Latin America has been making headlines of late regarding the rate that the Coronavirus is sinking its claws in some of its countries, more than others. Flights have been grounded. Borders closed. However, the latest data by ForwardKeys captures a glimpse of the silver lining.
The Big Picture
International arrival numbers have taken an enormous hit all around the world. The global average currently is showing an outrageous figure in the negative, down by 94% YOY. This is important to factor in once you examine the recent figures to Latin America, down by 90% YOY. Slightly better albeit still in the negative.
It’s only when you zoom into the Caribbean and Central America, that you notice that something positive is stirring in this region. Mexico is down by 81% and Puerto Rico is -69%. What’s behind such startling results?
The Deal Breaker for Latin America
Upon closer examination of weekly tickets issued for future travel to LATAM and the Caribbean, you can observe a gradual increase in bookings since May with a significant increase in September. In the chart below, you can see the Caribbean has consistently outperformed South America throughout the analysed period.
Meanwhile, Mexico has outperformed them all and showing positive growth, despite the global pandemic. Top tourist spots such as Cancun and Los Cabos are respectively -0.7% and +30.4% year on year for new tickets for travel from the USA when looking at ticketing from 30th August to 18th October.”
There are three noteworthy factors to consider here regarding this trend. One is the fact that Mexico and Puerto Rico have remained accessible throughout the pandemic as their borders were never completely shut. This is something Brazil and other destinations in South America are hoping to capitalise on now that they have re-opened their borders to salvage the massive drop in international arrivals, they experienced in Q3.
Two is the boom in regional travel – a trend ForwardKeys has seen take place in Europe during the summer and now in Asia. US tourism has been of great importance to both countries.
When examining the top flight searches to LATAM and the Caribbean from its key source markets: US, Canada, UK, and France; Mexico, Colombia, and Brazil were in top position in all its source markets.
The topflight routes from the US to Mexico shed even more light on which hot spots were attracting the most attention: Cancun and Los Cabos. Cancun was popular for holiday-seekers from NYC to LA, Dallas, Chicago, and Houston.
Lastly, point 3, is the drop in airfares to lure the brave-hearted sunseekers south of the border.
“New Normal” Trends
Airfares to LATAM and the Caribbean have dropped in Q4, 2020. Especially from the UK and USA to LATAM where prices have been slashed by 25% – 30%. To the Caribbean, we’ve seen France drop the cost of airfares by 27%, while over in Canada airfares have remained stable, down by just 1%.
Therefore, the cost of airfares may have contributed to a lift in bookings, however, predicting your next round of hotel guests or travellers, may be a harder call to make as we see a surge in last-minute bookings.
“The data we are seeing simply mirrors the unpredictability of travel. Travelers have many decisions to make these days, from thinking about the evolution of the pandemic, the travel restrictions and quarantines to even flight availability, and the cancellation policy of purchased tickets,” says Juan Gomez, Insights Expert at ForwardKeys.
Nevertheless, the outlook for the last quarter of the tumultuous 2020 looks rosier for LATAM and the Caribbean. Tickets confirmed for international departure in Q4, 2020 show Puerto Rico (-47.1%), Aruba (-50%), and Mexico (52.2%) still in the negative, however, above the global average of -83.3%. Asia, meanwhile, is the worst-hit region in the world, down by 92.9%.
“On the positive side, this data shows that there are people still keen to travel to LATAM and the Caribbean, holidays in warmer climates with spectacular scenery are seen as an attractive way to escape reality at the moment,” concludes Gomez.
To learn more about the data behind this article and what ForwardKeys has to offer, visit http://forwardkeys.com.
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