Santa Catarina, Brazil – Enormous Potential

Courtesy of the World Travel & Tourism Council.  The full report is available from WTTC at www.WTTC.org 

The importance of Travel & Tourism to Santa Catarina’s economy is indisputable, yet much of the destination’s potential remains largely untapped.  The state’s unparalleled diversity in terms of landscapes, cultures and people is little known outside Latin America – and Perhaps even Brazil.

Primarily known for its beach resorts – a number of which rank among the best in the world – Santa Catarina is blessed with a wealth of other attractions that could prove just as appealing, if not more so, to potential visitors. Most importantly, further development and promotion of new markets and segments could help extend the season and spread the benefits of tourism across the state.

Key to the future of Santa Catarina is how well the state government manages and aligns state resources to enhance the quality of life of all its citizens. It needs to provide education for Catarinenses, advance economic prosperity, create innovative opportunities, and maintain a safe and healthy environment. And Travel & Tourism can help the government and its public sector partners achieve these goals, as well as creating the underlying conditions necessary for a thriving tourism industry.

Clearly, there are a number of challenges to address if Travel & Tourism is to reach its enormous potential as a catalyst for future economic and social development across the whole of the state. Considerable care must also be taken to ensure that growth is sustainable – that it achieves a healthy balance between business imperatives, the protection of cultural heritage and environment, and the well-being of local communities.

Future Prospects

While the baseline forecasts for Santa Catarina are generally positive, they highlight a few weaknesses that could hinder Travel & Tourism growth unless they are addressed by the government and other stakeholders.

Tourism in Santa Catarina is highly concentrated in space and time. The coastal resorts attract the bulk of visitors and there is a marked peak during the summer season. Excessive unplanned growth would risk creating even greater imbalances, resulting in undue pressure on coastal and urban environments and their respective transport systems. Carefully planned growth, on the other hand, can help ensure that all local communities share in the benefits, stimulating rural economic development and energising small businesses.

Few countries, let alone individual states, offer such a variety of opportunities for cultural tourism, as well as outdoor recreation and nature-based tourism. The government should prioritise tourism products and market segments, in terms of both development and promotion, to tap the opportunities offered by the state’s natural and cultural resources – including hiking, trekking, mountaineering, canoeing, and other sporting and ecotourism activities.

Travel & Tourism accounts for a significant share of Santa Catarina’s total employment (12%). However, the relatively modest growth in jobs forecast over the next ten years (3% per annum) means the available workforce is unlikely to be able to keep up with expected Travel & Tourism demand. Unemployment in the country is currently at around 9% but, if this improves, the shortage of labour for tourism and hospitality could be exacerbated by the poor image of the industry in terms of wages. This can probably only be resolved by developing more sophisticated tourism products.

Travel & Tourism industry taxation is extremely high in Brazil, in Santa Catarina as in other states. Coupled with rigid labour laws, this could have a negative impact on investment, so care must be taken by government to offer adequate incentives by way of compensation.

In addition, government expenditures to provide individual and collective Travel & Tourism services to visitors, travel companies and the community at large are low (less than 2% of total government expenditures). These need to be increased if Santa Catarina’s Travel & Tourism is to maintain its competitive edge.

There are also signs that Santa Catarina’s Travel & Tourism could be losing ground. This is in large part attributable to a perceived decline in spending in real terms on marketing. A sustained promotional campaign is critical, not only to enhance the destination’s image in traditional and emerging source markets, but also to raise awareness of Travel & Tourism’s significant contribution to state and local economies and the spin-off benefits to all stakeholders.

Over the past 20 years or more, tourism development and marketing in Santa Catarina appear to have been driven largely by the needs of the state’s mainly budget to midscale domestic market. And neighbouring Argentines, Uruguayans and other South Americans have also sought the same tourism products: lots of basic accommodation for lounging on beaches. This means there has been little need for investment in upscale tourism products and services, or value-added attractions which would seem expensive to the average tourist. This will inevitably change if Santa Catarina decides to focus more on longer-haul, higher-yield international sources. But the returns on investment could well prove justified in the longer term.

In a rapidly changing world, destinations need to ensure more than ever that they are on top of changes in demand that could negatively influence future growth potential. Yet monitoring and measurement of Travel & Tourism trends in Santa Catarina are currently perceived as being very weak. Efforts should be taken to improve the reliability of statistics to help support timely development and investment decisions.untapped potential.