Despite Bad Infrastructure Brazil Expects 17% Growth in Tourism This Year

Brazil's colonial town Ouro Preto Brazil's tourism sector should continue growing in 2008, according to businessmen and executives in the sector heard in the Annual Research of Economic Conjecture in Tourism, disclosed this Monday, March 17, by the Brazilian Ministry of Tourism and the Getúlio Vargas Foundation (FGV), a renowned business administration college in Brazil.

According to the study, 70% of those interviewed bet on the growth of the country's economy, 83% believe on an improvement in industry and expect an average increase of 16.7% in company revenues.

Researchers of the Brazilian School of Public and Business Administration at FGV heard businessmen and executives from the 92 largest companies in the sector in Brazil, which together posted revenues of 34.1 billion Brazilian reais (US$ 19.8 billion) in 2007, including airlines, travel agencies, car rentals, hotels, receptive operators, tourism operators, fair and event promoters and road transport enterprises.

In 2007, according to the study, the average variation of company revenues was 14.8%, powered mainly by car rentals, airlines and receptive operators, and there was 23.5% growth in the hiring of personnel, boosted mainly by airlines, car rentals and tourism operators.

In 2008, only receptive operators did not expect expansion of revenues. For this year companies forecast growth of 8.5% in personnel, especially airlines and car rentals, 4.3% in average costs, mainly in airlines and receptive operators, and an average increase of 5.5% in prices, once again mainly in airlines and receptive operators.

All the sectors researched plan to invest in 2008, in the case of travel agencies the investment should total 3.2% of revenues, to be applied to technology, infrastructure and training, in airlines the funds should be turned to the purchase of new aircraft, technology and training of labor.

In the case of car rentals the money should go to the opening of new shops, marketing and information technology and in hotels investment should be made in expansion, renovation and maintenance of the infrastructure, information technology and training. Hotels should reinvest on average 14.5% of revenues.

Approximately 55% of receptive operators forecast investment in technology and marketing; tourism operators expect to invest on average 7.9% of revenues in information technology, training, shop opening and development of new products.

Fair and event promoters expect average investment of 10.1% of revenues in new business, training, technology, equipment renting and marketing and coach operators plan to invest in the renewal of buses, training, technology and marketing.

The companies also pointed at some factors that may inhibit the sector's growth in 2008, among them taxes in the country, the continuation of the aerial sector crisis that Brazil has been facing since the second half of 2006, the inadequate legislation, problems in airport infrastructure, and the condition of highways, among others.

The research also shows that 76% of companies heard invested in social responsibility and corporate programs in 2007 and that 58% have specific budgets for this reason. They invested 10.5 million reais (US$ 6.1 million) in actions turned to the environment and in education for children and adolescents last year.

Last year, tourism had record performance in Brazil. Almost 6.5 million international arrivals were registered in the country, and over 50 million domestic arrivals, with expenses made by foreigners on the national territory reaching almost US$ 5 billion and expenses made by Brazilians abroad reaching US$ 8.2 billion.

The tourism trade balance deficit is attributed to the depreciation of the dollar against the Brazilian real (16.7% in 2007), which made foreign trips and purchases abroad cheaper.

The industry's performance is credited to the good moment of the Brazilian economy, which grew 5.4% last year, the best result since 2004, according to the Brazilian Institute for Geography and Statistics (IBGE).

Anba – www.anba.com.br

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