Latin America’s New Voice in Global Tourism

In addition to the natural, cultural and culinary treasures hidden in Latin America and the Caribbean, tourism represents an important source of wealth creation and has the potential to become one of the great drivers of growth, development, innovation and environmental sustainability. In addition, being a cross-cutting sector (involving transport, hospitality, catering, culture, gastronomy, leisure and nature, among others), it can also become a spearhead to help the region lead the global fight against climate change and the preservation of biodiversity.

The importance of the industry in the region’s economy is indisputable: In 2019, it accounted for 42% of total Caribbean and 10% of Latin American exports; the tourism economy, which includes all sectors around service to travelers, accounted for 26% of GDP in the Caribbean and 10% in Latin America; and creation 35% of jobs in the Caribbean and 10% in Latin America, with more than a 40% share of women.

The magnitude of these data explains the strong impact of the pandemic, which triggered the worst crisis in the history of international tourism. In 2020, the industry contracted by 73%, leading to revenue losses of over USD 900 billion. Countries such as Honduras, the Dominican Republic, Colombia and El Salvador are still recovering, and reached—between January and September 2022—tourist arrivals numbers above pre-pandemic levels. Most Caribbean and South American countries, however, are still below 2019 levels.

Nonetheless, the socioeconomic shock caused by the pandemic also brought about new opportunities for tourism in Latin America and the Caribbean: Travelers are looking for increasingly local and authentic experiences and are willing to pay more for sustainable destinations (from adventure and nature-based tourism, ecotourism and agro-tourism to culinary and cultural tourism). This reality has the potential to benefit in particular the countries of the region, due to the extraordinary richness of their natural heritage.

In this scenario, while advanced economies are taking reactive tourism-promotion measures to mitigate the effects of climate change, Latin America and the Caribbean—which has contributed little to greenhouse gas emissions and is especially vulnerable to the ravages of natural disasters caused by extreme weather events—has the opportunity to promote sustainable and regenerative tourism. This type of tourism, in addition to avoiding negative impact on the environment, leads to restoring and improving its natural and cultural heritage and, thus, improves the well-being of citizens. 

Global trends such as “Slow Tourism,” for instance, which advocate close, local tourism with low environmental impact, have a good breeding ground in the region, as they help develop the business and commercial fabric in large cities and small communities alike, help develop new—cultural and natural—tourist routes, and new culinary circuits.

This new reality represents an unparalleled opportunity for Latin America and the Caribbean to understand their tourist destinations not only as creators of wealth, but as articulators of socioeconomic and productive development that positively impacts the environment and helps mitigate and adapt to climate change.

To promote this agenda and ensure that the voice of the region has a global echo, CAF—development bank of Latin America—will present at FITUR 2023 its new work proposal to promote a living and regenerative tourism model that helps mitigate the effects of climate change, preserve biodiversity, enhance cultural heritage and revive economies. The proposal is part of our commitment to invest USD 25 billion in green financing over the next five years and to become the green bank of Latin America and the Caribbean.

In this connection, our tourism agenda aims to improve the well-being of rural communities, indigenous peoples and Afro-descendants; to protect and restore biodiversity and enhance ecosystem services; to reduce vulnerability to natural disasters resulting from climate change with more resilient infrastructure, and monitoring and prediction systems; to improve government planning processes; to enhance the circular economy; and to create new spaces to enhance creative and cultural economies, such as museums, galleries, theaters or creative districts.

In the coming decades, Latin America and the Caribbean must leverage its great natural potential to become a global benchmark for regenerative tourism, which would help drive economic growth, create high-quality jobs, strengthen the business fabric and the creation of social revenues, especially in local communities.