A Business Trip to Hard-Hit Brazil

Although Brazil’s economy continues to reverberate with shock waves from the recent currency devaluation, local tourism officials are scheduled to depart for Sao Paulo today to encourage more Brazilians to visit Los Angeles, now a far pricier destination than it was three weeks ago.

The timing of the mission, which was scheduled last year, probably couldn’t be worse, but delegation leader George Kirkland said the group’s efforts won’t be for naught if they can lay the groundwork for future promotions once Brazil’s economy improves.

“We are not preoccupied with the economy in Brazil right now,” said Kirkland, president of the Los Angeles Convention & Visitors Bureau. “What we’re talking about doing there is going to take some time. Brazil will come back. Their economy always shows spikes.”

The next upward spike, however, may be a long time coming, economists say.

On Jan. 13, the value of the Brazilian real, the national currency, was lowered by 8% and then allowed to float on the open market. As a result, the cost to Brazilians to travel to the United States has risen about 33% as of Thursday.

News such as that is enough to keep even the most avid traveler at home. “The bigger the devaluation, the more it is a disincentive for them to travel because their money isn’t going to go as far as before,” said Ken Ackbarali, senior economist at the Los Angeles Economic Development Corp.

Even before the devaluation, foreign capital has been hemorrhaging at a rate at times of $1 billion a day, and the economic turmoil left in its wake is expected to generate 20% to 25% inflation over the next 12 months. Output is already slowing. Unemployment is likely to rise, and the nation is all but expected to slip into recession.

“I wouldn’t look for anything wonderful to happen there this year,” Ackbarali said.

Still, the five-member delegation made up mostly of tourism officials decided to press ahead with the five-day trip as scheduled.

Plans for the mission were in the works as early as January last year, Kirkland said, given Brazil’s position as a hot market for U.S. tourism. The South American giant, he said, accounted for the sixth-largest number of foreign visitors to the U.S. in 1997.

And Los Angeles was the destination of choice for 12%, or 100,000, of those tourists, nearly double the figure of five years ago.

The visitors bureau hopes to push that number up to 20% within three years, largely by focusing on Brazilians of Japanese descent. Kirkland said Brazil is second only to Japan in its population of ethnic Japanese, and about 60% of all Brazilians who travel to Japan fly through Los Angeles.

The delegation hopes to plant a seed in the minds of Japanese Brazilians to turn their Los Angeles layover into a two- or three-day stopover.

“We want to see how realistic it would be to intercept some of that traffic,” he said.

Foremost among the selling points in the group’s marketing plan, Kirkland said, is the newly opened Japanese American National Museum in Little Tokyo, which chronicles the struggles and triumphs of Japanese immigrants and their descendants in the United States.

Before returning home, the delegation will also spend two days in Buenos Aires to get a feel for the travel market in Argentina. Currently, there are no direct flights between the two cities.