Summer tourism season picks up steam amid competition from abroad
Hotel occupancy rates on the coast hover around 60 to 70 percent as tourists take shorter holidays or head to Uruguay and Brazil
A week into peak tourism season, the country’s main destinations are busy, but not quite bustling.
With occupancy rates in hotels topping out at around 60 to 70 percent, operators are hoping for more in the coming weeks as they adapt to tourists taking shorter trips instead of the week-long or even month-long trips of the past. In turn, the Uruguayan coast is jam-packed and the government’s sales tax refund for foreigners is drawing some tourists into the country.
While Buenos Aires City has progressively been emptying of porteños since Christmas Day, and foreigners easier to spot than usual, the Argentine coast has for example not yet hit full capacity thus far in January. Cities such as Pinamar and Mar del Plata, which have economies that depend a great deal on inflows of tourists every summer, are seeing an average of about 60 to 70 percent occupancy rates — not a bad summer but not enough to make it a strong one yet.
In Mar del Plata, some 415 kilometres down the road from Buenos Aires City, and long one of the focal points for beachgoers from across the country, the New Year was welcomed with an average occupancy of 70 percent and operators are expecting another round of short-term visitors. The Christmas weekend saw occupancy rates of 50 percent.
“We are expecting once again a season of short trips, as has been happening in the last few years, with a lot of last-minute decisions and the greater use of information technology that allows users to take decisions based on deals, the weather, the state of the highways, among other variables” said Avedis Sahakian of the Hotel and Gastronomy Association of Mar del Plata (AEHG) in conversation with the Télam news agency.
Tourism operators have noted that this trend has meant that some of the seasonal aspects of some locations has diminished and visitors are arriving at new periods throughout the year.
While Sahakian promoted Mar del Plata as unique in the immediate region in terms of services for tourists, some hotel and restaurant-owners in the smaller coastal city of Pinamar have chalked up the difficulty in attracting tourists to competition from Brazil and Punta del Este, Uruguay. In particular, the inclusion of flights to Brazil in the Ahora 18 payment installment programme was mentioned.
In a written statement to the Herald, the AEHG in Mar del Plata noted that Argentine tourists in some cases opted to travel abroad “to take advantage of opportunities given that they had bought airplane tickets early, in other cases there is the imagination that makes the destination seem more important, superior or a different kind of vacation, but it is common for travellers to not compare similar services but rather to consider as equivalent nights in a hotel without services or a rented apartment in the south of Brazil with a hotel with 24-hour services in the Atlantic Coast.” The AEHG noted that competition from other coastal locations has been a constant and “will continue to be.” That competition has meant that prices have been under pressure not only to attract visitors with multiple choices but also that “we have observed a very careful approach to family budgets.”
The Argentine Tourism Chamber (CAT) has been optimistic about the summer season, noting that there had been “positive” results with “significant indices of tourism in the Atlantic Coast, Iguazú, Mendoza, Bariloche, Salta, Córdoba and in general in all of the districts of the country.”
The Ahora 18 programme nonetheless was pointed to as a boon for tourism by the CAT. “We believe that the joint efforts with which we have been cooperating from the CAT, such as the sales tax refund for foreign tourists that came into effect on January 2, as well as the inclusion of the tourism sector in the Ahora 18 programme are some of the measures that are contributing and allow us to observe the season with a positive outlook.”
Installment programmes are helpful when facing the steep cost of time in the sun. Sahakian estimated the average cost of a week in Mar del Plata, including meals, a theatre outing or two, snacks and 3-star hotel at between 22,000 and 25,000 pesos. Most of those expenses can be divided up until 18 payments.
Starting this week the AFIP tax bureau will refund Value Added Tax (IVA) of 21 percent applied to hotel services and other lodgings for foreign tourists visiting the country and those who pay for services with credit and debit cards registered abroad. The sum to be refunded will be calculated according to the rates per night and will be applied automatically when the tourists pay to check out at the hotels.
Uruguay has also implemented a system by which it refunds 10.5 percent on the rental of property, and drastically reduced sales tax on purchases made with credit or debit cards issued abroad on services such as restaurants, bars, hotels and hostels, and car rentals among others. Locals still have to pay the 22 percent sales tax.
As such, at this early stage of the summer season, the exclusive destination of Punta del Este in Uruguay is on course for a a record season — fuelled by Argentines making it across the River Plate in droves. Numbers cited by La Nación suggest that resort town is on track to welcome more than 365,000 tourists in 2017 — above the previous record of a shade over 310,000 in 1997. While 2016 was already a strong year for the Uruguay in terms of welcoming tourists, the early numbers suggest that this year will surpass it. Central to the fresh growth in Argentine tourism to Uruguay has been the lifting of the 35 percent surcharge that the Fernández de Kirchner administration had included on foreign purchases and which was lifted early in the Macri administration along with currency controls which restricted access to US dollars in cash.
Floriánopolis, on the southern Brazilian coast, has also seen swells of Argentines with Brazilian authorities expecting about 27 percent more tourists than last year. Lower prices in Brazil following its 2015 devaluation and low inflation rate (relative to Argentina) has made it once again a busy destination.
Interestingly, trends on the coast have also been seen in places such as Córdoba — known for the sierras which offer a drastically different landscape from the beaches and which also welcomes the vast majority of tourists in January and February.
Speaking to the Herald Fernando Faraco, executive director of the Córdoba chapter of the Hotel and Gastronomy Business Federation of Argentina (FEHGRA) noted that so far in January the occupancy rates in the sierras have been hovering around 60, 70 percent. Occupancy rates of 80 percent and upwards are considered high.
“Right now, we are looking at the rates in the sierras of 60 to 70 percent for the first fortnight of January, that is not a huge mass of people. In recent years there has been more tourism to the City of Córdoba in the summer but we haven’t noticed that yet. For the second fortnight we have reservations for about 40 percent of the hotels, which is more or less normal considering the date” said Faraco.
There was a bump in tourism to the province during the extra long weekend in early December, but again, not overwhelming.
The FEHGRA declined to speculate on what could explain the occupancy rates, and noted that the summer season is only just getting into swing.
“Córdoba is still waiting for the tourists, there’s room. There’s been rains in the sierras which means that everything is green and beautiful,” Faraco concluded.