Buenos Aires economic indicators

Argentina has achieved a remarkable image as a tourist destination. Recognition of the tourism industry in Argentina, increased investment and the availability of high quality services have attracted an increased number of tourists. The number of arrivals in 2005 was the highest over the review period. Far from being a fleeting phenomenon, the trend is expected to gain further momentum.

North American and European arrivals grow the most in 2005: In 2005, the number of arrivals from North America grew the most on 2004, followed by the number of arrivals from Europe. This trend is expected to continue as the peso appreciates in value, as this inhibits arrivals from the countries that border Argentina. Companies are expected to focus on long haul arrivals, with the offer of quality packages and accommodation, in order to make up for a lack of local arrivals.

Hotels construction enjoys a boom but other travel accomodation alternatives also surge : Various parts of Argentina experienced the construction of new hotels in 2005. While 5-star hotels were concentrated in Buenos Aires City and along the coast in 2005, construction of new hotels also occurred in regions such as Mendoza, Patagonia, Salta and Iguazu. These locations have undergone regeneration in order to attract tourists and improve the local economy. Additionally, other accommodation has increased due to an increased number of wealthy tourists who want to experience Argentina by staying at fishing lodges, spas and estancias (North American style ranches).

Tourists tango their way round Buenos Aires City : Tango has turned into an industry in Buenos Aires City, where tango houses have blossomed in traditional neighbourhoods to the delight of incoming tourists. Tango classes, Milongas, (locations where tango is performed) shows, books, music, shoes and garments have all turned tango into a centre stage attraction for a great number of North American, Spanish and Scandinavian tourists.

Cruise brings “5-star” passengers to 5-star hotels in Buenos Aires City Cruise experienced a record number of transportation sales in 2005. Cruise brings exclusive passengers, who stay in 5-star hotels, into Buenos Aires City during the cruise season, which runs from October to March. The surge in cruise arrivals resulted in full occupancy of the most highly rated hotels in Buenos Aires City in 2005. Additionally, cruise arrivals have helped to boost tourism in relatively isolated places such as Tierra del Fuego. Cruise is considered to be so important that there is a private project for the construction of a new port for cruises in Buenos Aires City.

Back from the Brink By: Pat Adams Global Traveler Magazine August 2006

Having weathered the worst, Buenos Aires is back and business is good.

Looking at Buenos Aires from the window of a taxi on the world’s widest avenue — Avenida 9 de Julio — it’s all a bit difficult to believe. Just five years ago, Argentina’s economy collapsed, impoverishing more than half the population and leading to the largest loan default ($155 billion) in modern history. And yet, by appearances, the crisis has come and gone with hardly a trace.

Massive French-style mansions and soaring steeples, most built around the turn of the 20th century when Argentina was one of the richest countries in the world, overlook grand plazas and manicured greens. Stylishly coiffed, if conservatively dressed, executives chat on cell phones while sipping espressos in curbside cafes or feasting on succulent, homegrown steaks in smoky parillas; the air buzzing with Castellano (Argentina’s distinctive, slang-saturated version of Spanish).

The recession of the late 1990s and the devastating devaluation of the peso, from 1-to-1 with the U.S. dollar to 3-1, literally overnight, certainly have left their scars — both financial and emotional — as well as a lingering distrust of any advice originating in Washington. But if the crisis was crippling in a way few countries have ever known, the recovery has been equally impressive.

Since 2003, when populist president Nestor Kirchner took office, the economy has steamed ahead at an average clip of nearly 9 percent a year, far outpacing the rest of the region. And there’s little sign of any slowing; the International Monetary Fund projected growth of 7.6 percent for Argentina in 2006. Even neighboring Chile, the biggest economic success story in the Americas over the last two decades, can’t boast those numbers.

As China and India drive up demand for natural resources, Argentina, the world’s fifth-largest exporter of agricultural goods, is profiting as never before. Soy, meat, dairy, grain, tobacco, wool, and hide products from the lush Pampa Húmeda are delivered via highway to Buenos Aires, the nation’s capital and biggest city. Located on the Rio de La Plata (River of Silver), the country’s hub of commerce, industry, finance and culture is also one of the world’s busiest ports.

From its founding in 1588 by the gold-seeking Spaniard Pedro de Mendoza, Buenos Aires’ significance as a point of distribution, rather than any precious metal, has fueled its growth.

Long before declaring its independence in 1810, porteños (port dwellers), as the city’s inhabitants are known, defied Spain’s orders that all trade pass through Lima, Peru. A thriving industry in contraband smuggled into the “City of Fair Winds” laid the financial foundations for South America’s most developed country.

That may seem a tenuous title given the boom-bust cycle that has long characterized Argentina’s economy. But current trends, like a decreasing poverty rate, down 25 percent since 2002, and steadily shrinking unemployment, have given Argentines and outsiders alike reason to believe the best times are yet to come. Investment has more than doubled since the crisis, hitting $41 billion in 2005, or 24 percent of GDP; the automotive industry is bouncing back; and a construction boom — the sector expanded by 20.5 percent last year — is breathing new life into once-deserted areas of the capital.

Most remarkable of these rejuvenated spaces is Buenos Aires’ 47th barrio, Puerto Madero. Built in 1889, the port was abandoned soon thereafter, too small for the burgeoning maritime trade empire it was designed to serve. When that empire fizzled out, the port’s gutted, rat-infested warehouses came to reflect the dashed hopes of the nation itself. In 1989, however, with inflation at almost 200 percent, president Carlos Menem sold the land to a private consortium, sparking a process of development that eventually would render a new port with a new purpose.

Today, Puerto Madero embodies a resurgent, confident, and ever-modernizing Buenos Aires. High-end eateries and high-rise office buildings have filled the void, and an all-but-forgotten mound of rubble has become the most valuable residential real estate in Latin America (prices average $1,800 per square meter). Indeed, residential projects are driving the area’s rebirth, and chief among them is the Faena Hotel + Universe.

A luxury hotel and apartment building in one, the Faena is the brainchild of Argentine fashion designer-cum-entrepreneur Alan Faena. Designed by French architect Phillipe Starck, it’s the ultra-cool crash pad of Buenos Aires’ international jet-set. And still it strives to preserve, as Faena puts it, “the essence of who we Argentines are.” Housed in a historic brick grain silo, the hotel is just one of a series of restored buildings that make up Faena’s grand plan: “El Porteño Art District.” The objective, he said, is to “redefine the living experience by transforming an urban space into a center for the arts and creativity.”

Still, the area’s transformation hasn’t been entirely urban or carefully planned. One of Buenos Aires’ most attractive features is the Resérva Ecológica. During the military dictatorship that ruled Argentina between 1976 and 1983, authorities sought to build a satellite city across from the port. But after the military lost its grip on power, plans stalled and nature took its course. Today, joggers and bikers take to the 868-acre green space for fresh air, exercise or romantic strolls by the water.

The economic turnaround hasn’t been without its problems. At 12 percent, inflation is a continuing concern. The government has resorted to controversial price freezes as well as a ban on meat exports. But prices keep creeping up. According to the president of the Central Bank of Argentina, Martín Redrado, that’s natural for a rebounding economy. Unlike in years past, he said, Argentina’s fiscal solvency and prudent monetary policy can keep it under control.

Buenos Aires is business-friendly, comfortable and connected. U.S. travelers don’t need a visa to enter the country, and most porteños are glad to show off their English, which many, mostly younger people, speak quite well. There are 17 five-star hotels, endless options for fine dining, and cybercafes (or locutorios) all over the city. WiFi hotspots are increasingly common and cell phones are ubiquitous.

With its biggest fiscal surplus in 50 years, a trade surplus bolstered by Asian demand, tourism levels at historic highs, and consumer spending on the rise, Argentina is putting a painful past behind it - and Buenos Aires is leading the way.

Beautiful Buenos Aires: A Place of Possibilities

All visible signs in this dynamic metropolis, home to a third of the nation’s population, point to a nation on the rise. Despite Argentina’s refusal to follow conventional advice and cut deals with foreign creditors in the wake of the economic crisis in late 2001 that led to the worse depression in its history, the economy is recovering. Claims of bondholders, banks and the IMF were put on hold while internal consumption was stimulated. The result: more than two million new jobs and an 8% growth over the past two years.

Concurrently the mood in Buenos Aires is upbeat. Shops are crowded; so are the many excellent restaurants featuring famed Argentine beef; city services are apparently functioning smoothly; cruise ships linger in the port long enough for passengers to fill the many hotel rooms; and companies like IBM are holding international conferences in huge downtown hotels.

Again one hears Buenos Aires referred to as “Paris of the South,” and how apt the metaphor seems on a stroll through Recoleta past the sand-colored stone palazzos and high-end boutiques or across the swaths of plazas and public gardens. Perhaps even moreso seated at an outdoor café along a broad boulevard among elegantly-dressed Porteños – surprisingly of Italian as much as Spanish origin – who linger over coffee through the afternoon as the world passes by. www.travel-watch.com

For more information, see the web site dedicated to property in Buenos Aires : TopFloor.blog.com or contact Russell Ferrier by email russell_ferrier@hotmail.com or telephone Buenos Aires (+54 11) 4804 6931