Overview
The Americas region improved its T&T competitiveness performance since the last edition of the report in 2017 and remains more competitive than the global average—an encouraging trend given that in over half the countries in the Americas, the T&T industry’s share of GDP is greater than the aggregate global level. The region has the third-largest T&T sector in terms of GDP, international arrivals and international tourist receipts. However, T&T in the Americas is also dominated by a handful of large economies, with the United States, Canada, Mexico and Brazil being the region’s top TTCI score performers and accounting for most of the region’s tourism industry, international arrivals—including outbound and inbound intraregional travel—and related spending. Moreover, thanks to these nations’ internal market size and T&T competitiveness, domestic expenditure accounts for a greater share of total T&T spending in the Americas than in any other region. Consequently, many regional players need to continue to improve their competitiveness to benefit from proximity to such large markets. They can, for instance, strive to lure travellers from those market’s domestic alternatives, while simultaneously diversifying their own source of arrivals and encouraging intraregional travel outside those four dominant economies.
Overall, the region is more competitive than the global average due to very strong natural and cultural resources as well as advanced T&T policy and enabling conditions, although performance in these areas is held back by below-average overall enabling environments and infrastructure. The region’s greatest advantage, however, comes from its abundance of natural resources, which include many UNESCO natural heritage sites and extensive wildlife. The Americas also scores high and continues to improve on international openness, T&T prioritization and tourist service infrastructure. These qualities help member countries take advantage of their natural and cultural assets, and indicate strong policy commitments to tourism.
Yet despite progress in these areas, the region continues to trail the global average when it comes to environmental sustainability and air and ground infrastructure. Throughout the region, improvements have been made to environmental sustainability via increased ratifications of environmental treaties. Nevertheless, habitat destruction—indicated by growing deforestation and threatened species figures—continues to endanger the region’s critical natural assets. This might explain the recent decline in performance on indicators related to natural assets.
However, the region’s biggest impediment to competitiveness comes from low marks for enabling environment, especially its business environment and safety and security. Higher taxes, red tape and inefficient legal systems have continued to worsen in many countries, potentially hindering T&T investment. Further, although regional safety and security has improved due to fewer terrorist incidents, exceptionally high homicide rates and unreliable police services persist, dissuading many potential tourists. It’s important to note that performance does vary greatly across subregion and country.
Subregion Analysis
Though the North and Central America subregion is more competitive than the South America subregion, it did experience minimal TTCI score improvement from 2017 to 2019. The subregion accounts for most of the parent region’s T&T industry, including high international arrivals and departures, thanks to the larger economies of Mexico, Canada and, especially, the United States. Overall, the subregion scores higher than both the South America and global averages on international openness, T&T prioritization, air transport and tourist service infrastructure—but lower on safety, health, ICT readiness and cultural resource indicators. In particular, improvement on indicators in the T&T Prioritization and Enabling subindex pillars have been the primary drivers of the subregion’s enhanced competitiveness. This includes slightly greater international openness, the subregion’s most significant advantage relative to the global average, and far greater price competitiveness, an area where many of its countries trail. The subregion also improved safety and security performance, the area with the largest gap compared to global averages. North and Central America’s greatest advantage over South America is its more developed infrastructure, especially air and ground transport infrastructure. Yet the region lags behind global competitors on the latter category. In addition, the subregion scores far higher in business environment than its southern neighbors; five of the six countries that outperform the global average are located in this subregion. Nevertheless, this advantage has deteriorated and does not translate to a competitive lead in global terms. Similarly, despite improvement, poor environmental sustainability remains a challenge that threatens the subregion’s natural assets.
Just over half of North and Central America’s member nations improved their competitiveness since the last edition of the report. The United States is the both the highest ranking (5th) and largest T&T economy in the entire Americas region, and benefits from a large and wealthy internal market. The Dominican Republic is the most improved country in the subregion (76th to 73rd), thanks to above-average regional and global improvement on 11 pillars. Panama had the subregion’s steepest decline (35th to 47th), with falls on nine pillars, including the region’s greatest drop on ground infrastructure (40th to 53rd) due to reduced ground transport efficiency (40th to 46th) and the inclusion of railroad data in which it ranks low (98th). The lowest-ranked country in North and Central America is Haiti (133rd), where underdevelopment and a relatively recent major earthquake has led to poor overall infrastructure (130th). The country also lacks developed natural (138th) and cultural (125th) resources, an important disadvantage in a region where many countries excel in such areas.
South America scores slightly less than the North and Central America and global averages but improved its competitiveness at a much faster rate. The subregion has the highest rating for natural resources in the world and is known for its abundant wildlife. It also has rich cultural assets, including a strong sports and entertainment tradition. Helping facilitate the flow of visitors to these and other destination points are above-average tourism service infrastructure, international openness and price competitiveness, which is the subregion’s most improved area. Given these strengths, however, South America has a relatively small T&T economy, defined by disproportionally low international tourist arrivals, which helps to explain the subregion’s dependence on domestic T&T markets. This can be due to South America’s underdeveloped air and ground transport infrastructure—which undermines accessibility—with ground infrastructure being the subregion’s greatest disadvantage relative to the global average. Moreover, South America scores lowest for business environment, deterring T&T investment, and has poor safety conditions, which is a particularly important consideration for international travellers. South America also has below-average environmental sustainability, caused primarily by deforestation, habitat loss and relatively lax environmental regulation and enforcement, potentially explaining its declining lead on natural resources. Yet the region has made strides to mitigate these drawbacks, with performance on all relevant pillars improving since the previous report. Additionally, the subregion’s lead related to openness and price competitiveness also increased.
All but three of South America’s members states covered by this report improved their competitiveness from 2017. Leading this trend is Bolivia (99th to 90th), which improved on most pillars, with particularly strong growth on price competitiveness (109th to 61st) and international openness (88th to 72nd). However, Brazil (32nd) retains both the region’s largest and most competitive T&T industry and environment, thanks to exceptional natural (2nd) and cultural (9th) resources. Venezuela experienced the world’s greatest deterioration in T&T competitiveness (104th to 117th), moving into last place in South America. This is unsurprising given the nation’s current instability and economic woes. An already poor enabling environment, including security conditions (137th), worsened further, with falls on health (80th to 86th), business (136th to 140th) and labour (116th to 127th) conditions. Additionally, T&T policy and conditions (118th to 133rd) and overall infrastructure (109th to 117th) have moved further behind the global average.
Selected Country/Economy Analysis
The United States is the top scorer in the Americas, moving up one place to rank fifth globally. The combination of the overall size of its economy and T&T competitiveness helps explain why the country has the largest T&T GDP in the world, accounting for over one-fifth of the global total. In comparison to the global average, one of the United States’ greatest advantages comes from its natural (5th) and cultural (12th) resources, which also helps separate it from many other developed nations in the rankings. The country is well known for its numerous World Heritage natural sites (3rd) and extensive wildlife (13th), which drive nature-based tourist arrivals (35th). The flow of travellers is assisted by excellent air transport (3rd) and tourist services (4th) infrastructure and increasingly efficient ground transport (17th to 6th). However, the primary reason for the United States’ improvement is its better enabling environment (25th to 16th), including enhancements to already-strong business environment (16th to 4th) and human resource and labour market (13th to 1st) areas. Combined with solid ICT readiness (18th), these factors help encourage T&T investment, utilization of digital services and business travel.
Despite improvements, the country still underperforms when it comes to safety and security (55th), especially in comparison to the performance of other advanced nations, creating potential safety concerns for visitors. Moreover, while the United States has made significant strides in the stringency and enforcement of its environmental regulations (18th to 5th) and perceptions of its T&T sustainability (25th to 4th), the country still ranks low on overall environmental sustainability (100th). The United States can improve its competitiveness and maintain its natural assets by reducing deforestation (108th) and threatened wildlife (123rd) and showing a greater commitment to environmental treaties (131st). Additionally, high visa requirements (129th) could be reduced to enhance otherwise decent international openness (37th), which, when combined with low price competitiveness (119th), can deter tourists.
Brazil is South America’s highest scoring country (ranking 32nd) and its largest T&T economy. The nation relies on its exceptional natural (2nd) and cultural (9th) resources to attract visitors, especially given its less-impressive performance on other areas of T&T competitiveness. The country has the largest number of known species in the world, fairly extensive protected nature areas (16th) and a significant endowment of UNESCO natural (7th) sites and cultural and intangible heritage UNSESCO listings (19th). Moreover, the country is a major South American economy and sporting nation, with a significant number of international association events (14th) and sports stadiums (6th). Accordingly, Brazil has developed airline route capacity (13th) that can handle large numbers of travellers. Its domestic airline capacity (6th) is especially strong, which is not surprising given that 90% of its T&T spending is domestic, the highest share in the Americas.
However, despite these strengths, Brazil has become less competitive since the 2017 edition of the report, dropping five places on the overall global ranking. The chief reason is its deterioration in the aforementioned advantages. While still impressive, a drop in natural (12th) and cultural (10th) digital demand, and in the number of association meetings, potentially indicates waning interest in Brazil’s T&T attractiveness. In part, this can be explained by the country’s worsening tourist service infrastructure (39th to 59th), price competitiveness (41st to 72nd) and already poor safety and security (106th to 124th). Safety and security, in particular, has been a major challenge for the country’s T&T industry. In addition, even with recent improvements, Brazil still has unfavorable business conditions (127th), a constrained human resource and labour market (88th) and underdeveloped ground and port infrastructure (114th), all of which are compounded by the nation’s recent economic woes. In general, to meet its full potential, the country needs to prioritize T&T (106th) and maintain its edge in natural and cultural resources, while simultaneously removing business, infrastructure and security barriers. One example of how Brazil is doing this is the country’s increased international openness (96th to 89th), stemming from reduced visa requirements (108th to 81st) and better trade integration (78th to 63rd).
Bolivia is the most improved country in the Americas region, moving up nine places to rank 90th globally. The country had the second-fastest overall growth on T&T policy and enabling conditions (115th to 101st) in the region. Particular areas of improvement include price competitiveness (109th to 61st), due to lowering ticket taxes and airport charges (135th to 121st), and international openness (88th to 72nd), which is due to a reduction in visa requirements (31st to 6th). Additionally, an expansion of protected land (36th to 11th), combined with extensive wildlife (8th), has helped enhance the country’s Natural Resources pillar (36th to 27th)—the only pillar besides Price Competitiveness that scores above the global average. However, while these improvements make Bolivia an easier, less expensive and more alluring place to visit, their impact is greatly held back by other factors. For instance, the country’s nature advantage is undermined by increasingly lax environmental regulation (131st) and enforcement (131st ). Underdeveloped overall infrastructure (105th) also makes it difficult to travel to and around the country. Minimal ICT use for business and consumer services (134th) also reduces Bolivia’s potential for T&T in an increasingly digital world. Unsurprisingly, the country scores low on natural (88th) and cultural (74th) digital demand. Similarly, the country’s unfavorable business environment (139th) and labour market (132nd) stifle foreign and domestic investment in its T&T industry. Despite any gains, the country still ranks low on safety and security (89th) and health and hygiene (95th), making potential travellers concerned about their wellbeing. To become truly competitive, Bolivia will need to leverage its natural assets while making significant gains along all TTCI pillars, especially Business Environment, and those in the Infrastructure subindex.
