Argentina Heading for First Negative Balance in Tourism in Ten Years

For the first time since 2002 Argentina is forecasted to end the tourism year with a negative balance totaling 2.3 billion dollars compared to a positive one of 304 million dollars in 2011, according to consultants Ecolatina.

The strong Argentine Peso is one of the main causes for the tendency since the increase in domestic prices makes relatively cheaper the overseas tourism options over those locally, besides at the same time dissuading foreign visitors and stimulating Argentines to travel overseas, explains Ecotlatina the consulting firm linked to former Economy minister Roberto Lavagna.

According to the International Tourism public opinion poll, ETI, the number of foreign tourists arriving in Argentina dropped 3.5 percent, while in the same period the number of Argentines travelling overseas jumped 16 percent.

In effect Ecolatina says that the so called ‘dollar-clamp’ has had an unwanted contrast for the government since “for Argentines wishing to travel overseas, the financing of tourism packages in Pesos and at the formal exchange rate (in a context of lack of investment alternatives) has become a mechanism to have access to the US dollar at the official rate.

The ‘dollar clamp’ has had the effect of creating a parallel market for the US currency which at the end of trading last week was in the range of 6.80 Pesos compared with 4.87 Pesos at the official exchange rate, thus granting Argentines travelling overseas a 40 percent benefit .