SUNS  4317 Thursday 5 November 1998



BRAZIL: TOURISM BOOM TURNS BLIND EYE TO CRISIS

Rio de Janeiro, Nov 3 (IPS/Mario Osava) -- Brazil's tourism sector is undisturbed by the financial crisis shaking the country, and is preparing to enjoy its position as the only major economic activity
expected to post significant growth amidst the stagnation in the rest of the economy.

Unlike industry, which has been dismissing workers left and right due to the contraction in demand, tourism should grow 25% this year, said Goaci Alves Guimaraes, president of the Brazilian Association of Travel Agencies (ABAV).

Brazil's gross domestic product (GDP), meanwhile, will be lucky to grow 0.7 percent, according to the latest projections by the Planning Ministry's Institute of Applied Economic Research.

And while the government expects a one percent contraction in GDP next year, in the wake of interest rate hikes and tough fiscal measures implemented in response to the fallout of the global markets crisis, ABAV is optimistically predicting growth. "There will be more people travelling," said Guimaraes, although the increase in revenues will be counteracted by the reduced cost of air travel.

Intense competition among airlines, with discounts of up to 60 percent on tickets reserved far in advance, is one of the main factors underlying the recent rise in internal tourism.

Domestic airline travel expanded by nearly 50 percent over the past four years, bolstered by the newfound stability of the real, the currency launched in 1994 as part of the programme that reined in runaway inflation and stabilised the economy.

This year the number of passengers flying domestic routes is expected to climb to 17 million, thanks to the steady drop in the cost of tickets. Several million Brazilians, tired of long bus rides on
mediocre or bad roads, are flying this year for the first time.

Furthermore, Brazil expects to receive 3.1 million foreign tourists this year, a small figure in relation to the global figure of more than 600 million - and to the country's total population of 161 million -
but a figure that is growing seven percent a year.

Brazil's tourist industry employs six million people and accounted for 5.5 percent of GDP - or 45 billion dollars - last year, according to the governmental Brazilian Tourism Company.
ABAV figures indicate that tourism will account for 7.8 percent of GDP this year - or 63 billion dollars.

The sector's sunny outlook, which stands in stark contrast to the grim prospects faced by the rest of the economy, has led prospective students to flock to universities offering tourism-  related degrees.
This year, for the first time, courses in tourism attracted the highest number of students in several Brazilian universities. Over 1,800 students registered to take the entrance exam for tourism studies at the University of Sao Paulo, the country's largest university. More than 70 students are competing for each of the 25 spaces available, with competition far stiffer than for the courses which traditionally attract the most aspirants, such as medicine and law, and those of more recent demand like journalism and publicity.

New tourism and hotel schools and courses are mushrooming around the country, in response to the new demand. The offer is expected to grow nearly 10 percent next year, with a combined total of 15,200 students.

Tourism is one of the government's top priority sectors, due to its capability of generating a large number of jobs quickly.

The leisure industry also offers a window of opportunity for northeastern Brazil, the country's poorest region, where tourism development has picked up steam over the past few years, with a high level of investment in infrastructure.

The newfound stability of the local currency, accompanied by a freer market, have also contributed to the sector's growth by attracting increasing numbers of foreign entrepreneurs and investors.

The flow of investment into the sector has not eased up despite the country's economic woes, judging by the number of hotels in construction in large cities and tourist resort areas.

Business-oriented tourism accounts for one-third of visitors from abroad, who mainly book rooms in Brazil's largest cities. Brasilia, the capital, attracts a full 70 percent of all foreign visitors on
business-related errands.