There is plenty of room for growth in the Argentine tourism industry, in particular for international hotel chains. They control 8% of the market, far less than the 45-50% they command in developed markets, or their 70% share in the US.
When Sharilyn Amy and Marcelo Battilana went on vacation in the Argentine Patagonia, they spotted an opportunity. The last beachfront lot was for sale in Puerto Piramides, the only town on Peninsula Valdes. They plowed $2 million into buying the land and building a 13-room boutique hotel, which opened last December.
The odds were against them, and remain so. The Argentine economy contracted and construction costs surged with 40% inflation in 2016, and prices have continued to rise.
Still, they saw potential for a tourism boom on the peninsula, for its hidden beaches with turquoise water, elephant seals, and penguins. Whales breed within eyesight, and orcas can be watched swimming into the shore break to feed on sea lions.
"There's a beautiful story to tell there, and it hasn't been told well enough yet," Amy told Latin Trade. "One of the things that Argentina is just learning how to do well is to tell its own story internationally."
VARIED LANDSCAPES AND MULTIPLE CHALLENGES
Argentina has a lot to offer, from moonscape deserts to glaciers, and up-and-coming wineries. But it's a long, expensive flight to get there, and as pricey as Europe after a decade of fast inflation and an even longer history of economic volatility.
And often "you get the feeling that everybody is on the take", said Mike Poots, a manager at Buenos Aires tourism agency Cientours. "There is always this sense of impending doom, so people say, 'Let's make a lot of money now because it's not going to last'."
Mauricio Macri, the country's president, hopes to change this perception.
He wants to increase foreign visits to nine million in 2020 from six million in 2016. To help, he has rolled out tax benefits for non-resident tourists: pay for lodging with a foreign credit or debit card, and they get an automatic refund of the 21% value-added tax. Another step is to open more than 500 air routes into and around the country over the next two years, many for low-cost airlines like Norwegian Air Shuttle.
More importantly, the government is restoring the economic and legal stability undermined by populist rule from 2003 to 2015. "The best strategy to encourage investment has a simple but powerful component: we have to get back to being a normal...