After several economic and political disruptions across South America, there is now greater clarity in several countries, giving rise to compelling opportunities in some urban markets and across the leisure sector. The outlook appears bright throughout much of the region.
Among key markets in the region, São Paulo has seen stronger occupancy recovery on weekends compared to weekdays, but shoulder days (Sunday and Thursday), which combine both business and leisure travel, have been the best performing days in the market.
Following these disastrous few years, 2022 has seen a rather sudden return of international visitors, and the region should return to just over the levels it reached in 2019 by 2024.
Lifted by the Australian Grand Prix, Melbourne’s hotel industry reported its highest monthly room rates on record, according to preliminary April 2022 data from STR.
As of 4 April, the Thursday-Sunday (7-10 April) average in the market is 89% with a peak of 94% on Saturday night.
'Most of the markets in the region are only averaging around 36% of their pre-pandemic levels in gross operating profit per available room'
In August, hotel occupancy reached 72.3% of the 2019 comparable, which was the region's highest level since February 2020, as corporate cities continue to suffer from border closures and restrictions as well as lack of a MICE segment or international demand. However, most markets reached more than 50% of 2019 levels, led by Santiago (66.2%) and Quito (66.0%).
During the earliest days of COVID - 19, hotel average daily rate (ADR) in South America was as low as 47.8% below pre - pandemic levels. One year later, rates in the region have improved slightly - April’s 15.7% increase was the first year - over - year positive in the metric since the middle of 2019 - but still remain far from recovery.
GlobalData projects South America’s International tourism market will not reach pre-pandemic levels until at least 2022
US spending into South America is forecast to drop by 44.4% between 2020 and 2021 as travel restrictions due to COVID-19 have stymied visitor flows. Having featured in the top ten international arrivals in all the five major economies across South America in 2019, the reduction of this source of market will be detrimental for the travel sector.