Latin America to experience above average growth rates in international tourism over the next decade
An economic outlook of 2024-2026 shows Latin American markets are middle income markets by global standards
Since returning to office in January for his second term, US President Trump’s trade war has strongly impacted currency in the Americas, particularly the Mexican peso. The currency has experienced volatility tied to tariffs, trade tensions and shifting investor confidence. John Price, Managing Director at Americas Market Intelligence, notes the peso has lost approximately 10% of its value since Trump’s first day back. While this is partially driven by the economic recession underway in Mexico, he believes three-quarters of it can be attributed to the work of the world leader.
However, despite the ongoing turbulence, Rafael Echevarne, Director General, Airports Council International, Latin America & Caribbean, explains the long-term fundamentals of the economy remains relatively stable and the impacts have not yet translated into a major disruption for the broader travel and tourism industry.
“Looking ahead, the persistent uncertainty surrounding US foreign and trade policies could pose long-term challenges. Latin America and the Caribbean are heavily reliant on US outbound tourism and policy unpredictability – whether due to visa changes, economic fluctuations or geopolitical tension – can hinder planning and investment in tourism infrastructure,” shares Echevarne. “That said, the region has proven resilient, and this uncertainty may even drive diversification strategies that promote intra-regional tourism and engagement with other international markets.”
As demographics change globally, Price says international tourism will increase at levels above gross domestic product growth rates
Alternative destinations and sector opportunities
For a closer look at the current state of Latin America, Global Travel Retail Magazine spoke with Price and Echevarne about opportunities for the travel industry in line with the return to growth of the middle class and pro-investment politics, changing traveler preferences and expected key challenges.
“As the region adopts more liberal aviation policies and encourages open skies agreements, access to air travel is expanding across socioeconomic groups,” remarks Echevarne. While the United States continues to be the primary destination for travelers from Latin America and the Caribbean, he adds it is possible the region could benefit from redirecting passenger flows from Canada and Europe, as vacationers originally planning to travel to the US choose alternative destinations.
Speaking about sector opportunities, Price highlights Brazil’s domestic tourism, inbound and outbound travel in Argentina and the rebound of the Caribbean. As a result of increased public and private investment in hotel and airport infrastructure in Brazil, as well as the corresponding drop in price of domestic travel, affluent Brazilians are exploring closer to home or traveling to Chile or Panama to avoid the steep premiums attached to the luxury brands they seek.
Describing 2025 as a “breakout year” for Argentina, Price touches on the currency appreciation currently being experienced there and how it will translate into increased outbound tourism. It is anticipated that once its currency controls are lifted several billions of dollars of hedge fund and pension fund monies will enter Argentine capital markets, which will boost the spending power of the average middle class and upper middle class citizen. Starting toward the end of this year and well into 2026 and 2027, people who have wanted to travel for a long time will finally be able to afford to. Price shares, “This move will also whet the appetite of investors to invest more in all kinds of real estate and development including tourism. It will also give the government more money after several years of austerity to invest in road building and new infrastructure that will support tourism, particularly outside of Buenos Aires.”
Along with those in South America wanting access to safe, quality beaches, it is believed that European and Canadian disdain for the United States will drive sunseekers further south to the Caribbean, more so than in the past, with travelers visiting countries such as Mexico, Dominican Republic and Jamaica. According to Price, the Caribbean has upped its game in terms of creating a more diversified offering that embodies niche travel segments including adventure and eco-tourism and cultural tourism. Case in point, foreign direct investment in tourism totalled over US$1.5 billion last year for Mexico’s Yucatán Peninsula.
It is anticipated starting toward the end of this year and well into 2026 and 2027, the lifting of Argentina’s currency controls will translate into increased outbound tourism
Changing preferences and key challenges
Latin America travel sector growth snapshots indicate regional air travel grew 12% and Latin America and Caribbean cruise visits rose 17% in 2024. As demographics change globally, Price says international tourism will increase at levels above gross domestic product growth rates. “A greater proportion of the population is reaching the ages between 50 and 75 and this is when people both have the economic means and the time to take longer periods of time to travel internationally,” he notes.
Beyond Latin America’s offering steadily increasing, there is a sense of exhaustion with the destinations that have fascinated much of the Western World for the last half-century (i.e. Western Europe, United States and Canada). People are seeking something else.
“I think COVID was instrumental in planting the idea of a bucket list in people’s minds and confronting their own mortality woke people up to the idea that they want to try something new – and Latin America would be up there on the list of that,” explains Price. “I don’t believe the same rates of growth will be sustained because part of that is a post-COVID bump, but we’ll definitely see above average growth in Latin America – and to a lesser degree in the Caribbean – over the next 10 years than we’ve seen in the past.”
The notion of building travel around personal preferences and travel themes is becoming increasingly relevant worldwide. Echevarne says, “Regional destinations in Latin America and the Caribbean remain vastly underexplored from a global tourism standpoint. We are actively working to open these destinations to direct international travel and to increase their visibility among global travelers.”
Known for its gastronomy, natural landscapes, sports-themed activations and more, what is special about Latin America is its cultural offering. There is so much to see and do. These niche travel motivations are still only being developed organically; however, the issue of safety and navigating the messaging around this topic is difficult to break through to the mindset of a traveler.
According to Echevarne, double-digit growth in the travel sector is possible but not guaranteed, especially given structural challenges such as infrastructure limitations and capacity constraints at major hubs. One of the most pressing challenges is how to manage airport and airspace capacity more efficiently.
“Another key issue is flight scheduling. Many US airlines design their flight times to align with hub-and-spoke wave patterns, making it difficult for Latin American airports to spread demand evenly throughout the day. This creates peak congestion periods that strain existing facilities and resources. To address this, the region must explore smarter slot management, invest in terminal expansions and modernize air traffic control systems.
“Collaboration between governments, airlines and airport operators will be essential to sustaining growth and improving the passenger experience. Long-term planning and investment in infrastructure – both physical and digital – will be critical to ensuring that the region can continue to grow in a sustainable way,” concludes Echevarne.
An economic outlook comparing 2024 to 2008 shows despite economic challenges, the number of mass affluent households across Latin America is growing robustly
