Low-Cost Luxury Tempts Tourists to Argentina After Currency Rout
(Bloomberg) -- From Buenos Aires to Bariloche, travelers are cashing in on Argentina’s cheap currency as the country grabs headlines as a go-to destination.
The peso has tanked nearly 50 percent against the U.S. dollar this year, the biggest drop in emerging markets. That loss has now become tourists’ gain, turning luxuries such as grass-fed steaks and world-class wine into bargains for globetrotters with greenbacks.
While wreaking havoc on ordinary Argentine citizens, the country’s currency crisis helped spur a 12 percent increase in foreign tourist arrivals in September, the third consecutive month of year-on-year gains, according to government statistics. In the third quarter of this year, the number of tourists arriving via airports was up nearly 10 percent.
Travel experts say the peso’s decline, for tourists, provides more fun with none of the risk. Life in Buenos Aires is still largely peaceful, especially compared to other South American cities like Caracas and Rio de Janeiro that have borne the brunt of recent economic crises.
"It’s a ’luxury for less’ scenario for travelers considering Argentina right now," said Pauline Frommer, editorial director for Frommer’s, the travel guidebook firm. Travelers "are seeing Argentina as a much less expensive country to visit and they’re not seeing any of the red flags often associated with economic instability."
For tourists, the advantages of a weaker peso are clear at Don Julio, one of the top steakhouses in the world. The 28-ounce T-bone steak, one of the most expensive cuts on the menu, goes for 975 pesos, the equivalent of just $27.
By comparison, Keens Steakhouse in New York City charges $59 for a 26-ounce T-bone steak. Around the corner from Don Julio, a bottle of Rutini malbec wine -- a top brand in the country -- goes for 440 pesos ($12) at a local supermarket.
"It’s great for me," said Michael Kowalski, 52, of Minneapolis, standing outside Don Julio. He said he had great dinners in Buenos Aires for 700 pesos. "That same amount in U.S. dollars in the Twin Cities wouldn’t get you anything close."
There are signs of further increases in foreign tourism as Argentina gears up for the popular Southern Hemisphere summer. Airbnb expects a 60 percent increase in international guest arrivals based on reservations made between August and October compared to a year ago, according to a spokeswoman.
In the past six months, travel booking website Hopper saw a 56 percent jump in searches for flights to Argentina. Kayak, another popular travel site, has also seen a double-digit increase this year in searches for flights and hotels.
Another factor luring foreigners is the arrival of low-cost airfare. The government slashed regulations this year to welcome Norwegian Airlines, which recently started international and domestic routes within Argentina with flights as low as $18.
Steph Darley knows she’ll miss at least one thing when she moves home to Sydney, Australia, next March after a year of study abroad in the Argentine capital.
"I’m definitely going to miss the prices," said Darley, 21, standing outside the Don Julio steakhouse in Buenos Aires. These prices "are a cheap night out for Sydney, but this is a top restaurant here."
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