Chile Tourism Cashes in on Global Crisis

While the economy is slowing, hitting industries from mining to retail and construction, tourist arrivals in Chile have risen this summer as Argentina visitors skip long-distance air fares and cash in on the neighboring nation’s weak peso.

“We came by car, so our only cost was petrol,” said Argentine vineyard manager Angelica Ramos, sprawled in the sand at the upscale resort of Renaca 80 miles west of the capital Santiago, sipping at a gourd of Argentine herbal tea.

Ramos and her husband drove from neighboring Argentina’s San Juan province across the Andes, which is closer to Chile’s beaches than Argentina’s or Uruguay’s. In Renaca and nearby resorts, Argentine number plates pepper the roadside.

“Aside from the plane ticket to go elsewhere, like Brazil for example, it is also more expensive there,” she said. Chile’s peso fell 22 percent against the dollar last year, making prices more competitive, although it has recently strengthened again.

Revenue from foreign tourists rose 9 percent in the peak month of January from a year earlier, with arrivals from Argentina up 22 percent. Domestic tourism revenues were up 8 percent.

But as in neighboring Argentina, the number of long-distance visitors fell off sharply as the global crisis took a hold, with arrivals from Germany, Australia and the United States down nearly 20 percent in January.

Argentina’s foreign tourism revenue, which totaled USD$3.3 billion in 2008, fell 8.5 percent in December.

Oscar Santelices, the director of Chile’s national tourism service, expects tourist arrivals for the year to rise around 5-6 percent from the 2.65 million seen in 2008. But Argentines and Chileans are replacing many higher-spending tourists from further locations.

And fewer tourists traveling from Europe, the United States and Brazil could mean trouble for the Easter period and the Southern Hemisphere ski season, which kicks off in June and depends heavily on foreign tourists.