Uncertainty in the Americas

Charlotte Turner

Charlotte Turner

By Charlotte Turner, managing editor, TRBusiness magazine

No one can discount the impact of the slowdown in Brazilian traffic and spend on retailers in the Americas, but it is clear from TRBusiness’ evaluation of the marketplace that travel retailers in South America are suffering more than the U.S. and Canada.

Retailers and market analysts have told TRBusiness that what makes this situation very tricky to navigate is uncertainty. As top Uruguay customs and tax lawyer Carlos Loaiza Keel and Siñeriz Free Shop Director Gandhi Abdullah told TRBusiness recently, no one knows when the situation in Brazil [coupled with various damaging currency devaluations] is going to significantly improve.

Without this knowledge, travelers are prevaricating their purchases until Brazil’s economy can stabilize, and it seems that the borders have been most adversely affected at this point.

However, news agency Reuters recently reported that the Brazilian real outperformed weaker Latin American currencies in early March — something that has not been uncommon over the last few months, as Brazilian markets appear to rally whenever chances of a change in government seem to grow.

Strong traffic growth to the US

Regardless of a potential return to fortune for Brazil, many airports in the Americas are actually enjoying strong international traffic. We have been reading much about the strength of traffic to U.S. airports, but it’s not just North America that is benefiting from a traffic boost.

Uruguay has seen record tourist arrivals to its airports in the last few years, and Paraguay’s Silvio Pettirossi Airport is about to embark on a major modernization project, which is sure to benefit travel retailers such as Mannah Duty Free.

Canada is also enjoying some record DF&TR growth, especially at the border, where operators are taking advantage of the strong U.S. dollar.

Still, many are understandably cautious at the moment, and an outbreak of the Zika virus spreading through the Americas threatens to dampen spirits.

However, TRBusiness is comforted by ACI Director General Angela Gittens’ industry outlook, which benefits from a global viewpoint.

“You’ve had the health scares, you’ve had terrorism, but the traffic is still up over 6 percent. All this stuff kind of balances out. It may be a different mix, but it’s still the strong plus-6 percent.

“What we see is that traffic has been so resilient through all these things, so I’ve got to say 2016 will be as good as 2015. It’ll be a different mix of good and bad, but I think the overall result will be similar.”

Although it is too early to say with any certainty if 2016 (full year) will be a better year than 2015, Gittens believes that another 6 percent growth in global air traffic is definitely feasible.

See TRBusiness magazine for a keynote interview with Angela Gittens.