ASUTIL 2017 Price Difference Expectations Vs Actual Price Difference


Brazilians travelling through Chile, Paraguay and Uruguay. Siñeriz Group’s Rafael Parodi


confirmed this to TRBusiness during the show, stating that despite the political and economic turbulence in Brazil, travellers are returning to Uruguay. This has also been made easier by


the introduction of a new facility at its Rivera store that combines border immigration processing for visitors to the store from Brazil and those transiting through Uruguay. “Sineriz’s operation is stronger


than in the past,” he told TRBusiness, emphasising that the travel retailer’s aim is not on increasing its store footprint, but instead focusing on providing excellent customer service and amenities.


“Siñeriz’s operation is stronger than in the past.”


Rafael Parodi,


Commercial Department, Siñeriz Group


Above: Research reveals stark differences in regional price perceptions. Source m1nd-set


the value chain is tighter; there is a new framework that we have to work on. In this framework, the interaction among parts of the value chain is key.” Addressing Brazil directly in a


presentation, a region that covers 48% of the region’s land mass and accounts for 53% of its population, Fagundes highlighted the ongoing challenge of drawing tourists to the country. “We have a big challenge in the


region to bring tourists to Brazil; the tourist balance means they export much more value in the tourism area


than they import.” According to Brazil Central Bank


figures, Brazilian spending abroad totalled $14.5bn in 2016 – outpacing foreign purchases in Brazil at $6bn. Brazilians, it was revealed, have spent on average three times more when travelling abroad than visitors in the country over the past five years. Fagundes noted that ‘stable’


levels of expenditure among foreigners in the country represents a huge opportunity to generate future volume.


‘Tourism has to develop’ No more evidence is needed of the economic boost given to the country than during its 2014 Fifa World Cup and 2016 Olympic Games, which benefited from BRL26bn ($7.9bn) and BRL40bn ($12.2bn) worth of investment, respectively. Fagundes said: “South America


is responsible for 2-3% of the total tourism in the world, which is too low, we have to develop; we are much more secure than other parts of the world.” On the other hand, domestic


travel continues to soar, with 17m passengers travelling in 2016 compared to 22m international travellers; a meagre rise on 2012’s figure of 19m, Fagudes pointed out. He also said that intra-transiting


Siñeriz Group is seeing a steady uplift in visitors to its Rivera store.


26 TRBUSINESS


traffic within the region is becoming more important – notably from


Spend per pax drive More broadly for Fagundes, exchange rate mechanisms continue to pose challenges to purchase and the result is added pressures on improving spend per pax (SPP). “Our main objective is to generate


more spend per pax in local currency,” he said. “The big issue when you talk about


profitability is the majority of costs – not just in Brazil but across the entire region – are in local currencies. “The game is not just about hard


currency; we have to make sure we understand how when we translate to local currency, we are generating enough margin to overcome the fixed costs usually based on local currency.” Fagundes warned that consumer


confidence remains a challenge, with the region facing a customer ‘who is not willing to buy’, which has also been exacerbated by consecutive falls in Brazil’s Retail Index. However, the steady privatisation


of airports following the restructuring of state-run authority Infraero is a positive sign of the times ahead. The country’s top 10 airports are


responsible for 98% of international traffic and 55% of domestic traffic, said Fagundes. Earlier this year, Vinci Airports


took Salvador, Zurich Airport won the concession bid for Florianópolis and Fraport picked up Porto Alegre and Fortaleza.


JULY 2017


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