Last of the big Brazilian spenders may samba right past Ireland

Thu, May 17, 2012, 01:00

JUST A few short years ago a hot topic of conversation among well-heeled Brazilians was their rough treatment at US consulates.

Ladies who lunch and successful professionals were indignant at having to pass through a costly application process during which they had to prove to rude consular officials that they intended to return home from holidays in New York and Miami rather than overstay their visas and wait tables as undocumented aliens.

But like much else since the 2008 economic crash, that has all changed. Now US president Barack Obama has thrown out a big bem-vindo welcome mat, promising to slash the amount of time it takes Brazilians to get tourist visas.

The reason for this U-turn is obvious. While developed economies such as the US lurch between stagnation and economic relapse, emerging markets such as Brazil have grown significantly in recent years. Now that they are wealthier, their citizens are on the move like never before.

According to the UN’s World Travel Organisation, expenditure on foreign travel by tourists from countries such as the US, France and Germany is growing in the low single digits at a time when it is racing ahead in places such as Russia (+21 per cent), China (+30 per cent) and India (+33 per cent).

But the hottest Bric country of them all is Brazil. Last year more Brazilians visited the US than French and spent more when there than the Germans.

Overall, their spending abroad is growing at about 40 per cent a year. Last year they spent €17 billion on their travels, buying so much that the country’s biggest airline says it has to burn more fuel on flights returning to Brazil because there is so much extra weight in the aircrafts’ holds.

President Obama is not the only one looking to get a slice of this action. Governments are scrambling to get their destinations into Brazilian travel brochures. At last month’s Travel Week in São Paulo, hundreds of foreign destinations paid €7,500 each for a few square metres of an exhibition hall in order to sell their wares to Brazilian tour operators desperate for new locations to meet ever growing demand.

The event’s organiser, Carolina Perez, says Brazilian tourists are becoming increasingly sophisticated and looking for new experiences beyond the well-beaten path to Miami, Paris and Milan.

Notably absent from the event, however, was any Irish presence. Tourism Ireland, the body responsible for promoting Irish tourism abroad, says it is a question of money. Like all State entities, its resources have been cut back at a time when it is trying to recover the two million visitors Ireland lost as a result of the global downturn.

“Tourism Ireland decided it was much more likely to recover these losses from its four main markets – the UK, US, Germany and France – so most of the resources have been put into those,” says Jim Paul, head of the body’s developing markets unit.

With most available funding directed towards low-growth or stagnant markets, there is little money left for booming ones such as China, India, the Middle East and South Africa.

Brazil is to be served by a new Portuguese-language website and limited funding to support private initiatives attempting to crack it.

At the Travel Week fair in São Paulo, there was scepticism about the likely success of such an approach.

“In Latin America you need a physical presence. They want to look you in the eye and shake your hand. If they like you, they will do business with you,” says Peter O’Neill, a tourism and education consultant in Rio de Janeiro.

Carolina Perez agrees: “You need to build relationships with the local operators, educate them in your products. Not just run an ad campaign without any follow-up.”

This approach has already paid dividends for other European countries. Like Ireland, the Czech Republic has no direct air link with Brazil. But since its national tourism organisation hired a local agent in 2007, it has seen the number of Brazilian tourists arriving there grow by almost 400 per cent, to 40,000 last year.

“It might not seem a lot compared to numbers from the US but Brazilians who go abroad are big spenders. They want to stay in a good hotel and eat in fine restaurants. In the Czech Republic, Brazilians are the top spenders along with Russians and Japanese,” says Luiz Fernando Destro, Czech Tourism’s agent in Brazil.

TOURISM IRELAND says that without the funds it has no plans to follow the Czechs and have representation in Brazil. The Czechs spend less than €40,000 a year on their Brazilian operation. That compares to Tourism Ireland’s spend of €150,000 a year on its presence in South Africa, with a return of 30,000 South African visitors to Ireland in the last year the Central Statistics Office provided numbers. The relatively small amount spent by the Czechs also contrasts with some of the investments of Ireland’s other national tourism organisation, Fáilte Ireland. Last month it awarded €192,000 in funding for Wicklow’s historic gaol as part of a programme to maintain and improve the country’s tourist attractions.

Critics of Ireland’s tourism bodies warn that the split between Tourism Ireland and Fáilte Ireland increases the risk of misallocating scarce resources and harming Ireland’s strategic tourism objectives. In February Minister for Tourism Leo Varadkar welcomed Tourism Ireland’s belated decision to target the Brazil and Russia markets, saying the new strategy could “help to make up for any vulnerable consumer sentiment in more traditional markets”.

But Tourism Ireland is unable to even put a figure on how much money is available.

Meanwhile Westport has received almost €200,000 from Fáilte Ireland since local TD Michael Ring became the Minister of State at the Department of Transport, Tourism and Sport. The money will be spent on a 2.3km walk and cycle route and on the town’s annual music festival.

The Czech Republic has invested the same amount over the last five years.

“The failure to break into the Brazilian market is part of a wider failure,” says Felim O’Rourke, an economist whose work is highly critical of the tourism bodies that promote Ireland.

“We are focusing on mature and stagnant markets like the UK and Germany, which is the equivalent of flogging dead horses. We need to be in all the Bric countries, going to events like São Paulo Travel Week and creating the networks that will deliver new tourists to Ireland.

“But Tourism Ireland is stuck in a time-warp and is part of a bureaucratic structure that is not driven by the real needs of the tourism industry.”

The risk, warns O’Rourke, is that if Ireland leaves it too late, rapidly growing markets such as Brazil’s will mature and become much more difficult to break into once its operators have established links with rival destinations.

It is all deeply frustrating for one Brazilian tourism executive at São Paulo’s Travel Week.

Christina Kler’s great-grandfather was born in Co Clare and arrived in Brazil via tsarist Russia and she is still proud of her Irish roots.

“I would love to sell Ireland in Brazil, but there is no Irish tourism presence here,” says the business development executive at São Paulo luxury operator Designer Tours.

“It is incredible not a single Irish entity is at a show like this in the country of the moment for the global tourism industry. I have never seen so many suppliers from all over the world selling in Brazil. Even Montenegro and Serbia are here – so why not Ireland?”