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By Nelson Belen, Contributing Writer

RIO DE JANEIRO, BRAZIL – This week, the Getulio Vargas Foundation released its 12th Annual Survey of the Economic Tourism Situation (PACET) commissioned by Brazil’s Ministry of Tourism. According to the detailed 120-page report, despite a rocky 2015 for most of the tourism sector, of nine different segments, car rental, road transportation, and tour operator segments are most optimistic for 2016.

Car rental companies lead the way with 99 percent forecasting 2016 profits, photo by Marcelo Camargo/Agência Brasil.
Car rental companies lead the way with 99 percent forecasting 2016 profits, photo by Marcelo Camargo/Agência Brasil.

The PACET report gathers data and performance metrics, as well as conducts extensive interviews with leaders from the eighty largest companies in Brazil within the tourism sector. In 2015, these companies earned revenues totaling R$64.6 billion.

The companies are divided into nine segments: travel agencies, car rental companies, lodging, tour operators, event organizers, fair promoters, air transportation, road transportation, and inbound tourism.

Based on all the information, the PACET survey presents its analysis of 2015 performance and forecast for the year ahead.

Regarding revenues earned in 2015 only three segments showed positive gains compared to 2014. Car rental companies’ revenue was up 21 percent, tour operators up twenty percent, and lodging revenue rose by ten percent from the previous year.

The remaining six segments all showed decreases from their 2014 revenues, with three in particular showing precipitous drops. Air transportation revenue dropped sixty percent, event organizers decreased 66 percent, and fair promoters plunged 68 percent in 2015.

According to the survey, following this shaky 2015, the tourism sector remains mostly divided as to its 2016 forecast. Of the eighty companies, forty percent predict an increase of revenues compared to 2015, while 29 percent predict revenues to remain stable and 31 percent forecasting a decline.

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Over eighty percent of road transportation companies expect revenue gains in 2016, photo by Valter Campanato/Agência Brasil.

Within the nine segments, car rental companies were the most enthusiastic with 99 percent expecting revenue gains in 2016. The main reasons cited for the optimism were the increases in domestic tourism and social acceptance of renting cars as opposed to buying.

Road transportation companies were next, with 83 percent expecting profits, followed by tour operators, with sixty percent predicting profits in 2016. Road transportation companies cited changes to tariff regulations as the top reason for their optimism, while tour operators, of course, noted the 2016 Olympics as the top reason for their positive forecast.

At the opposite end of the spectrum, air transportation companies were the least optimistic with none expecting revenue gains for this year. Among this group, 37 percent expect 2016 revenues to remain stable, while 63 percent forecast losses.

The event organizers segment also expressed pessimism with sixty percent expecting revenue losses in 2016. According to the study, Brazil’s current economic recession and, for air transportation companies, the reductions in the number of flights were the top reasons for the negative outlook.

Not surprisingly, the report also showed that of the segments expected to expand and invest in more resources and hiring in 2016, car rental companies again led the way, with over ninety percent indicating greater expansion in 2016 compared to 2015.

In commenting on the ministry-commissioned study, interim tourism minister, Alberto Alves, chose to focus on the positive aspects of the survey, namely the investment and job creation during a difficult period.

“In a challenging time as we are living, the projected increase in turnover and jobs in the sector is excellent news.” The interim-minister added, “It shows that tourism has good conditions to help Brazil cope with the crisis.”

Alves became tourism minister last week when Henrique Eduardo Alves resigned after less than a month on the job due to possible links to the mega-corruption Lava Jato (Carwash) scandal that has rocked the country.

This August, the tourism sector is expected to receive a major boost as up to 500,000 tourists will travel to Rio for the 2016 Olympics, the first Olympics in South America.

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