Ferreira e wada corporate mobility in latin america

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Ferreira e wada corporate mobility in latin america

  1. 1. CORPORATE MOBILITY IN LATIN AMERICA01-iniciais.indd 1 14/09/11 20:05
  2. 2. 01-iniciais.indd 2 14/09/11 20:05
  3. 3. RICARDO SOUTO FERREIRA & ELIZABETH KYOKO WADA (EDITORS) CORPORATE MOBILITY IN LATIN AMERICA A GUIDE TO HAVING A BEST-IN-CLASS TRAVEL PROGRAM IN THE REGION TRANSLATION BUSINESS TRANSLATION SERVICES01-iniciais.indd 3 14/09/11 20:05
  4. 4. Copyright © Ricardo Souto Ferreira e Elizabeth Kyoko Wada, 2011 Copyright © Editora Aleph, 2011 COVER: Luiza Franco PROOFREADING: Business Translation Services DESIGN: Neide Siqueira LAYOUT: Join Bureau PUBLISHER: Adriano Fromer Piazzi No part of this book may be reproduced in any form without permission from the publisher except for the quotation of brief passages in reviews. EDITORA ALEPH Rua Dr. Luiz Migliano, 1110 – Cj. 301 05711-900 – São Paulo – SP – Brasil Tel.: [55 11] 3743-3202 Fax: [55 11] 3743-3263 www.editoraaleph.com.br Dados Internacionais de Catalogação na Publicação (CIP) (Câmara Brasileira do Livro, SP, Brasil) Corporate Mobility in Latin America : a guide to having a best-in-class travel program in the region / Ricardo Souto Ferreira & Elizabeth Kyoko Wada (editors.) ; translation Business Translation Services. – São Paulo : Aleph, 2011. ISBN 978-85-7657-121-6 1. América Latina – Descrição e viagens 2. Turismo 3. Viagens corporativas – Administração 4. Viagens corporativas – Guias 5. Turismo de negócios I. Ferreira, Ricardo Souto. II. Wada, Elizabeth Kyoko. 11-10012 CDD-338.479198 Índices para catálogo sistemático: 1. América Latina : Descrição e viagens : Viagens corporativas : Turismo : Economia 338.47919801-iniciais.indd 4 14/09/11 20:05
  5. 5. Contents Some thoughts about the region ............................................................................................ 7 Presentation ........................................................................................................................ 9 About the authors ................................................................................................................... 13 Corporate Mobility in Latin America ..................................................................................... 17 Chapter 1 – Mexico ................................................................................................................. 23 Chapter 2 – Central America and the Caribbean Region ..................................................... 39 Chapter 3 – Andean Countries............................................................................................... 59 Chapter 4 – Southern Cone ................................................................................................... 81 Chapter 5 – Brazil ................................................................................................................... 119 Final considerations and the starting point for new reflections... ........................................ 131 References ........................................................................................................................ 13501-iniciais.indd 5 14/09/11 20:05
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  7. 7. Some thoughts about the region Dear reader, Latin America, from Mexico to Argentina and including the Caribbean, is a mas- sive region! And with size comes enormous contrasts. Latin America is an emerging and significant region for HRG. Brazil is the regions’ largest country and the most important market. Rio de Janeiro is home to many corporate headquarters; Sao Paulo, the economic capital and Brasilia, the seat of government, are cosmopolitan cities with sophisticated infrastructures. Mexico and Argentina are also very important markets and home to many regional multinational companies. Strategically, Latin America enhances the HRG Worldwide Network by meeting the fundamental needs of our customer base in relation to their corporate programs: • Identifying critical travel program business needs • Aligning local, regional and global program components • Evaluating regional needs for products and services • Aligning local and regional reporting • Aligning operational issues • Applying change management to optimize savings and reduce costs With a regional network of 15 markets, we are well-positioned to support multi- national, regional and local companies in their consolidation and globalization ef- forts. Due to the need to increase the knowledge about Latin America, we are proud to01-iniciais.indd 7 14/09/11 20:05
  8. 8. 8 CORPORATE MOBILITY IN LATIN AMERICA fully support this book and all the initiatives to promote a better understanding of this wealthy region, and the wonderful people who are ready to welcome you, your execu- tives and your business! In each chapter, you will find contributions from our execu- tives, as we truly believe in sharing knowledge for a better market place. Best regards, Peter Vargas HRG Senior Vice President, Latin America and Affiliates01-iniciais.indd 8 14/09/11 20:05
  9. 9. Presentation Dear Travel Management Professional, Many years ago I came across a publication that highlighted the complexities of doing business in Asia, country by country. It was not a book on Corporate Travel in Asia, but the concept grabbed me: why not put together, in one book, some relevant facts about the Management of Corporate Travel Programs in Latin America? More than twenty countries, large and small, different languages, dialects, currencies, tax systems, GDS content... Seven years passed. Good ideas – or the ideas we Love – don’t just go away. Some- where deep in our brains they are being kept on a back burner, improved, and refined, just waiting for the right moment! Countries are so different from each other. Does it make sense to bundle them all under one umbrella called LATAM? Of course it does, as the world becomes increasingly organized into diverse, yet geographically organized regions; Europe, Asia, and so on. The HRG Network in the region is the inspiration for this publication, a major source of support, the “virtual entity” that allows this book transform itself into a broader Editorial Project, leaving the domain of good ideas to become something real and material. We are present in twenty countries and we meet on a regular basis. De- veloping this publication sounded as our collective contribution to the business com- munity we serve. I don’t think interest in the region has ever been so great. As traditional key mar- kets send confusing economic signals year after year, as the search for natural resources01-iniciais.indd 9 14/09/11 20:05
  10. 10. 10 CORPORATE MOBILITY IN LATIN AMERICA become essential, and as certain countries around the region reach solid, stable levels, the region naturally becomes a relevant global player. And naturally, the attention of the world turns increasingly towards us. From a mere 5-6 % of global spend on regular managed travel programs, our importance goes beyond our current size. A few months ago, I was invited by ACTE to speak at a Webinar called “Region on the Rise: Latin American Business Travel”. To my surprise, more than two hundred professionals were present. More importantly, these delegates were not from the type of companies we traditionally deal with, the so-called FORTUNE companies, but from new, unknown companies; start-up businesses, from all parts of the globe. This book is aimed at the thousand of corporate travel professionals who are so often asked: “How can we put together a corporate travel program in the Latam region? How can we ensure it is successful? How do we avoid wasting resources? Where are the key lessons to be learned?” Yes, large corporations will benefit most, but new start-up businesses, small companies that are turning their attention to the region, will also benefit. Needless to say, our community – the vast community of corporate travel professionals – will also benefit tremendously! Not only is the World now looking at us in a different way; we ourselves have started looking at our neighbors and compañeros in a whole different way. We have become increasingly aware of each other and our uniqueness. In the Corporate Di- mension, particularly in Brazil, Argentina and Mexico, large companies become truly multinational, global companies, naturally starting with their neighboring countries. The HRG Network has made this effort a relevant one. Our strength, our passion, and our knowledge of the region are vast, and we want to share it with as many colleagues as possible. Instituto Alatur, the non-profit arm of Grupo Alatur – HRG Network member for Brazil – provided the resources that enabled this Project to take off. Instituto Alatur is deeply committed to projects like this one, providing accurate, relevant information on each of the countries in the region, from a Corporate Travel perspective. But be warned! The editorial text you are now reading is just the tip of the iceberg. • This book is only the first step; we are committed to updating it, and improving its scope and relevance, on an annual basis. • Global news is spreading at a rapidly increasing rate. Nowadays, a year is now too long to wait for updated information. We will therefore be launching a website very soon www.corporatetravelinlatam.com, bringing fresh information all the time. • A Newsletter will be sent out, informing subscribers of updates to the website: key research, facts, figures, etc. Lots of information on the region, country by01-iniciais.indd 10 14/09/11 20:05
  11. 11. PRESENTATION 11 country, at your fingertips whenever you need inspiration, quick references and so on. Easy ways to get in touch contact with insiders. Another key benefit of this publication is the opportunity to join a community of friends and experts in our region, and cooperate by submitted your ideas. The collec- tive wisdom is far greater than ours; we see our role merely as that of facilitator. I hope you will find the information contained in this publication useful! As we revise our Project, so many new ideas and wonderful suggestions come to mind! We look forward to receiving yours! Best regards, Ricardo Souto Ferreira Executive Vice President – Grupo ALATUR HRG Brazil – HRG Worldwide Network Board Member/LATAM01-iniciais.indd 11 14/09/11 20:05
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  13. 13. about the authors Peter Vargas currently oversees the Latin America Network of HRG (Hogg Robinson Group), one of the world’s premier corporate travel management and international corporate services companies. As Senior Vice President and Regional Manager, he is responsible for the growth and management of the HRG Partner Management Net- work in Latin America. The growth of the network in the region is enabling HRG to respond to corporate customers’ needs and consolidate multinationals regionally. Var- gas’ has extensive experience in Latin America, having worked in various positions over the last twenty years, including Regional Development Manager for Thomas Cook Group, Director at Sabre, and Director of Business Development and Account Manage- ment at WorldTravel BTI. A graduate of the City University of New York, where he earned a Bachelor’s Degree in International Affairs, Vargas also holds a Master’s Degree from New York’s New School for Social Research. peter.vargas@hrgworldwide.com Ricardo Souto Ferreira is partner and Executive Vice President of the Grupo Alatur (HRG Brazil) and HRG Worldwide Network Board Member/LATAM. A graduate of the Fundação Getúlio Vargas in São Paulo, where he earned a Bachelor’s Degree and a Master’s Degree in Administration, Ferreira also has a BA in Communication from ESPM. His executive education includes the Executive Development Program at the Wharton School of the University of Pennsylvania. Prior to his current position, Fer- reira has an executive career spanning thirty years, in companies such as Editora Abril, American Express, Belair, Sheraton, Othon Hotels and VASP. Ferreira is an active mem- ber of several associations, and is an MPI board member, always working hard to put the Latin American Region on the worldwide map. ricardo.ferreira@alatur.com01-iniciais.indd 13 14/09/11 20:05
  14. 14. Elizabeth Kyoko Wada leads the research group Hospitality and Services in Organiza- tions that investigates Corporate Mobility in Latin America and oversees the undergrad- uate programs in Tourism and Hospitality and the postgraduate programs (Masters of Science and Doctorates) of Universidade Anhembi Morumbi, in São Paulo, Brazil, one of the Laureate International Universities. Prior to her current responsibilities, Wada has held executive positions in the lodging industry for 25 years, in companies such as Bour- bon, Sheraton and Meliá, living in Foz do Iguaçu, Rio de Janeiro, São Paulo, Santiago (Chile) and Mexico City. A graduate of the Centro Universitário Iberoamericano, where she earned a Bachelor’s Degree in Tourism, Wada also holds a specialization degree in Marketing (EAESP/FGV), and Master and Doctorate’s degrees in Communication (USP). She serves as president of the MPI Brazil Chapter and of the National Association of Research and Post graduation in Tourism (ANPTUR). ekwada@anhembi.br Victor Hernández Rodríguez is based in Mexico and has a thorough knowledge of all HRG products. He has designed and delivered specific sales plans for clients that in- corporate key functional areas such as acquisition, account implementation, client management, customer service and technology. Hernández acts as HRG Account Man- ager for a large market segment and he has achieved and exceeded trade volume targets for 2005-2006 cycles, as well as helping corporations to obtain important travel ex- pense budget reductions of 10% to 25%, which resulted in the contract renewal for 2007 of his complete portfolio. Ana Paula Yamashita worked as a consultant at Hospitalidade Consultoria in the ar- eas of employee motivation, customer care and hospital & restaurant implementation projects. She currently teaches the disciplines of Financial and Economics, and is a researcher of Hospitality and Services in Organizations, at the Universidade Anhembi Morumbi, in São Paulo, Brazil, investigating Corporate Mobility in Latin America. A graduate of the Universidade Mackenzie, where she earned a Bachelor’s Degree in Economic Sciences, Yamashita also holds specialization degrees in Hotel Management and Financial Accounting Administration, both from FAAP, and a Master’s Degree in Hospitality from Universidade Anhembi Morumbi. Yamashita is the co-author of the book Gestão Financeira para Meios de Hospedagem. apy27@hotmail.com Andréa do Prado Zago is a graduate of the Centro Universitario Newton Paiva, in Belo Horizonte, Brazil, where she earned a Bachelor’s Degree in Tourism. Zago is a re- searcher of Hospitality and Services in Organizations at the Universidade Anhembi Morumbi, in São Paulo, Brazil, investigating Corporate Mobility in Latin America. She received a full scholarship from CAPES to gain her Master’s Degree in Hospital- ity. apradozago@gmail.com Jacqueline Hernandez-Biascoechea is the Commercial Director and partner of Rutas Aereas in Costa Rica - HRG Costa Rica and International Meetings and Conventions01-iniciais.indd 14 14/09/11 20:05
  15. 15. Panama, and also HRG Panama. At a early age, in 1990 she founded International Meetings and Conventions in Puerto Rico, the first full-service Incentive House agency in the Caribbean, and eleven years ago, she expanded the business to Costa Rica and lately to Panama. She is responsible for the growth of companies and strategic regional clients in the Central America and Caribbean Region, and also for the regional service center in Costa Rica that handles regional Central America and Caribbean clientele. Hernandez-Biascoechea brings more than 20 years experience in the consulting arena for travel management and MICE in the Central America and Caribbean markets. Her executive and continued education includes Harvard Kennedy School of Government - Strategic Frameworks for Non-profit organizations; Graduate School of Business, Stanford University, Palo Alto, CA among others. She is recognized as one of the Top ten Business Leaders and Business Women in Puerto Rico. jhernandez@imcb.com Ricardo de Gil Torres teaches the discipline of Business Administration in the Hospi- tality Industry and is a researcher of Hospitality and Services in Organizations at the Universidade Anhembi Morumbi, in São Paulo, Brazil, investigating Corporate Mobil- ity in Latin America. He earned a Doctorate Degree in Business Administration from Fundação Getulio Vargas (São Paulo – BR) and a B.S. in Chemical Engineering from Universidade Federal Rural do Rio de Janeiro (BR). Prior to joining the academic life, Torres held managerial positions in Brazilian chemical industries and ran his own information brokerage consultancy. Torres’ main fields of interest and research include innovation in the hospitality industry and restaurant operations. rgtorres@anhembi- morumbi.edu.br Josiane Tonelotto currently oversees all the subjects related to the academic activities of Universidade Anhembi Morumbi. As Pro-Rector of Academic Affairs, she is respon- sible for the development, quality control, relationship with the assessment entities and specially the proper education process in more than 100 programs, provided to more than 30,000 students by 800 faculty members. Tonelotto is a researcher of Hos- pitality and Services in Organizations, investigating Corporate Mobility in Latin Amer- ica. She earned a Bachelor’s Degree in Psychology from Universidade São Francisco. Tonelotto also holds Master and Doctorate’s Degrees in Medical Sciences from UNICAMP. jotonelotto@anhembi.br Monica Moreira currently acts as HRG Peru Manager, Avantix Group Vice President and APAAI Director (Peruvian Association of IATA Travel Agents). With thirty years of experience in the travel business, Moreira started at Avianca Airlines, then worked in Travel Agencies and Travel Management Companies. Moreira is a graduate of Univer- sity Piura in Peru, where she earned a Bachelor’s Degree in Commercial Direction. She also has a specialization degree in Marketing (Esan) and took the Program on Internet Commerce (AOTS, Japan). monica.moreira@pe.hrgworldwide.com01-iniciais.indd 15 14/09/11 20:05
  16. 16. Cláudio José Stefanini teaches the discipline of Business Administration and is a re- searcher of Hospitality and Services in Organizations, at the Universidade Anhembi Morumbi in São Paulo, Brazil, investigating Corporate Mobility in Latin America. Ste- fanini earned a Bachelor’s degree in Business Administration from the Faculdade Dom Pedro II; he also holds a postgraduate degree in Strategic Business Management and a Master’s Degree in Business Administration. claudio.stefanini@hotmail.com Mario Andrés Aguirre Maldonado currently acts as Business Manager for Turavión (HRG Chile). Prior to this position, Maldonado held several positions in LAN and was responsible for the implementation of non-air products in the sales offices; the call center, and Lan.com in LAN Peru, among other services. He earned a Bachelor’s Degree in Industrial Engineering and a postgraduate degree in Chemical Engineering from Pontificia Universidad Católica de Chile. maguirre@turavion.com Mercedes Del Castillo joined HRG in December 2004, as Regional Account Manager and was promoted to Corporate Sales Manager a year later. Over the last five years, she has been successfully winning and implementing new accounts, and has also led her Business Manager’s team to retain existing clients. Del Castillo graduated from Busi- ness Administration School at Universidad Católica Argentina (UCA) and, to enhance her competence in marketing, obtained a Higher Degree in Direct and Interactive Mar- keting in 2005 at Universidad de San Andres (UdeSA). Prior to working for HRG, she worked in the areas of Finance and Sales, at Warner Bros. Consumer Products. mer- cedes.delcastillo@ar.hrgworldwide.com Roseane Barcellos Marques Sousa teaches Economics and is a researcher of Hospital- ity and Services in Organizations, at the Universidade Anhembi Morumbi in São Paulo, Brazil, investigating Corporate Mobility in Latin America. She earned a Bache- lor’s Degree in Economic Sciences from the Universidade Anhembi Morumbi and a Master’s Degree in Political Economics from the Pontifícia Universidade Católica de São Paulo. Sousa acts as a consultant for ventures in the areas of Tourism and Hospital- ity for Hospitals. roseanebmarques@yahoo.com.br Alessandra Mokarzel Passos currently acts as Alatur (HRG Brazil) head of Account Management. Prior to this position, Passos was the Operational Supervisor for McKinsey & Company, in another TMC. She has a Bachelor’s Degree in Tourism form the Univer- sidade de São Paulo and a MBA Degree in Marketing from Universidade Mackenzie.01-iniciais.indd 16 14/09/11 20:05
  17. 17. Corporate Mobility and Latin America Elizabeth Kyoko Wada Ricardo Souto Ferreira The book is intended as a starting point for discussing corporate mobility, as well as presenting some of the practices in Latin American countries. It is part of a set of actions aimed at disseminating good Business Travel practices, and it will come alive and be made dynamic through the website www.corporatetravelinlatam.com. The concept of mobility is, in principle, very simple; it denotes the idea of coming and going, together with the necessary means and resources for such actions to occur. The applications, however, involve diverse interpretations. Scholars of social sciences and geography have addressed the topic, treating it as human mobility, with three forms or lines of analysis: physical mobility, social mobil- ity and work-based mobility. We stress that Human Mobility is composed of three forms of mobility: physical mo- bility, work-based mobility and social mobility. We also emphasize that this concept was developed in light of Marxism, where social and economic development are im- portant. In a synopsis of this concept, we should understand that Physical Mobility uses, for its analysis, the quantification of ebbs and/or flows of population fractions, or that of demographic quantity. These studies are included in various spatial groups (rural-ur- ban, interurban, interregional or even international or foreign), and can be subdi- vided according to the timescale in micro-mobility (for pendular movements) and macro-mobility (for movements of longer duration).01-iniciais.indd 17 14/09/11 20:05
  18. 18. 18 CORPORATE MOBILITY IN LATIN AMERICA The second form of mobility is Social Mobility and it refers to a vertical movement of individuals in the classification of social classes. The task of analyzing, interpreting and comprehending the changes that occur in the population is therefore applied, in view of the position occupied in this structure. The third branch of these studies refers to Work-Based Mobility: the main cause that leads men to fan out in/to practice dispersion in the geographical space. This is the form of mobility that conveys the formalization of the previous forms: physical and social mobility. This commoditization of mankind should be seen as a natural fact, as each individual is endowed with “labor-power”, seen as a commodity in the posses- sion of the worker that is capable of producing other commodities to serve the inter- ests of the capitalist. (ROCHA, GUIZZO et al., p. 4) Another application found is urban mobility, currently associated with sustain- ability and with issues of quality of life in the big cities. Studies focusing on urbaniza- tion, transport systems and modes, carbon emission reduction and alternative means of transport are recurring topics in academic surveys and market research. The term “mobility” is also used to designate aspects of logistics, such as the inte- grated use of different modes of transport, fleet management, leasing of aircraft and means of land transport, among others. The expression “corporate mobility” is encountered as a reference to the manage- ment of mobile communication equipment – cellular phones, smart phones, modems and Wi-Fi contracts. On a smaller scale, the word appears in the expression “academic mobility” in reference to the movement of academics and teachers between different institutions. Whatever the approach, mobility takes into account the movements of individu- als and the “TRENDS” (tradition, relationship, expectation, needs, desire and solu- tion) that lead to their occurrence. To this effect, organizations that have adopted the expression “corporate mobil- ity” lend all the knowledge acquired through the deliberate or forced movements of groups and individuals. The armed forces and the church have valuable records and vast experience of secular practices in the movement of fighting forces and peacekeep- ing troops, missionaries, humanitarian aid, monitoring of trade missions, representa- tives and prisoners, i.e. a wide range of situations described throughout history and portrayed in documents, in literature and in the arts. Since 2007, the ACTE – Association of Corporate Travel Executives – an entity with headquarters in the United States, has repeatedly raised the topic of “Corporate Mobil- ity” in its meetings both in the USA and in Europe. It is clear that the European market,01-iniciais.indd 18 14/09/11 20:05
  19. 19. CORPORATE MOBILITY AND LATIN AMERICA 19 given the diversity of cultures and legislation, was faster to adopt the concept, and there are companies that have already established corporate mobility policies and designated managers to ensure their performance. Runzheimer International, with head offices in the United States, states in a study conducted in 2007: Corporate mobility is the strategic management approach to removing geography as a barrier to growth and success. Employee mobility approaches within the typical or- ganization appear in three to six different areas supporting two key business objec- tives: enhancing talent management capabilities and/or enabling revenue growth. Travel by plane, train or automobile and the use of technology tools while outside of the office (e.g., PDAs, notebooks, tablet PCs) enable employees to be in the place where they can deliver the highest value. Relocation, international assignment, and virtual office programs (e.g., telecommuting) expand the geographic talent pool and enhance an organization’s abilities to fill job vacancies and develop and retain talent. (HARPER, RUNZHEIMER, 2007, p. 2) In the same study, the authors warn against fragmentation in corporate mobility management: Who “Owns” Mobility and What Are The Implications? Joe, a vice president of mobility, works for a national insurance carrier, and either di- rectly or indirectly, is responsible for all employee mobility programs. At Joe’s com- pany, a comprehensive employee mobility strategy is a key driver of success. All departments involved in employee mobility program administration fall under one umbrella and a consistent and systematic approach is taken in designing plans that address all aspects of employee mobility. The example set by Joe’s company is unique. Most organizations assign employee mobility ownership to several different departments and process owners, resulting in fragmented management and sub optimized processes. In contrast, the employee mobility management approach at a consumer products manufacturing company is quite different. The company’s fleet and travel manager report to the vice president of finance; the corporate aviation director reports to the vice president of operations; while international assignments and domestic relocation groups fall under the vice president of human resources.01-iniciais.indd 19 14/09/11 20:05
  20. 20. 20 CORPORATE MOBILITY IN LATIN AMERICA Fragmented employee mobility management often leads to inefficiencies and unnec- essary costs in processes ranging from employee communication, vendor manage- ment, expense management, audit and compliance, to change processing and asset tracking. […] The last thing we want mobility programs to do is generate confusion, aggrava- tion, frustration and disengagement, but this is often inevitable with a fragmented management approach. […] CEOs seeking new opportunities for cost savings, revenue generating capabilities, and greater organizational agility must look at how their mobility programs are man- aged. Leading organizations that have taken the first steps are making significant gains. (HARPER, RUNZHEIMER, 2007, p. 4) These considerations require us to reconsider travel management in organiza- tions, in terms of both coverage and functionality. In cities like Buenos Aires, São Paulo or Rio de Janeiro, with airports further away from the centers, savings on air tickets, for example, can be diluted due to expenses on local transport or costs of In- ternet access at hotels and by local telecommunications carriers. Moreover, globaliza- tion has led to a need for travel and contact with destinations like Latin America, with diversified countries, legislation, uses and customs that often differ from the visitor’s countries of origin. Likewise, with the increasing number of Latin Americans moving in and out of the region, needs arise that go far beyond simply reducing certain ex- penses through block bookings with airlines, hotels, and other services in the produc- tive chain of Business Tourism. Does this require an expansion of the duties of the Travel Manager? The strength- ening of Procurement teams? Where is the integration point of Meeting Managers who constantly deal with customers and opinion leaders, which cannot always be catego- rized in the company’s policies? Which are the rules for incentive travel as a reward for satisfactory performance? In the case of the construction industry, which are the rules and arrangements for transporting, accommodating and maintaining several hundred workers hired for the reconstruction of roads in areas of conflicts or natural disasters? How is it possible to find out and deal with the different demands of travelers, some of whom are more experienced, while others may have rarely ventured beyond their own immediate area? As in other management processes, after the consolidation of data, establishment of policies and respective compliance rules, assessement of negotiation and of saving, there is a perceptible increase of complexity in operations that are no longer restricted01-iniciais.indd 20 14/09/11 20:05
  21. 21. CORPORATE MOBILITY AND LATIN AMERICA 21 to the trip itself, with new opportunities for improvement, such as the adoption of a more comprehensive concept of corporate mobility. As regards the region covered in this book – Latin America – which exists due to cultural ties and includes countries of the three Americas, has become politically, so- cially and economically stabilized at different paces, representing a “mystery” to pro- fessionals from other regions, and for those that deal with intra-Latin American affairs. In this book, specific chapters are dedicated to Mexico and Brazil, given the dimen- sions of their businesses and the high volumes of travel to these countries; the other countries are grouped together under the sections “Central America and the Carib- bean”, “Andean Countries” and “Southern Cone”. Two different teams were formed to work on the content of this book: HRG ex- ecutives based in various countries around the region, contributing market data gath- ered internally and from professional bodies and associations; researchers from Universidade Anhembi Morumbi, in São Paulo, Brazil, and members of the research group “Hospitality and Services in Organizations”, who prepare the contextualization of each country. The styles of each group of authors were respected, which explains the differences between chapters.01-iniciais.indd 21 14/09/11 20:05
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  23. 23. 1 MEXICO Ana Paula Yamashita Víctor Hernández Rodríguez INTRODUCTION The evolution of transport modes favors greater human mobility, particularly the airline industry that has broken distance barriers, facilitating a greater flow of tourism in the world. Such development involving both the supply and the demand of tourism products requires constant upgrading throughout their production chain. Data from the United Nations World Tourism Organization (UNWTO)i, in the first few months of 2011, showed that international tourist arrivals had grown about 5%, consolidating the 7% rebound registered in 2010. According to the April update, of the UNWTO barometer, growth was positive in all world (sub) regions during January and February 2011, with the exception of the Middle East and North Africa. South America and South Asia led growth (both at 15%), followed by Sub-Saharan Africa (13%) and Cen- tral and Eastern Europe (12%). (UNWTO, 2011a) Economies are becoming increasingly open to relations with other countries, hence it is possible to affirm that globalizationiiwould not be possible without air transport and that the airline industry would be much less significant without con- comitant global expansion. [...] The basic principle that governs air transport con- sists of bilateral convention based on reciprocity or equivalency according to the agreements covering fares, capacity, frequency, number of carriers and routes flown. (GRAHAM, 2010) Business traveliii can be conceptualized as a set of practices and processes related to the articulation of the global economy, but also to culture, behavior, status and even02-cap01.indd 23 14/09/11 10:35
  24. 24. 24 CORPORATE MOBILITY IN LATIN AMERICA leisure mobilities (BEAVERSTOCK et al, 2011, p.3). Such a statement leads to the need to know the individual from the future relationship better, especially when dealing with international travel. While technology encourages remote and virtual interac- tions, face-to-faceiv contact remains essential and crucial in the organizational strategy and should continue to be important in 2015. (BEAVERSTOCK and FAULCON- BRIDGE, 2010, p. 57 and 79). As soon as companies realized that business travel needed to have its expenditures controlled, since at many companies these can represent the third highest expenditure, after salaries and data processing (information technology), the need for travel man- agement arose. Managed business travel can be understood as the method whereby companies practice guidance and discipline over transport, accommodation, meals and associated expenses incurred by their employees. The corporate travel manage- ment company came into existence to satisfy such a demand for service in the market, and can be defined as the teamwork involved at a company to exert adequate and ef- fective control over travel and entertainment expenses. (LANG, 1994) According to Langv (1994, p.74) for most travel managers, conducting their own negotiation becomes an exhilarating and rewarding part of the process. Yet the greater challenge to deriving meaningful savings from a negotiation effort is maximizing use of airline seats, hotel rooms and rental cars that they have contracted for. The Mexican Tourism Board (SECTUR) understands Business Tourism as a set of tourist flows, where the purpose of the trip is linked to the performance of professional activities, by means of business meetings, and of different purposes and magnitudes. It can be divided into individual business tourism, which involves business travel in- herent to the tourist’s activity, where they move from one city or country to another in order to pursue activities related to their occupation. On the other hand, group tour- ism involves events such as: Conferences, Conventions, Incentives and Exhibitions. (SECTUR, 2011a) According to the publication of SECTUR Bulletin 11, President Calderón decreed 2011 as the year of tourism in Mexico. Aiming to align all the related sectors in this activity to set actions in motion that allow more tourists to make Mexico their main travel destination. […] Mexico intends to rank among the five countries of greatest importance in tourism and entrepreneurs are already recognizing this potential and committing themselves to combine efforts to leverage this activity. (SECTUR, 2011b) GENERAL DATA Mexico has significant political, geographical, economic and social participation when we analyze the region of Latin America and the Caribbean. Thus Table 1 was02-cap01.indd 24 14/09/11 10:35
  25. 25. MÉXICO 25 prepared with a selection of data to better present the facts and figures that identify this country’s characteristics. However, Figure 1 is presented initially and enables a view of the country and its borders. Figure 1 Map of Mexico Source: CIA, 2011 Table 1 Data on Mexico Dimension Country Data Location North America, bordered by Caribbean Sea and the Gulf of Mexico, between Belize and the United States, and by the North Pacific Ocean, between Guatemala and the United States Country name Mexico Government type Federal Republic Chief of state Felipe de Jesus Calderon Hinojosa (since 1 December 2006); Note – the president is both the chief of state and head of government Capital: Mexico City Languages Spanish and indigenous languages: Mayan, Nahuatl and others regional languages Currency Mexican Peso Area 1,964,375 sq km Population 113,724,226 (July 2011 est.). World ranking:11 Major cities – population Mexico City (capital) 19.319 million; Guadalajara 4.338 million; Monterrey 3.838 million; Puebla 2.278 million; Tijuana 1.629 million (2009)02-cap01.indd 25 14/09/11 10:35
  26. 26. 26 CORPORATE MOBILITY IN LATIN AMERICA Dimension Country Data Urbanization Urban people: 78% of total population (2010) – Note: Mexico City (19.319 million) is the second-largest urban agglomeration in the Western Hemisphere, after Sao Paulo (Brazil) Life expectancy at birth 76.47 years. World ranking: 72 Literacy 86,1% Climate Varies from tropical to desert Costline 9,330 km Natural hazards Tsunamis along the Pacific coast, volcanoes and destructive earthquakes in the center and south, and hurricanes on the Pacific, Gulf of Mexico, and Caribbean coasts. Volcanic activity: Mexico has volcanic activity in the central-southern part of the country; the volcanoes in Baja California are mostly dormant; Colima (elev. 3,850m), which erupted in 2010, is Mexico’s most active volcano and is responsible for causing periodic evacuations of nearby villagers; it has been deemed a “Decade Volcano” by the Interna- tional Association of Volcanology Chemistry of the Earth’s Interior, worthy of study due to its explosive history and close proximity to human populations; Popocatepetl (elev. 5,426 m) poses a threat to Mexico City; other historically active volcanoes include Barcena. Ceboruco, El Chichon, Michoacan-Guanajuato, Pico de Orizaba, San Martin, Socorro and Tacana. Natural resources Petroleum, silver, copper, gold, lead, zinc, natural gas, timber. Geography – note Strategic location on the southern border of the USA; corn (maize), one of the world’s major grain crops, is thought to have originated in Mexico. GDP (purchasing $ 1.567 trillion (2010 est.). World ranking: 12. power parity) GDP – real growth rate: 5,5% (2010 est.). World ranking: 61. GDP – per capita1 (PPP): $ 13,900 (2010 est.). World ranking: 85. GDP – Breakdown by Agriculture: 4.2% / industry: 33.3% / services: 62.5% (2010 est.). sector: Unemployment rate: 5.6% (2010 est.). World ranking:55 underemployment may be as high as 25% Population below 18.2% – note: based on food-based definition of poverty. (2008) poverty line2: 1. This entry shows GDP on a purchasing power parity basis divided by population as of 1 July for the same year. (CIA, 2011) 2. National estimates of the percentage of the population falling bellow the poverty line are based on surveys of sub-groups, with the results weighted by the number of people in each group. Definitions of poverty vary considerably among nations. For example, rich nations generally use more generous standards of poverty than poor nations. (CIA, 2011)02-cap01.indd 26 14/09/11 10:35
  27. 27. MÉXICO 27 Dimension Country Data Distribution of family 48.2 (2008). World ranking: 27. income – Gini index3: Inflation rate (consumer 4,1% of GDP (2010 est.). World ranking: 120. prices): Exchange rates: Mexican pesos (MXN) per US dolar: 12.687 (2010) – 13.514 (2009) Telephone system General assessment: adequate telephone service for business and government; quality is improving and mobile cellular availabitilty is increasing. Broadcast media: Large number of television stations and more than 1,400 radio stations, most of which are privately owned; the Televisa group once had a Continuation of virtual monopoly over TV broadcasting, but new broadcasting groups Broadcast media and foreign satellite and cable companies are now operating in the country (2007). Internet users 31.02 million (2009) – World ranking: 12 Airports: 1,819 (2010) – World ranking:3 Total with paved runways: 250 and unpaved runways: 1,569. Railways: 17,166 km – World ranking: 16. Roadways: 366,095 km – World ranking: 17. Waterways: 2,900 km (navigable rivers and canals mostly connected with ports on the country’s east coast) (2010) – World ranking: 33. Ports and terminals: Altamira, Coatzacoalcos, Lazaro Cardenas, Manzanillo, Salina, Veracruz. Disputes – international: Abundant rainfall in recent years along much of México-US border region has ameliorated periodically strained water-sharing arrangements; the US has intensified security measures to monitor and control legal and illegal personnel, transport and commodities across its border with Mexico; Mexico has to deal with thousands of impoverished Guatemalans and other Central Americans who cross the porous border looking for work in Mexico and the United States; Belize and Mexico are working to solve minor border demarcation discrepancies arising from inaccuracies in the 1898 border treaty. Source: CIA/USA, 2011. Mexico was ruled by Spain for three centuries until it gained its independence at the beginning of the 19th century. The devaluation of the peso in 1994 led the economy 3. This index measures the degree of inequality in the distrib ution of family income in a country. […]. (CIA,2011)02-cap01.indd 27 14/09/11 10:35
  28. 28. 28 CORPORATE MOBILITY IN LATIN AMERICA into the worst recession in more than half a century. This was followed by the global crisis of 2008 that brought more problems to the country’s economy and there is also the drug trafficking issue, where a strong organization of drug dealers has been provok- ing bloody conflicts resulting in thousands of murders since 2007. Despite all the hardships faced by the Mexican people, it is a free market economy with a mixture of both modern and outdated industries and with 78% of the population living in urban areas (CIA, 2011). Mexico can be considered a populous country with an approximate population of 113,724,226 inhabitants, classifying it as the world’s 11th largest population, with an 86.9% literacy rate. Mexico City (with 19,319 million inhabitants) is the second largest city in Latin America, losing first place to the metropolitan region of São Paulo, in Brazil. As regards education, The Economistvi (2011) mentions that by Latin American standards, Mexican schools are rather good. According to the Programme for Interna- tional Student Assessment (PISA4) study, an international test of 15-year-olds in read- ing, maths and science, Mexico had the region’s second-best educated children, after Chile. The Organization for Economic Cooperation and Development (OCDE) says that Mexico is well on track to meet maths and reading targets next year that Felipe Calderon5 set in 2007, near the start of his presidentiaRl office. The Mexican economy is showing signs of recovery having presented growth of 5.5% in its Gross Domestic Product (GDP) in 2010, as opposed to the contraction of 6.5% in 2009. According to the CIA (2011), the GDP fell sharply in 2009 due to the downslide of exports, the price of assets and the downgrading of investments. In com- pensation, the surprising growth of 2010 is related mainly to the growth of exports to the United States, which served to leverage the Mexican economy. In spite of this eco- nomic boom as regards GDP results, the Mexican economy faces inflation that grew from 3.6% in 2009 to 4.1% in 2010 (estimated data), which places it 66th in the world in inflation rates. The report published on July 13, 2011 by the Economic Commission for Latin America and the Caribbean (ECLAC) reinforces the previous comments and indicates the growth prospects as elucidated in the text below: Latin America and the Caribbean will maintain the recovery that began in the sec- ond half of 2009, following the international economic crisis, and are poised to grow 4.7% in 2001 with a strong boost from domestic demand. In these countries, the fastest growing this year will be Panama (8.5%), together with Argentina (8.3%), 4. Programme for International Student Assessment – PISA. 5. Felipe de Jesus Calderon Hinojosa – President of Mexico since December 2006.02-cap01.indd 28 14/09/11 10:35
  29. 29. MÉXICO 29 Haiti (8.0%) and Peru (7.1%). They are followed by Uruguay with 6.8%, Ecuador (6.4%), Chile (6.3%) and Paraguay (5.7%). At the same time, Brazil and Mexico will grow by 4.0%, Venezuela by 4.5% and Colombia by 5.3%. [...] In Estudo Econômico 2010-2011, ECLAC warns that the rise in international food and fuel prices, in the context of growing domestic demand, have given way to the appearance of inflation- ary pressures. Consequently, we can note relative toughening of the monetary policy in several countries from the region, which has widened the gap between domestic and international interest rates. In a scenario characterized by considerable foreign liquidity, this situation favors an appreciation of exchange rates in countries from the region. Although the occasion appears favorable, there is unceasing government concern in relation to low salaries and the unemployment rate estimate of 5.6% in 2010, which earned the country a 55th place in the world ranking, as well as underemployment above 25% in the same period. These results contribute to a percentage of 18.2% of the population living in poverty, which exemplifies its situation in relation to social and economic inequalities. Another relevant negative aspect is the unequal income distribution, with income per capita of USD 13,900 (2010 est.), which puts it in 85th place in the world, and a Gini coefficient6 of 48.2 (0.482), which is still far from zero – confirming inadequate income distribution. Mexico’s port system puts it at an advantage in economic terms, since its vast 9,330 km coastline contributes to exports of tangible products and to tourism devel- opment. In relation to transport, Mexico also has 17,166 km of railway lines, leaving it in 16th place worldwide and number 3 in quantity of airports, with approximately 1,819 across the country. The ruling administration, realizing the commercial possibilities of its transporta- tion system, has expanded the competition of ports, which generates more benefits for business. This competition runs through railways, telecommunications, electricity, dis- tribution of natural gas and airports, which speeds up negotiation processes. The im- provements in the transportation system boost results from the free trade agreement with more than 50 countries including: Guatemala, Honduras, El Salvador, the Euro- pean Community (European Free Trade Area) and Japan. The current administration also obtained support from the opposition and implemented fiscal measures that con- tributed to the country’s economic development. 6. An index close to zero indicates very uniform distribution, while a figure close to one shows very unequal or concentrated distribution. (Mochón, 2007, p. 133)002-cap01.indd 29 14/09/11 10:35
  30. 30. 30 CORPORATE MOBILITY IN LATIN AMERICA The advantages in relation to the vast coastal area also pose difficulties for the Mexican people in cases of natural disasters (volcanoes, earthquakes, tsunamis and hurricanes), which in Mexico have the ability to cause alarming damage. The telephony system appears adequate both for business and for the govern- ment; nevertheless, they are making improvements in the quality of services and mak- ing more lines available for mobile telephony. Internet users total approximately 31 million (2009), putting the country in 12th place in the world ranking. The administration continues to face many challenges, including the improve- ment in the public education sector, infrastructure, modernization of labor laws and promotion of private investment in the energy sector. President Calderon established that his priorities would consist of reducing poverty and creating new jobs. (CIA, 2011) President Calderón declares that tourism in Mexico enjoys national priority in politics and constitutes an essential activity to promote growth and an improvement in standards of living. The sector is the key to promoting targeted regional develop- ment in a sustainable manner (UNWTO, 2011b). In the article published by Ramos7 (2005) in BuenViaje magazine, business tour- ism is important as it regulates the seasonality of tourism demand, that is, improves off-peak occupancy and contributes to increase the average expenditure per person between 3 to 6 times, in relation to the normal tourist who spends US$427 against US$900 (conventions), US$1,830 (conferences) and US2,250 (incentives). In addi- tion, the flow of money left by tourists reflects on the city, region and state, besides contributing to improve commercial activities and not just service providers. In 2004 this segment grew 7.7% over the previous year. And the credibility and reliability of meeting planners overseas have grown on account of the training programs that they have held to offer a better qualified professional. According to Ramos (2005), the country has an excellent and unbeatable product, with several destinations; all that needs to be done is to maintain the work pace and to develop a culture of “passion for serving”, to benefit from successful experiences and learn from mistakes, seeking to identify areas of opportunity. Business tourism has afforded important results in the recent past and offers a very promising future to ev- eryone involved, and with passion, emotion and devotion they will soon be able to see Mexico as number one in international business tourism. According to the OECD (2011): 7. Gastón Eduardo Ramos San Millán – Director of Tourist Services in Mexico.02-cap01.indd 30 14/09/11 10:35
  31. 31. MÉXICO 31 Mexico is recovering strongly from the global recession, helped initially by booming exports and more recently, by a pick-up in private consumption and investment”. […] “Mexico has introduced important reforms to strengthen competition and public rev- enues, said OECD Secretary-General Angel Gurria”. “Now is the time to build on this momentum and push through reforms in vital areas, such as education, taxes and the labor market, that will help Mexico realize its full potential. OECD announced that Mexico came third among the countries that benefit most from their tourist activity in 2010, only falling behind Spain and Portugal (ZÓ- CALO, 2011) Based on the information submitted it is possible to ascertain in advance that Mexico has significant tourism potential and with the necessary economic adjust- ments, plus the improvement of the educational system, should spawn strong devel- opment in the tourist segment in the next few years, which is consistent with the abovementioned targets of President Calderón. MARKET DATA Market research indicates that Mexico came in 10th place in the ranking of interna- tional tourist arrivals in 2010, with a flow of 22.4 million people. It was the only Latin American country to rank among the world’s top 10 (UNWTO, 2011c). And for the period from January to May 2010 arrivals corresponded to 9,372 million against 9,573 million in 2011, with favorable growth of 2.1%. During this period, tourists coming from Russia, Brazil and China exhibited double-digit increases of 58.1%, 40.9% and 32.8% respectively, according to the SECTUR bulletin (2011c). UNTWO (2011c) recorded revenue from Mexican international tourism of US$ 11.9 in 2010 billion in comparison with US$ 11.3 billion in 2009 and, nonetheless, there was a downslide from 19th to 23rd place in 2010. On the other hand, expenditures totaled US$ 7.7 billion in 2010, which put it in 31st place. With this data it can be de- duced that the tourism balance brings in significant foreign currency and contributes to the country’s socio-economic development. According to the data reported by the Bank of Mexico, the average expenditure of all the international visitors in the first five months of the ongoing year was 163 dollars, which represented an increase of 3.2% over the same period of 2010. (SECTUR, 2011c) SECTURvii (2011d) informed that the number of international tourists who arrived in Mexico in April/2011 was 1 million 895 thousand, which represented an increase of 8.1% in comparison with the same prior-year period. In April, total spending by inter-02-cap01.indd 31 14/09/11 10:35
  32. 32. 32 CORPORATE MOBILITY IN LATIN AMERICA national tourists amounted to one billion, thirty-three thousand dollars, which repre- sented an increase of 3% over the same month of 2010. The number of available rooms in 2010 was 322,299 units and demand climbed to 326,907 in 2011. The occupancy rates were 52.08% and 51.72% respectively. (SEC- TUR, 2011) A fact to be considered in the analysis of the demand of the flow of tourists arriv- ing in Mexico by air is the number of American tourists that, considering Texans alone, and in the period from January to May 2011, was 1,023,873 tourists on regular flights. On the other hand, when we consider the flow of tourists from Latin America –Pan- ama is the most statistically significant due to the flow of 100,724 tourists, followed by the Colombians, amounting to 64,174 in the same period, then the Peruvians with 60,836, the Cubans with 52,870, the Costa Ricans with 43,610, Brazil with a flow of 41,200 tourists, Argentina with 26,832 and El Salvador 21,702, whereas these are the most expressive countries in the region, according to data extracted from the Dirección General de Aeronáutica Civil de la SCT – AERCIV (2011). The analysis of such data en- ables us, for example, to assess promotional campaigns and whether the results are well on target, also contributing to the decision to make new investments that pro- mote the tourism8 supply. The Mexican government, through the Tourism Secretariat and the Mexican Tour- ism Promotion Board, has boosted promotion work abroad with the purpose of diver- sifying the supply to other nations and becoming less dependent on tourism from the United States. The growth of arrivals by air from abroad, in May 2011, was fairly repre- sentative. In the case of Brazil they represented growth of 42.4%, Russia 30.5%, China 24%, Korea 18.5%, Australia 16.7%, Canada and the United Kingdom 15.8% each one in comparison to the same prior-year period. (SECTUR, 2011e). The data commented on previously is just part of this process of studying human mobility and travel management. In the specific case of the business segment, accord- ing to the Manual9 on Organization and Market Activities of Tourist Destinations pre- pared by SECTUR (2011f), there are other elements to be analyzed together, in order to measure the installed capacity and its competitiveness, such as: • Hotels – in their supply and flexibility of function rooms, availability, wireless Internet coverage and speed, business centers and others. 8. Tourism Supply – set of tourist products and services at the disposal of users at the destination deter- mined for their enjoyment and consumption, providing a travel experience. (Sectur, 2011) 9. Marketing Organization and Activities Manual for Tourist Destinations02-cap01.indd 32 14/09/11 10:35
  33. 33. MÉXICO 33 • Function rooms – flexibility in room size, availability, wireless Internet coverage speed, power points (outlets), and others. • Convention Centers and Fairs – flexibility in room size, wireless Internet cover- age speed, VIP rooms and others. • Airports – frequency of flights, accessible times, connection with other flights, public transportation options and others, • Carriers – variety and renewal of vehicles, people with the ability to speak foreign languages and others. • Existence of associations and other important entities for the development of the tourism industry, such as: “Oficinas de Convenciones y Visitantes (OCV), or Offices of Conventions and Visitors, Tourism Secretariat and Destination Management Companies (DMC’s)”. • Land transport – public and private to facilitate domestic mobility. Once such elements have been quantified, conditions are created to define the capacity of the destination and to quantify the tourism cluster. The latter is also called a production complex, and consists of a geographical concentration of companies and institutions that interact with one another to do business. The ties that these compa- nies form can improve the performance, competitiveness and profitability of those involved in this productive process. (SECTUR, 2011e) Unfortunately, the data is not yet completely available, much less permanently updated to allow full access to the movements of the segment, but a study10 on 2011 conducted by SECTUR makes it possible to learn a little more about business tourism as concerns conventions and conferences. The average expenditure per Mexican par- ticipant was US$ 1,040 (w/plane) and US$ 686 (without plane); the expenditure of the Americans corresponded to US$ 1,250 (w/plane) and US$ 925 (without plane). Graph 1 below allows us to verify the distribution of expenditures, which evidences air transport with the largest portion, totaling 34%. On the occasion, the study determined that the supply consisted of 310 hotels and 38 compounds distributed mainly among 34 cities. According to market players, the installed capacity for holding conferences and conventions was sufficient for the de- mand at that time, yet in cases of large rooms there was a supply deficit. The buy factors for American meeting planners are indicated in graph 2 (com- petitiveness analysis). We can thus observe that air accessibility, information, cost and variety of activities were the most material aspects and considered good by buyers. The 10. Strategic Feasibility Survey in Congress and Convention Activities.02-cap01.indd 33 14/09/11 10:35
  34. 34. 34 CORPORATE MOBILITY IN LATIN AMERICA Graph 1 Distribution of Expenditures. Source: SECTUR, 2002. most critical aspects were related to safety, which is still a problem for the country to- day, and urban image. The reliability of services and profitability, although they have also been regular, were still superior to safety and to urban image. The SWOT analysis drawn up in the study of 2001, enabled Mexico to identify its strong and weak points. As a strong point it verified air accessibility, varieties of activi- ties and cost of services. The weak points were diagnosed with regards to physical and legal safety, urban image, and reliability of services. The opportunities that presented themselves were related to the low air travel budget, less long distance travel and the interest in new destinations. The threats were investigated in terms of safety, compe- tence, quality and reliability of destinations. The suggestions that market players from the supply side made to the authorities11 on the occasion, concerned the legalization of casino gambling, repayment of taxes, more training and more promotion. On the demand side: better urban infrastructure, streamlining of customs clearance procedures, improvement of telecommunications and of service providers were required as were more quality and efficiency, fulfillment and reliability, inviolable contracts, and safety of facilities. 11. Only the suggestions from the American buyers were mentioned.02-cap01.indd 34 14/09/11 10:35
  35. 35. MÉXICO 35 Graph 2 Competitiveness Analysis. Source: SECTUR, 2002. Figure 2 SWOT Analysis. Source: SECTUR, 2002.02-cap01.indd 35 14/09/11 10:35
  36. 36. 36 CORPORATE MOBILITY IN LATIN AMERICA The study also presented aspects for the development of demand, such as: re- search on specific segments in the North American and Latin American markets, pub- lic relations program for familiarization of the meeting planners with Mexican destinations, to monitor market behavior (benchmarking) of the main competitors: Canada, the US and the Caribbean, systematization of market indicators through OCVs and incentives to the provision of information on hotels and compounds. Domestic tourism is highly significant for the Mexican economy, since according to SECTUR (2011g) it represents 80% of the total hotel occupancy and 86% of expen- ditures in the sector, yet it does not constitute a study subject of this chapter, and was therefore not explained. In the market environment analysis the opinion of company principals is impor- tant to evaluate expectations both for the present and for the future; thus the Business Barometer Survey (quarterly) conducted by Delloite (2011), indicates that the threats to Mexico’s economic development are: lack of security as the number one threat fol- lowed by political discord and the economic slowdown in the US. These are followed at a much greater distance by the decrease of oil prices together with inflation and fi- nally, almost at the same level, are corruption, social conflicts, increase of public defi- cit and wage claims. After a long time executives positively valued all government performance aspects, such as maintenance of low inflation, infrastructure improve- ments, making the economy grow, improving education and reduction of violence. And to wrap up this part, what could be better than the words of SECTUR secretary Oralia Rice Rodrígues, mentioned at the LVII Convention of the Mexican Association of Travel Agencies (AMAV), since she declared that it is no time for complacency, as only coordinated work will place Mexico in the position that it deserves as far as tour- ism is concerned. (SECTUR, 2011g) It is when leaders stop just creating goals and start to implement actions that goals are achieved. FINAL CONSIDERATIONS Mexico is a country with major growth potential in the business tourism segment, not only due to its geographical dimensions and vast population, but also because of the set of elements that it presents. It stands in the second best position in terms of education in Latin America, which contributes to the professional training of labor, which is crucial in the service sector. It occupied 10th place in the ranking of interna- tional tourist arrivals in 2010. It has 1819 airports, which puts it in 3rd place worldwide. The economy shows signs of recovery with growth of 5.5% of the GDP in 2010. And the government perceives the importance of developing business tourism and pro- motes actions to broadcast the country abroad to increase demands.02-cap01.indd 36 14/09/11 10:35
  37. 37. MÉXICO 37 The government has signed new contracts with airliners to operate in the country, which contributes to increase foreign flows and to decrease dependence on the United States. Every transaction can be seen from the perspective of the basic principle of eco- nomics: “Do not put all your eggs in one basket”, hence the need for diversified demand. Business tourism is important due to the creation of small businesses that provide support to the segment through the rendering of diversified services (hotels, inns, res- taurants, stores, taxis, travel agencies, language schools) to meet growing demands. In 2010 Mexico came in third place among countries that obtain the greatest ben- efits from their tourist activity, only losing to Spain and Portugal. Therefore it can be deduced that the development of the sector also increases employability, which can give rise to an improvement in family income whereby the country will be able to generate better income distribution. The combination of natural, economic, social, market and government elements shows that Mexico should grow and develop in the near future, consequently tourism and its subgroup business tourism, will also achieve projection in the global scenario. Although the threat lies in lack of security as the key factor to be considered for eco- nomic development, followed by political discord and the slowdown of the US econ- omy, the government had its measures approved by entrepreneurs, which paves the way for negotiations between the parties and produces a favorable climate for development. i. International tourist arrivals grew by close to 5% during the first months of 2011, consolidat- ing the 7% rebound registered in 2010. According to the April Interim Update of the UNWTO World Tourism Barometer, growth was positive in all world (sub)regions during January and February 2011, with the exception of the Middle East and North Africa. South America and South Asia led growth (both at +15%), followed by Subsaharan Africa (+13%) and Central and Eastern Europe (+12%). http://media.unwto.org/en/press-release/2011-05-11/international-tourism-first-results-2011- confirm-consolidation-growth ii. Although it can be difficult to determine the direction of cause-effect relationships, globaliza- tion would simply not be possible without air transportation. Likewise, the airline industry would be much less significant without concomitant global expansion.[…] The basic principle of all bilateral is reciprocity or equivalency, the agreements covering fares, capacity, frequency, number of carriers and routes flown. iii. […] Business travel can be conceptualized as a set of practices and processes related to the ar- ticulation of the global economy, but also to culture, behaviour, status and even leisure mobilities.02-cap01.indd 37 14/09/11 10:35
  38. 38. 38 CORPORATE MOBILITY IN LATIN AMERICA iv. Face-to-face contact remains a crucial organizational strategy of the firm. / While technology is encouraging remote and virtual interactions, face-to-face contact will still continue to be important in 2015. v. For most travel managers, conducting the negotiation is the exhilarating and rewarding part of the process. Yet, the greater challenge to deriving meaningful savings from a negotiating ef- fort is maximizing the use of the airline seats, hotel rooms, and rental cars that have been hired. vi. By Latin American standards, Mexico’s schools are good. According to a PISA survey, an in- ternational test of 15-year-olds in reading, maths and science, Mexico has the region’s second- best educated children, after Chile. In maths it is improving faster than anywhere else in the 65-country study. The OECD says Mexico is “well on track” to meet maths and reading targets next year, that were set by Felipe Calderón in 2007, near the start of his presidency. vii. The Tourist Board informs that the number of overseas tourists who visited our country in April rose to 1.895 million, equal to an 8.1 percent increase as compared to the same period last year. Expenditures in April by overseas tourists totaled 1 billion and 33 thousand US dol- lars, which sum was equal to a 3.0 percent increase over the same month in 2010. Boletín In- formativo 102/2011. Available at http://www.sectur.gob.mx/es/sectur/Boletin_10202-cap01.indd 38 14/09/11 10:35
  39. 39. 2 CENTRAL AMERICA AND THE CARIBBEAN REGION Andréa do Prado Zago Elizabeth Kyoko Wada Jacqueline Hernandez-Biascoechea Central America and the Caribbean is composed of 33 countries and borders Mexico to the north, Colombia to the south, the Atlantic Ocean to the west and the Pacific Ocean to the east. Among the countries from the region, only 7 are continental while 26 are formed by one or more islands. Figure 1 Political Map of Central America.03-cap02.indd 39 14/09/11 10:36
  40. 40. 40 CORPORATE MOBILITY IN LATIN AMERICA Figure 2 Political Map of the Caribbean Region. The region is known for the beauty of the beaches of white sands and turquoise blue sea, diversified flora and fauna and pleasant climate, especially the Caribbean islands. Many countries from this region are small, in fact some are smaller than cities such as Washington DC, and have tourism as their main activity and the offshore banking sector to attract investments. Traditionally, the region has been known for leisure tourism (some countries focusing more on mass tourism and others on luxury tourism) and, according to World Tourism Organization data (2010), in 2008, 70% of the tourists disembarking in the region were seeking leisure and recreation. But invest- ments in local infrastructure and the tourism structure begin to enable the setup of travel management companies (TMC) and to attract more business tourism, which was represented in 16% in 2008, according to the World Tourism Organization (2010). All the Central American countries and the Caribbean islands have their own small underlying tectonic plate called the Caribbean plate. It is a place subject to earthquakes since as the tectonic plate is small, many countries are close to the edge. The region is susceptible to hurricanes and tropical storms that mainly take place from July to No- vember. In general it has a mountainous relief and is largely volcanic. The soil is fertile and volcanic ash supplements this fertility, enabling the cultivation of bananas and other fruit, coffee, sugarcane, corn, etc. There are large oil and gas deposits in the region.03-cap02.indd 40 14/09/11 10:36
  41. 41. CENTRAL AMERICA AND THE CARIBBEAN REGION 41 Before the arrival of the Europeans the region was populated by several indige- nous tribes, mainly the Arawak and Maya. The European colonization started in Cuba and the region was disputed mostly by Spain, France, the United Kingdom, the Neth- erlands and afterwards by the United States. Today some countries are still dependent on their colonizers. The first economic activities of the region were geared toward ag- riculture, mostly sugarcane. Lots of slaves were brought from Africa for this activity. Nowadays, blacks represent a high percentage of the population of the countries, ex- cept for Costa Rica, which has a white majority. There are blocks of economic cooperation, development and politics in the re- gion such as CARICON (Caribbean Community), Organization of Western Carib- bean States, ODECA (Organization of Central American States, SICA (Central American Integration System) and ECLAC (Economic Commission for Latin America and the Caribbean). GENERAL INFORMATION ABOUT EACH COUNTRY Table 1 General particulars of countries from Central America and the Caribbean Region. Official Country Capital Area Population Currency Language East Caribbean Dollar Anguilla The Valley 91 km² 15094 English (XCD) Antigua and East Caribbean Dollar Saint John’s 442,6 km² 87,884 English Barbuda (XCD) Dutch and Aruba Oranjestad 180 km² 106,113 Aruban Florin (AWG) Papiamento Bahamian Dollar Bahamas Nassau 13,880 km² 313,312 English (BSD) Barbados Dollar Barbados Bridgetown 430 km² 286,705 English (BBD) English, Belize Belmopan 22,966 km² 321,115 Belize Dollar (BZD) Creole and Spanish Costa Rican Cólon Costa Rica San José 51,100 km² 4,576,562 Spanish (CRC)03-cap02.indd 41 14/09/11 10:36

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