Britain is eyeing Latin Americaʼs untapped ‘realms of goldʼ for trade and investment after Brexit, so business travel to the continent is only set to increase, writes Sasha Wood
“We have neglected Latin America’s realms of gold for too long – Brexit can change that,” said Boris Johnson when he visited the continent as the UK’s foreign secretary seeking closer ties with the Pacific Alliance – a group of free-trading countries that includes Chile, Peru, Argentina and Mexico.
Beyond Europe, Latin America is arguably the best natural fit for the UK in terms of trade and investment, with shared socio-economic and political values, not to mention historical and cultural ties.
Under its Mercosur trade bloc, Latin America does more business with Europe as a whole than with its geographical neighbours to the north. Europe is also the region’s biggest investor, and there is plenty of room for the UK to improve its share of trade. France, Spain and Germany all export far more to Chile than the UK, for instance, which makes up just 0.8% of the country’s imports.
This is despite the fact that the region is full of anglophiles – and the feeling is mutual. The British are the second biggest consumers of Argentine and Chilean wine in the world, for example. There is a definite appetite for deeper economic links.
Headway has been made lately – London double deckers are being shipped to Santiago, for instance, and the UK helped Lima lay on the Pan-American Games last year. And as the Prime Minister pointed out recently, few people realise that “thanks to mining interests the UK is the second largest global investor in Peru”.
Brazil is by far the largest economy in South America, and the seventh largest in the world with a GDP of $2.3 trillion. The state of Sao Paulo is South America’s economic epicentre, and has a bigger economy than the whole of Argentina. Its port, Santos, is the main gateway for imports from Europe. And 400 of the world's 500 largest companies operate in Brazil including well-known British firms Rolls Royce, Shell, BP, JCB and Experian.
Shell is now the largest foreign company operating in Brazil following its takeover of BG Group, and together with BP it has been awarded contracts for $2billion in exports in the last few years. For obvious reasons, the country has been identified as an important trading partner as the UK leaves the EU.
Despite Brazil’s status as Latin America’s powerhouse, Chile’s economy is actually the region’s most prosperous. Its capital city, Santiago, is considered the safest city in South America – despite recent unrest – and business blossoms in an efficiently run state with low levels of corruption.
Another industrial superpower, Mexico, has a bigger GDP than Brazil, and a stronger economy than any of the world's major emerging markets. The country’s manufacturing sector is huge, producing more than 60% of Latin America’s exports. Under NAFTA, British companies can take advantage of low-cost production and direct access to US markets. The World Bank ranks it as the easiest country in Latin America to do business with.
The number of business travellers visiting the region slowed last year as the continent’s big players, Brazil and Argentina, suffered economic uncertainty, but a rapid recovery is expected in 2020, with Oxford Economics predicting 2.6% growth.
The proliferation of hotels across the region means rates for overnight stays have remained relatively steady, though Lima and Santiago are comparatively costly cities for a trip. Rio de Janeiro has a plentiful supply of hotel rooms including 10,000 extra rooms that were added ahead of the 2016 Summer Olympics, according to AMEX GBT, while hotel rates increased more than 20% in Argentine capital Buenos Aires last year as the country’s currency plummeted against the US dollar.
Due to recovering demand, regional air fares are set to jump 3% this year, according to BCD Travel’s 2020 forecast. But transtlantic fares should be unchanged.
With Britain shopping for new trading partners and deals post-Brexit, business travel to the continent is only set to soar.
AEROMEXICO: Operates daily direct flights between the Mexican capital, Mexico City, and London Heathrow.
AIR EUROPA: Has daily direct flights from its hub in Madrid to Buenos Aires, Sao Paulo and Lima, among other cities.
BRITISH AIRWAYS: Has daily direct flights from London Heathrow to Argentine capital Buenos Aires and the Brazilian cities of Rio de Janeiro and Sao Paulo. It also flies daily to Peruvian capital Lima (summer only) and five days per week to Mexico City and Chilean capital Santiago from Heathrow.
IBERIA: Flies non-stop from its Madrid hub to Lima and Santiago 10 times per week, with double daily flights to Mexico City and daily flights to Rio de Janeiro and Sao Paulo.
KLM: Serves Buenos Aires, Lima, Mexico City, Rio de Janeiro and Sao Paulo with direct daily flights from Amsterdam Schiphol airport.
LATAM: Flies direct daily from London Heathrow to Sao Paulo. It also flies from Paris CDG, Frankfurt and Madrid to Sao Paulo, as well as from Madrid to Lima and Santiago.
NORWEGIAN: Flies to Buenos Aires daily and to Rio de Janeiro four times per week from Gatwick.
TAP PORTUGAL: Double-daily flights from its hub in Lisbon to Sao Paulo and it also flies daily to Rio de Janeiro.
VIRGIN ATLANTIC: Direct daily flights to Sao Paulo from London Heathrow begin in March 2020.
Flight information provided by Cirium
(Published January 2020)