20172017© 2018 U.S. Travel Association. All Rights Reserved.

BRAZILINTERNATIONAL VIS ITATIONS TO THE U.S . FROM

INTERNATIONAL INBOUND TRAVEL MARKET PROFILE

U.S. Travel Association • Brazil 2

4% 1.5

2.0

2.5

3.0

3.5

4.0

3%

2%

1%

0%

-1%

-2%

-3%

-4%

-5%

Real

GDP

, Bra

zil (

% C

hang

e)

Brazilian Real per U.S. Dollar

2013 2014 2015 2016 20182017

2015 2016

TRAVEL IMPACT: VISITATIONFollowing 11 years of consecutive growth, Brazilian visitations to the U.S. rose from 349,000 in 2003 to 2.3 million in 2014. In 2003, Brazil was the ninth-largest overseas inbound travel market to the United States. By 2014, Brazil was the third largest, behind only the U.K. and Japan.

Brazil’s economic and political crisis, which started in mid-2014 and ended in 2016—coupled with a severe depreciation of the Brazilian real versus the U.S. dollar—had a strong effect on travel to the United States in 2015 and 2016. Visitation declined by 1.6 percent in 2015 and by a staggering 22.6 percent in 2016.

A slow process of recovery began in 2017, and growth in visitations from Brazil to the U.S. likewise turned positive. Visitations from Brazil grew by 10.8 percent and numbered 1.9 million in 2017, higher than in 2012 and earlier years, but still below the level in 2013, 2014 and 2015. Brazil’s rank as a top overseas inbound market to the U.S. fell to sixth place in 2016 (it was the third largest in 2014), and despite relatively strong recovery growth in 2017, its rank did not improve. The U.S. Department of Commerce currently estimates that visitations from Brazil to the U.S. increased 8 percent in 2018. Actual 2018 visitation data are scheduled to be released in June 2019.

The 2017 recovery in Brazilian visitation to the U.S. took place in the second half of the year. By November and December of 2017, Brazilian monthly visits to the U.S. finally surpassed their levels in 2015.

BRAZIL

MACRO OVERVIEW AND ITS IMPACT ON TRAVELWith a $2.1 trillion economy and a population of 209 million, Brazil ranks eighth (in GDP) and fifth (in population) globally. In 2015 and 2016, Brazil suffered the most severe recession in over a century, with GDP cumulatively falling more than 7 percent. Between 2014 and 2017, the Brazilian real depreciated 26 percent against the U.S. dollar.

After recovering by 0.4 percent in 2017, the Brazilian economy is expected to grow by 1.6 percent in 2018 and to gradually accelerate in future years. But the economy is not projected to fully recover to pre-recession levels until 2024, due in part to the still-unstable political situation.

Following 13 years in office, Brazilian President Dilma Rousseff of the leftist Worker Party was impeached and removed from office in 2016. In late 2018, far-right candidate Jair Bolsonaro was elected President of Brazil. Given his limited experience in governance and economics, the state of the economic recovery remains unclear.

BRAZIL MARKET SUMMARY, 2017

U.S. Visitations from Brazil 1.9 Million

Travel Spending $7.1 Billion

Average Spending Per Visitor $5,713

Total U.S. Travel Exports $11.5 Billion

U.S. Travel Trade Balance $10.8 Billion

INBOUND TRAVEL MARKET PROFILE (2017)

SUMMARYIn 2017, 1.9 million travelers from Brazil visited the United States. As the sixth-largest overseas inbound market, visitors from Brazil comprised 4.9 percent of overseas travel to the U.S.

Accounting for 18 percent of total U.S. exports of goods and services to Brazil, travel is the top U.S. industry export to Brazil. Travel generated a $10.8 billion trade surplus with Brazil in 2017, more than any other industry.

2.5

1.5

2.0

1.0

0.5

0

20%

0%

10%15%

5%

-10%-5%

-20%-15%

-25%2013 2014 2015 2016 2017

2.1 MILLIO

N

2.3 MILLIO

N

2.2 MILLIO

N

1.7 MILLIO

N

1.9 M

ILLION

Percent Change

Visit

atio

n (m

illio

ns)

Brazilian Visitation to the U.S., 2013–2017

Brazil GDP and Currency, 2013–2018

VWP MemberFree Trade Agreement

Global Entry Pre-Clearance Open Skies

X X X X YES

300

250

200

150

100

50

0Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2015 2016 2017

2017

20152016

Brazilian Visitation to the U.S., 2015–2017(in thousands)

Source: U.S. Department of Commerce

Source: U.S. Department of Commerce

Source: Oxford Economics

U.S. Travel Association • Brazil 3

TRAVEL IMPACT: ECONOMICTravel exports to Brazil totaled $11.5 billion in 2017. Brazil ranks fifth out of all overseas markets in total U.S. travel exports. Travel is the largest industry export to Brazil, accounting for 18 percent of all U.S. exports of goods and services to the country. Average spending per Brazilian visitor to the U.S. was $5,713 in 2017, among the highest of all international visitors.

With travel exports to Brazil valued at $11.5 billion and travel imports (i.e., spending by U.S. travelers in Brazil) valued at $723 million, travel generated a $10.8 billion trade surplus with Brazil in 2017, more than any other industry.

For more about the contribution of visitations from Brazil to America’s trade balance, see Addendum A, Page 4.

BRAZIL INBOUND TRAVEL MARKET PROFILE (2017)

MAJOR TRAVELER CHARACTERISTICSIn 2017, 56 percent of Brazilian travelers in the U.S. visited Florida and 23 percent visited New York. Top cities visited included Orlando (35% of Brazilian visitation), Miami (29%) and New York City (23%)

• The average Brazilian traveler spends 10 nights visiting the U.S.

• Main purpose of visiting the United States: vacation (74%), visiting friends/relatives (10%), business (6%).

• Top activities in the U.S.: Shopping, Sightseeing, Amusement/Theme Parks, National Parks, Art Gallery/Museums

For more Traveler Characteristics see Addendum B, Page 5.

THE COMPETITIONAlthough Brazil fell in ranking as a top U.S. inbound market, the United States remains—by far—the most sought-out outbound travel destination for Brazilians. Of all outbound travel from Brazil in 2017, 19 percent was destined to the United States. The U.S. similarly commands a 26 percent market share (MSI) of all long-haul trips (outside of Latin America and the Caribbean) departing from Brazil.

While the United States’ share of Brazilian international travel remains high, it has been declining in recent years. In 2015, the U.S. share of outbound travel from Brazil was 23 percent, compared to 19 percent in 2017. Even during the recovery in 2017, the U.S. continued to lose market share. While Brazilian travel to the U.S. grew by 11 percent, this pace was eclipsed by Brazilian travel to Spain (+27%), France (+25%), Germany (+23%) and Italy (+17%). Overall, Brazilian travel to all long-haul destinations grew by 17 percent in 2017.

Brazilian visitations to the U.S. have been recently growing again, due to the ongoing economic recovery in the country, but long-haul outbound travel from Brazil to all countries has been growing much faster. Competition from other markets is therefore becoming a significant risk to sustaining the impressive share the U.S. commands in outbound travel from Brazil. With the recovery expected to continue, the U.S. has an opportunity to further boost the interest of Brazilian travelers by simplifying visa requirements and starting the process of Brazil’s potential inclusion in the Visa Waiver Program.

56% Visited Florida

74% on Vacation

10 NIGHTS Average Visit

CHARACTERISTICS AT GLANCE

Source: Tourism Economics and U.S. Department of Commerce (for U.S. arrivals)

TOP U.S. EXPORTS TO BRAZIL, 2017

INDUSTRYU.S. EXPORTS

IN BILLIONS ($)SHARE TOTAL EXPORTS OF GOODS

AND SERVICES

Travel 11.5 18.1%

Chemicals 8.3 13.1%

Transportation Equipment 7.6 12.0%

Petroleum and Coal 6.7 10.5%

Computers and Electronics 4.4 6.9%

Source: U.S. Department of Commerce

TOP BRAZILIAN OUTBOUND DESTINATIONS AND SHARE OF OUTBOUND TRAVEL,2015 AND 2017

DESTINATIONSHARE OF TOTAL

OUTBOUND TRAVEL, 2015

SHARE OF TOTAL OUTBOUND

TRAVEL, 2017

PERCENTAGE POINT

CHANGE

VISITATION, 2017 (IN MILLIONS)

1 United States 22.6% 19.0% 3.6% 1.9

2 France 10.8% 10.0% 0.8% 1.0

3 Argentina 9.8% 9.1% 0.7% 0.9

4 Portugal 5.4% 6.1% 0.7% 0.6

5 Italy 4.7% 5.7% 1.0% 0.6

Total Outbound 100% 10.1

Source: U.S. Department of Commerce

U.S. Travel Association • Brazil 4

BRAZIL

TRAVEL FROM BRAZIL TO THE U.S. IS “MADE IN AMERICA”

CALCULATING THE TRAVEL TRADE BALANCE WITH BRAZIL

Spending by Brazilians in the U.S. produced $11.5 billion in export income for the U.S. economy

Although Brazilians are physically on U.S. soil when they visit the United States, the goods and services they consume while in America are U.S. exports. In 2017, U.S. travel exports to Brazil totaled $11.5 billion, which included travel spending by Brazilian visitors to the U.S. ($7.1 billion), education and health-related expenses by Brazilians in the U.S. ($550 million combined), and international passenger fares by Brazilians flying on U.S. airlines ($3.8 billion).

Travel generated a $10.8 billion trade surplus in 2017After taking into account U.S. resident spending in Brazil ($723 million), the U.S. had a $10.8 billion travel trade surplus with Brazil. Without this surplus, the U.S. trade surplus with Brazil ($28.5 billion) would have been only $17.7 billion, or 38 percent smaller. Of all industries in which the U.S. trades with Brazil, travel, by far, generated the largest trade surplus.

Travel is the largest industry export to Brazil, and accounted for 18 percent of all U.S. exports to Brazil in 2017

Travel was, by far, the largest industry export to Brazil in 2017, significantly ahead of chemicals, which accounted for 13 percent of U.S. exports of goods and services.

Spending by Brazilian visitors constitutes a U.S. travel export while spending by U.S. residents in Brazil constitutes a U.S. travel import.

1

2

3

Travel

Petroleum and Coal

Chemicals

Transportation Equiment

Computers and Electronics

20 4 6 8 10 12

$10.8B

$6.2B

$5.7B

$4.2B

$4.2B

Top 5 Industries by U.S. Trade Surplus with Brazil, 2017

Since travel exports are greater than travel imports, the U.S. enjoys a strong travel surplus with Brazil.

Visitor spending = export income for destination Travel experiences, which are “purchased” = exported services to source market

ADDENDUM (A)

Travel

Transportation Equipment

Chemicals

Petroleum and Coal

Computers and Electronics

20 4 6 8 10 12

$11.5B

$8.3B

$7.6B

$6.7B

$4.4B

Top 5 U.S. Exports to Brazil, 2017

TRAVEL SPENDING

$7.1B

PASSENGER FARES

$3.8B

OTHER

$0.1B, 1%EDUCATION RELATED

$0.5B, 4%

62%

33%

Breakdown of U.S. Travel Exports to Brazil, 2017

Total U.S. Travel Exports to Brazil = $11.5 Billion

Visitor spending = export income for destination

Travel experiences, which are “purchased” =exported services to source market

U.S. Travel Exports:

$11.5 billionU.S. Travel Imports:

$0.7 billion

=

Source: U.S. Department of Commerce

Source: U.S. Department of Commerce

Source: U.S. Department of Commerce

$10.8 Billion Travel Trade Surplus with Brazil

U.S. Travel Association • Brazil 5

BRAZIL ADDENDUM (B)

PLANNING/BOOKING BEHAVIORS+ 2017 2016

Pre-paid package 11% 12%

Average trip decision time in days 109 104

Average travel party size 1.9 1.8

Length of stay (median nights) 10 10

First trip to U.S. 19% 17%

DEMOGRAPHICS+ 2017 2016

Average age 41.1 40.1

Average annual household income $64,565 $73,544

DETERRENTS TO VISITING THE U.S.^ 2017

Too expensive 47%

Unfavorable currency exchange rate 43%

Uncomfortable with national politics 20%

Concerns about my personal safety 14%

I don’t have enough holiday time 14%

PRIMARY TRIP PURPOSE+ 2017 2016

Vacation/Holiday 74% 70%

Business 6% 8%

Visit Friends/Relatives 10% 12%

Convention/Trade Show 5% 6%

SHOPPING

SIGHTSEEING

HOTELS/LODGING

RESTAURANTS/DINING

TRAVEL CHARACTERISTICS AND DEMOGRAPHICS

Destination Cultural/ Historical Attractions

Local LifestyleShopping Dining/Gastronomy Urban Attractions/Nightlife

TOP MOTIVATIONS FOR INTERNATIONAL TRAVEL*

ACTIVITY PARTICIPATION+ 2017 2016

Shopping 89% 88%

Sightseeing 77% 75%

Amusement/Theme Parks 49% 45%

National Parks/Monuments 33% 33%

Art Gallery/Museum 27% 30%

Historical Locations 24% 25%

Experience Fine Dining 22% 22%

Nightclubbing/Dancing 12% 18%

38% use social media to plan trip^

#USA

DIVERSE

SOPHISTICATED

DOWN-TO-EARTH

ENERGETIC

CREATIVE51% say the U.S. is a

top desired destination^

IMPRESSIONS OF THE U.S.*

MOST INFLUENTIAL CONTENT WHEN DECIDING ON DESTINATION^

#TRAVEL

Source: *Brand USA, + National Travel and Tourism Office, ^ Destination Analysts, 2018