One of the fastest-growing markets in the world, Latin America is also a great place to visit.
In spite of occasional waves of political and economic instability, the region has been enjoying consistent growth in international and domestic tourism – last year, Chile, Colombia, Ecuador, and Uruguay recorded double-digit growth in arrivals, according to the last UNWTO annual report.
EBANX is a Brazilian fintech company that recently became a unicorn. The company provides local payment solutions in Latin America, helping global companies to enter and expand in the region.
The company's head of travel, Matthew Nutting, highlights the growth of Latin America’s travel market and how traveling is intrinsically tied into Latin America’s way of life.
What attracted you to work for a Latin American company?
Latin America is a truly exciting place for doing business.
E-commerce is growing around 25% to 30% per year and the travel industry is just one of the sectors that are benefitting. Access to the internet and smartphone adoption has helped the flourishing middle-class travel more than ever before.
At EBANX, we are committed to supporting the travel companies tap into the potential of Latin America. In addition to global travel, Latin Americans are continuing to enjoy regional travel which has been growing by double-digits in all the major markets.
Our partnership with UATP is also genuinely exciting as we can now enable airlines to offer local payment options including installments with domestic credit cards across Latin America.
Providing the connection between travel companies and the travel markets in LatAm represented a really exciting opportunity for me.
Despite recent economic and political instabilities in some counties, is Latin America still a market to prioritize in terms of travel?
It is. Latin America’s travel market continues to enjoy exponential growth with new airport infrastructure, airline routes, and the popularization of online booking platforms such as Airbnb, Booking.com, and Hopper.
Over the last year, it has become very apparent that traveling has become a part of Latin America’s culture.
It doesn’t matter if you are talking about Brazilians, Mexicans or Colombians, they are all eager to embrace the opportunity that recent economic growth has brought to them by discovering new places and countries.
It is not a coincidence that international trips departing from Latin America and the Caribbean increased by 9.3% in 2018, according to data from ForwardKeys. In the U.S., nearly 36% of all international visitors came from LatAm.
These impressive figures show that Latin America’s market is not only about potential sometime in the future – it is already thriving, despite any political and economic uncertainty. Latin Americans are keen on traveling, and this has not changed.
What would you suggest to travel companies that want to tap into this market?
I can not emphasize the importance of installments enough. They should be considered as table stakes for travel companies looking to expand into Latin America.
EBANX conducted recent research with over 3,000 Brazilian online consumers, which showed that four out of five respondents chose installments with purchases over $50. The more expensive the purchase, the greater the tendency to split the total amount into installments.
The travel costs are typically split into three, six, nine or twelve monthly payments. Having a local partner that can provide this payment option is essential for travel businesses to scale in Latin America.
Second, in Latin America, having a localized online presence has become crucial for any business, and this is especially true for the travel industry. The online and offline experiences often convene, and it is important that the merchant is where its clients are.
What are the particularities in Latin America’s travel market? Can you tell a little about the travel market in some of its countries?
Latin America is a very diverse region and there are nuances. In Argentina, for instance, 7 out of 10 Argentinians believe that traveling is a synonym of good living, according to a travel report by Kayak. Last year, almost 4.5 million Argentinian tourists traveled internationally according to INDEC (National Institute of Statistics and Census of Argentina).
In Mexico, family trips are a preference: 69% of Mexicans prefer to travel with their families, as reported by Sectur, Mexico’s Tourism Secretary.
In Brazil, the increase in the average income has seen an escalating number of elderly tourists. Domestic trips have also increased considerably in the last few years, they were up by 20% last year.
In summary, it is a very exciting time for the whole region.