Latin America: relegated destination

Juan Fernández

20 April 2003

Latin America as a tourist location seems to be losing its charm. Without better security and first-rate sanitation, it will be difficult to regain its appeal. Until a few years ago, Brazil and the Dominican Republic, for example, were two countries with high tourist demand. In 2002, the number of international tourists there fell by 7.2 percent and 2.5 percent, respectively.

Latin America is losing its appeal as a tourist attraction. Recovery of the sector is intimately linked to the contribution of business schools in managerial matters.

Esteban Martínez, a brand manager for a large drinks company in Colombia, does not include Latin America in his tourist destination guide. Every year, Martínez rules out the possibility of visiting countries in the region and opts for destinations that are, in his view, more attractive, better organized and more easily accessible.

Although personal security is not a factor in his decision, for this executive, a large part of Latin American sites mean adventure tourism. “I prefer peace and quiet, variety, comfort and culture – things the European countries offer me,” he explains.

Martínez’ attitude is typical of frequent travellers, and it is growing. Preliminary estimates from the World Tourism Organisation indicate that, with a 0.6 percent drop, the Americas was the only region that dipped into red figures during 2002. While Europe consolidated its top spot as the world’s most visited region last year (411 million tourists), America lost its position as number two, overtaken by the Asia-Pacific, which drew 130.6 million.

Latin America as a tourist location seems to be losing its charm. Without better security and first-rate sanitation, it will be difficult to regain its appeal. Until a few years ago, Brazil and the Dominican Republic, for example, were two countries with high tourist demand. In 2002, the number of international tourists there fell by 7.2 percent and 2.5 percent, respectively.

The exception is Argentina, where tourism may become an important source of foreign currency. According to the WTO, Argentina registered the greatest increase in tourist numbers in the world during 2002 (15.4 percent).

In the 2002-2003 summer season, tourist spending in Argentina reached US$815 million, the most successful in the last 12 years, according to the Argentinean Federation of Hotel and Gastronomic Entrepreneurs. The reason? Devaluation of the local currency has reduced costs for foreign visitors.
[*D Made-to-measure management *]
But the general situation is more than provisional, and requires going beyond linking Latin America with adventure tourism. In most of the countries in the region, there is no sign of any state policies on tourist activity. On the contrary, bureaucracy impedes it. No value is placed on the immense importance tourist activity holds for the economy and local development, nor is it fully appreciated. Measures are adopted which discourage such activities. “Governments lack continuity in their policies, as well as the sensitivity required to understand tourist activity as an economic and social strategy for furthering local development,” explains Caio Carvalho, former Brazilian minister for tourism and sports, and a collaborator on the postgraduate course in Tourism Administration at the School of Business Administration in São Paulo, the Getulio Vargas Foundation (FGV-EAESP).

How to make South American tourism more competitive, and untangle its bureaucracies at the same time? The answers lie in reinforcing the role of business schools, who are entrusted with the task of forging improved management techniques.

Marcos Palaces, Argentine chairman of the Latin American International Tourism Fair (FIT), believes that the role played by Latin American business schools, and by university education institutions in general, is insufficient. “Schools should grant special importance to tourism as an economic element, instead of simply treating it as a leisure activity. This would raise awareness of its influence on the growth and development of the country,” he declares. “It must be repeatedly stressed that tourism is a hierarchical, non-traditional export that far outweighs more traditional exports.”

Management must also assume a greater commitment. “Efforts by national administrations to attract investment that could facilitate longed-for development are not backed up by the necessary technical expertise,” explains Palaces. “Carrying out prior feasibility studies on quality tourism is essential.”

Caio Carvalho goes even farther. “The economic ministries, and many of their economists, are too short-sighted to understand the potential this sector could bring in job creation and the influx of foreign currencies,” he says. “We in Latin America must work on our professional training and qualifications.”

But improved training and better qualifications in tourism management will only come about through the work of business schools. Despite considerable diversity among the sectors on the different continents, experience gleaned at European and U.S. educational institutions can make an invaluable contribution. It is not a question of replicating tourism models from far-off lands in Latin America. Rather, the idea is to identify failures or successes and learn from them.

Spain, for example, is the tourist destination par excellence. “Examples from its business schools are worth taking into account,” says the FIT’s Marcos Palaces. Caio Carvalho agrees: “When adapted to the reality and the regional and cultural particularities of each country, their experiences can be put to good use.”

Business schools like the Instituto de Empresa (IE) can make a significant contribution. “The tourist sector boasts managers with thorough knowledge of their business practices, yet they are totally unaware of alternative management techniques,” explains Ramón Díaz, Director of the IE’s Master in Tourism Management Programme. “We seek with this course to develop the managerial capabilities of professionals working in the sector, so they can acquire command of business management tools and be able to develop innovative competitive strategies.”

For Latin America to again prove enticing as a tourist spot, it has to provide sound public infrastructure, modern tourist legislation, a comprehensive range of quality offers and effective promotion of its destinations. “In the IE we aim to endow managers in this sector with the skills required to develop an attractive market position, and make them aware of aspects they must take into consideration when promoting tourist destinations,” Díaz says. “New approaches must be found to promote tourism in Latin America to develop specific areas for international tourism, and boost domestic tourism with formulas adapted to satisfy local demand.”

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