December 6, 2023
Despite the dollar's rise, Brazilians resume international travel

Despite the dollar’s rise, Brazilians resume international travel

Even with a higher level dollarIn recent months, Brazilians have been resuming travel abroad. Since April, spending in other countries has accelerated, following advances in COVID-19 vaccination around the world.

Central Bank data show that in September, total spending abroad amounted to 473.6 million US dollars, an increase of 57.08% over the same month last year.

The value is well below US$1.33 billion in September 2019, when the pandemic was not yet present, but it does indicate a recovery after a more serious period of isolation.

The resumption of travel is largely justified Vaccination progress, making families feel safe while traveling.

Meanwhile, according to economist Claudia Yoshinaga, coordinator of the Center for Financial Studies at the Getulio Vargas Foundation (FGV), several families formed a reserve in the past year, as they stopped traveling. Now, with countries reopening, it is normal for texts to resume.

We polled more than 800 Brazilians about their financial situation. Families with high monthly incomes, above ten minimum wages, have reduced their expenditures in the pandemic. They kept their jobs and saved because they traveled less. It is now possible that they are in the mood to travel, to de-stress
Claudia Yoshinaga, Professor at FGV

Leisure Tourism

British Columbia figures show that since April, spending in other countries on personal travel, which includes tourism, health and education, has exceeded what was seen a year ago, in the first phase of the pandemic.

Expenses for Brazilians for personal trips abroad:

  • March 2020: 447 million US dollars; March 2021: 231.2 million US dollars
  • April 2020: 150 million US dollars; April 2021: 222.5 million US dollars
  • may be 2020: 149.6 million US dollars; may be 2021: 246.1 million US dollars
  • June 2020: 177.7 million US dollars; June 2021: 330.4 million US dollars
  • July 2020: 198.4 million US dollars; July 2021: 333.2 million US dollars
  • August 2020: 200.3 million US dollars; August 2021: 329.6 million US dollars
  • September 2020September: $224 million 2021: 348.7 million US dollars

The dollar is not helping

International travel is increasing despite the appreciation of the dollar. In September, tourism dollars were trading at 5.61 Brazilian reals – a peak recorded on the 30th of that month. Before the pandemic, on February 28, 2020, US currency was sold to tourists for 4,637 Brazilian reals.

In practical terms, this means that spending abroad is about 20% more expensive now than it was before the pandemic.

Professor David Callas, of Insper, recalls that the decision to travel abroad depends on the exchange rate, but also on the level of household income. In many cases, the flights are now taking place because they have already been contracted.

People had airline tickets that were canceled due to the pandemic. Now they are being rescheduled. Those who manage to keep their jobs also end up saving and can spend at this time, despite the dollar
David Callas, Professor at Insper

Return to the United States

Leonardo Souza, Manuela Gusmao and their son Matthews: Back to the United States - Press Release - Press Release

Leonardo Souza, Manuela Gusmao and their son Matthews: Back to the United States

Image: disclosure

Banker Leonardo Prazeres de Souza, of Juiz de Fora (MG), took advantage of the credits of airlines and hotels canceled in 2020, during the most dangerous phase of the pandemic, to travel abroad in May this year.

He, his wife and son spent 15 days on vacation in Cancun, Mexico and another 15 days in the United States, splitting between New York and Orlando. According to Sousa, it was necessary to travel so that the credits would not be lost. The problem was with the exchange rate.

The dollar was expensive. Can you imagine having coffee for two dollars? 11 BRL in the cafe. When US currency was cheaper, I did more things. I went to exhibitions and museums. This time, I preferred free attractions and open tours
Leonardo Prazeres de Sousa, banker

Executives are back abroad

Travel is resumed not only among vacationing families, but also in the corporate environment. The BC numbers show that the movement also accelerated from April:

Expenses of Brazilians on business trips abroad:

  • March 2020March: $165 million 2021: 81.7 million US dollars
  • April 2020: 53.2 million US dollars; April 2021: 78.4 million US dollars
  • may be 2020: 50.1 million dollars may 2021: 87.5 million US dollars
  • June 2020June: 61.5 million dollars 2021: 118.4 million US dollars
  • July 2020July: $68.6 million 2021: 118.8 million US dollars
  • August 2020August: 69.3 million dollars 2021: 117.5 million US dollars
  • September 2020: 77.5 million US dollars; September 2021: 124.9 million US dollars

Performance is still far from what was seen before the pandemic, in 2019. In September of that year, for example, Brazilian business travel expenditures totaled US$364.4 million.

But for Professor David Callas, the numbers suggest that in the post-pandemic era, not all business transactions will continue to be conducted by videoconferencing.

“The previous paradigm has been broken: this technology will not work in the business world. We realized that it was enough. Many of the flights that have been made will not be anymore,” says the professor. “But part of the trips will be back, given the importance of ‘face-to-face’.” There are times when physical presence is necessary.”