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ARGENTINA: Both Foreigners and Locals Drive Tourism Boom
By Marcela Valente
BUENOS AIRES, Aug 15, 2006 (IPS) - Since the 2002 devaluation of the peso, Argentina has not only drawn increasing numbers of foreign visitors, but many locals, who in the 1990s took advantage of the strong peso to travel abroad, have turned their gaze instead to their own vast country as a tourist destination.
According to a report released this month by a local consultancy firm, Ecolatina, growth in the tourism industry has outstripped average economic growth in Argentina during the past three years, despite the strong overall performance of the economy.
The increase in tourism revenues is mainly due to the massive influx of visitors from abroad, but also to the improved buying power of Argentines.
"Since the devaluation, tour agencies in Buenos Aires catering to incoming tourists have been flooded with customers from abroad," Ricardo Watson, one of the three managing partners of Eternautas, which organises tours to historic sites in Greater Buenos Aires, told IPS.
Watson and his two partners are historians by training. They had recently graduated from college when they decided in 1998 to organise tours for city residents, offering curious or little known bits of information on places that local inhabitants frequented on a daily basis. But their business really took off after the 2002 collapse of the peso.
After a decade during which the peso was pegged to the dollar by law, its value plunged to nearly four against the dollar, finally stabilising at around three. That made Argentina a cheap and attractive tourism or business destination for foreign nationals.
Buenos Aires also pushed aside Rio de Janeiro to become South America's top hotspot for gay tourists, Carlos Meliá, director of the Pride Travel agency, which caters to gays and lesbians, told IPS.
The enormous growth in demand has driven the construction of suites, hostels, guest houses and furnished apartments for that market niche, including a five-star hotel that is set to open in 2007.
Meanwhile, in Eternautas, the three partners have six administrative employees and 20 tour guides who are all college graduates in social sciences. Their clients are now mainly incoming tourists: executives and vacationers from abroad, and professionals on business trips.
"The big agencies that used to organise tours for executives from Argentina who were traveling overseas now serve visiting foreigners and coordinate conferences," said Watson. When one dollar purchased one peso, conference participants came by themselves. Today, they bring the whole family, he pointed out.
The travel agent said the Argentine capital is not only an inexpensive destination, but also a fascinating city that draws people back again and again. The same is true of places like the southern ski resort of Bariloche, the Perito Moreno glacier in the southern province of Santa Cruz, and the Iguazú falls on the northern border with Brazil.
Furthermore, said Watson, Argentina has no armed conflicts, like in the Middle East, is not a potential target of terrorist threats, like the United States or Europe, and is not at risk of natural catastrophes, like the hurricanes of the Caribbean or the tsunamis of south and southeast Asia. "It's a distant, but safe, destination," he stressed.
And there is something for every taste - football for the fans who come to see the birthplace of legendary footballer Diego Maradona; tango bars for those interested in dancing or simply listening and watching; the historic streets that inspired world renowned writer Jorge Luis Borges; or the tombs of historical figures like Eva Perón and Carlos Gardel.
The shift in tourism flows has also reduced the negative balance of tourism payments. Between 1994 and 2001, when travel abroad was easily affordable for the middle and upper socioeconomic sectors, the average annual negative balance was 1.25 billion dollars.
But the situation changed after 2002, when the growth in incoming tourism expenditure began to offset Argentines' spending abroad, and the negative balance shrank to just 64 million dollars.
This year, tourism officials expect no deficit at all in the balance between incoming tourist receipts and outgoing tourism expenditure.
In the mid-1990s, an average of 2.2 million foreign visitors a year reached this country of 36 million. That figure rose to 2.6 million after the depreciation of the peso, and has not stopped climbing since, to 3.7 million last year and to a projected 4.1 million for 2006.
With the growing amount of hard currency left behind by visitors, tourism has become the fourth biggest source of foreign exchange, after exports of soybeans and oil, and automobile manufacturing - even surpassing traditional exports like grains or beef.
"We were already doing good business in the 1990s with high-end tourists who mainly came from the United States, Europe and Brazil," said Sergio Pappatico, with the Patagonia Argentina.Com agency, which specialises in excursions to southern Argentina. "But since 2002, the influx has grown between 20 and 30 percent a year," he told IPS.
"In the last few years, we have also begun to work with middle-class Latin American families from countries like Colombia, Peru or Venezuela, who in the past didn't come to the Southern Cone region of South America," said the travel agent.
But he warned that the growth in tourism could quickly be reverted if prices start going up.
Last week, the Argentine government and the airlines agreed on a 20 percent hike in domestic air fares.
"What hasn't been announced yet," said Pappatico, "is that this price hike will only apply to residents in Argentina, while for everyone else, the price in dollars will be the same as the price in pesos. That could deal a harsh blow to the tourism industry."
But in the meantime, fewer Argentines are visiting Disney World, choosing instead to get to know their country from north to south, often running into visitors from neighbouring Chile, Uruguay or Brazil, who often cross the border to shop or visit one of the many popular attractions.
(END)
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