Impact of U.S. Travel Advisories on Nearshore Site Selection
by King White, on Feb 11, 2025 7:00:00 AM
As the nearshore region continues to attract U.S. companies for operations like call centers, software engineering, and manufacturing, U.S. travel advisories play a crucial role in shaping site selection decisions. Companies are increasingly cautious about setting up operations in countries where travel risks are deemed high, often prohibiting employee travel to these regions. Such travel restrictions can influence the feasibility of nearshore projects.
Understanding U.S. travel advisories
The U.S. Department of State issues travel advisories to help travelers assess the safety of international travel destinations. These ratings range from Level 1 (Exercise Normal Precautions) to Level 4 (Do Not Travel), with the advisories reflecting factors that include crime, terrorism, civil unrest, health, and other potential risks.
Influence on site selection
For companies considering nearshore locations, these ratings are a significant factor. For instance, while Mexico is a popular nearshore destination, its varied ratings by city can complicate site selection decisions:
- Level 2 (Exercise Increased Caution): Cities with this rating are considered relatively safe, making them more attractive for setting up operations.
- Level 3 (Reconsider Travel): Areas with this advisory may pose higher risks, leading companies to be more cautious and potentially reconsider their investment.
- Level 4 (Do Not Travel): Cities or regions with this rating are typically avoided for new investments due to high safety risks.
Impact on different sectors
- Call Centers and BPOs: These facilities often require frequent visits by U.S. management teams for training and operations oversight. A high advisory level can deter such activities, impacting operational efficiency and management.
- Software Engineering: These projects may require less frequent travel compared to call centers, but the safety of local and expatriate staff remains a priority, influencing the attractiveness of the location.
- Manufacturing: Given the significant investment and the need for robust supply chain operations, manufacturers must carefully consider the implications of travel advisories on the security of their investments and personnel.
Ratings by country
Here’s a look at some key nearshore countries and their current U.S. travel advisory levels, highlighting the diversity in safety perceptions:
Country |
US Travel Advisory |
| Argentina | Level 1: Exercise normal precautions |
| Belize | Level 2: Exercise increased caution in Belize due to crime. Some areas have increased risk |
| Bolivia | Level 2: Exercise Increased caution in Bolivia due to civil unrest. Some areas have increased risk. |
| Brazil | Level 2: Exercise increased caution in Brazil due to crime. Some areas have increased risk. Do not travel to any areas within 150 km/100 miles of Brazil’s land borders with Venezuela, Colombia, Peru, Bolivia, Guyana, Suriname, French Guiana and Paraguay due to crime |
| Chile | Level 2: Exercise increased caution due to civil unrest. |
| Colombia | Level 3: Reconsider travel to Colombia due to crime and terrorism. Exercise increased caution due to civil unrest and kidnapping. Some areas have increased risk |
| Costa Rica | Level 2: Exercise increased caution due to crime |
| Dominican Republic | Level 2: Exercise increased caution due to crime |
| Ecuador | Level 2: Exercise increased caution in Ecuador due to civil unrest, crime, and kidnapping. Some areas have increased risk. Crime is a widespread problem in Ecuador. Violent crime, such as murder, assault, kidnapping, and armed robbery, is prevalent and widespread. The rate of violent crime is significantly higher in areas where transnational criminal organizations are concentrated. |
| El Salvador | Level 2: Reconsider travel due to crime |
| Guatemala | Level 3: Reconsider travel due to COVID and crime. Some areas have increased risk. |
| Guyana | Level 3: Reconsider travel due to crime. |
| Honduras | Level 3: Reconsider travel to Honduras due to crime. Some areas have increased risk. |
| Jamaica | Level 3: Reconsider travel to Jamaica due to crime. Some areas have increased risk. |
| Mexico | Levels 2, 3, and 4. Varies by city. |
| Nicaragua | Level 3: Reconsider travel due to limited healthcare availability and arbitrary enforcement of laws. Exercise increased caution in Nicaragua due to crime. |
| Panama | Level 2: Exercise increased caution due to crime |
| Paraguay | Level 1: Exercise normal precautions |
| Peru | Level 2: Reconsider travel to Peru due to crime. Some areas have increased risk |
| Uruguay | Level 2: Exercise increased caution due to crime |
Conclusion
The dynamic nature of U.S. travel advisories necessitates that businesses engaged in nearshore site selection stay continually informed and agile in their decision-making. Understanding and mitigating travel-related risks is crucial for maintaining the safety of personnel and the viability of international operations. As we get further into the year, companies will need to closely monitor these advisories and perhaps reassess their strategic positions in the nearshore regions.
