How do you use tourism to drive economic growth? Argentina’s story.
Argentina’s economy has had a turbulent ride in recent years. Tourism wasn’t seen as important when the country was experiencing high inflation and unable to pay its debts. But with the arrival of the current administration under President Mauricio Macri, it’s increasingly seen as a vital sector for sustainable growth. Indeed its potential for providing valuable hard currency and secure jobs is seen as a core element of the wider industrial strategy.
Speaking at the WTTC Global Summit in Buenos Aires last month, Tourism Minister H.E. José Gustavo Santos said that in just four years Argentina aims to boost international tourist arrivals by 50% and their spending by 90%. Objectives for the domestic market are equally bold, with plans to raise domestic tourism from 47.7 million internal trips in 2015 to 70 million in 2019. If the forecasts are correct, this should increase employment in the sector by 28% generating 300,000 new jobs.
Here’s a selection of the steps being taken. They offer a useful blueprint for any country looking to capitalise on the unique advantages Travel & Tourism can offer for long term development.
Make it easy for people to come
Argentine airspace was tightly controlled with the national carrier Aerolíneas Argentinas enjoying high levels of protection (and losing $2 million a day). An aggressive policy of opening the skies to competing airlines has had a dramatic impact. Buenos Aires became the first city in South America to welcome low cost airline Norwegian in 2018 with direct flights from London. American Airlines recently added new services to Buenos Aires and Cordoba. A further three new companies received permission to fly in recent months.
Encourage domestic tourism
In most countries, domestic tourism is worth double, often triple, the value of inbound tourism. So encouraging nationals to explore their own country is a great way to kick start tourism sector growth. Argentina’s domestic airspace has also been opened to competition and there’s been a boom in domestic tourism. 13 million passengers took domestic air trips last year, an increase of three million in 2015. New or soon-to-arrive entrants like Lassa, Avianca, Flybondi as well as Norwegian are all increasing frequencies and destinations served. With the highest GDP per capita in South America, Argentines fly far less than their neighbours, taking half as many flights per year as Brazilians and a third as many as Chileans. So there’s still plenty of room for growth.
Invest in the right infrastructure
With more flights and more tourists arriving, it’s essential that the infrastructure is there to support them. There’s nothing worse than arriving in a country and having to queue for hours to clear immigration. Aeropuertos Argentinas 2000 has invested over $250 million in the past two years in airport development. That’s just part of a total of $1.5 billion of investment in airport infrastructure that’s being made. Encouraging international investment has been a priority too. A range of hotel projects is already being developed by the likes of Iberostar and NH that’s worth around $170m. In total, WTTC members are set to invest $1.9 billion into Argentina over coming years.
Cut red tape
Gone are the days when tourists from places like the USA, Canada and Australia had to pay fees of up to $160 to enter Argentina. Holders of passports from nearly 90 jurisdictions can now visit without a visa, and the government also plans to waive visa requirements for Chinese visitors who already have visas for the US or EU. A similar plan is being proposed for Chinese tourists who already have visas for Brazil and Chile. VAT reimbursement for tourists on goods purchased in Argentina has been available since 2001, but recently this has been extended to the cost of accommodation too.
Focus on what your audience want
Argentina has much to offer tourists: remarkable natural wonders like Iguaçu, vibrant cities like Buenos Aires, world class wine and food, the vast spaces of the pampas and the snowy peaks of Patagonia. With an eye on the growing demand for authenticity and experiencing the wonders of the natural world, making Argentina known for eco-tourism is a key priority. The intention is to double the amount of space given over to National Parks. An ambitious plan to develop the four northeast provinces of Misiones, Chaco, Formosa, and Corrientes into an eco-tourism corridor is being implemented.
Drive development where it’s most needed
Starting out with a plan that includes spreading the increased numbers of tourists around the country makes a great deal of sense from a tourist management perspective. There are plans in place to route international flights to places other than Buenos Aires. And those provinces in the northeast that will form the eco-tourism corridor? They are also some of the country’s least developed. Opening up these areas to tourism will bring jobs and opportunities where they are needed most.
Put out the Open for Business sign
Building momentum around major events, when the world’s attention is focussed on your country is another great way to boost tourism numbers. This year, Buenos Aires has hosted not just the annual WTTC Global Summit where the country’s ambitions for tourism were set out before Travel & Tourism’s most important opinion leaders, but also the G20. The Youth Olympic Games will take place in Buenos Aires in October too. Ultimately, it’s all about putting your destination on the map.
Further reading: Argentina Economic Impact Report 2018