion in 2019 thanks to an industry that favors social development, generates employment while indirectly benefiting fields such as transportation, construction, food and entertainment.
The effect of COVID-19 was devastating for the sector worldwide: the market shutdown echoed with 60 million jobs lost in 2020 alone. However, since the second half of 2021 we have seen a certain recovery. Our region has led this rebound, specifically Brazil, Colombia and Mexico, which early on dodged travel restrictions.
Nevertheless, the future of the sector is auspicious. The World Travel & Tourism Council’s growth projections for 2022-2032 is a 5.8% average annual growth – twice the projected global GDP – and could return to 2019 figures by the end of 2023. Over the next decade, 126 million jobs will be created. But in order to make these numbers a reality in Chile, as well, it is necessary to work with both the private and public sectors and draft clear rules to face future crises. Chile missed an opportunity by being the last country to eliminate boarder restrictions and domestic mobility. Long distance tourists plan their trips 6 months in advance and, when looking for vacation destinations, did not think of Chile. The government must take actions to resume growth: provide security for visitors, increase the country’s marketing budget, encourage supply through tax exemptions and change the management model of national parks. Otherwise, 2019 figures will take at least 5 years to rebound. On the contrary, if we manage to make the sector grow at twice the projected GDP in the next decade, the direct contribution could increase from 3.2% to 4.5% and with the additional indirect GDP, hit 10%.
Hernán Passalacqua, Executive Director Fitzroy Tourism & Real Estate
