LATAM e-News – Special Edition Argentina
Interview: José Gustavo Santos
José Gustavo Santos
Minister of Tourism of Argentina
1-What are the strategies proposed by your Ministry and the objectives for the next five years?
Our 2016-19 Comprehensive Management Plan, which we presented together with the President, the provinces and the national private sector in April 2016, describes our objectives and strategies for the coming years.
The Plan, after stating TOURISM contribution to the country’s economy estimated at 3.8% of GDP – $ 167,284 million in 2015 -, its strategic role for the growth and development of REGIONAL ECONOMIES where, unlike other sectors, 95% of Internal tourist spending takes place outside the City and Greater Buenos Aires, and its role in job creation representing 5.4% of the total national employment, presents a situation diagnosis to know the starting point, a diagnosis that shows a stagnant demand below levels of 2011 in international tourism and of 2012 in domestic tourism in terms of travels, and it also shows a steep drop in overall average spending of -24% since 2008.
Our Plan proposes to “GENERATE 300,000 JOBS BY 2020” in 5 strategic guidelines, reaching 9 million foreign tourists (+ 50%), raising their spending to US $ 8,000 million (+ 90%) and reaching 70 million national tourists (+ 47%) that will translate into $ 170 billion (+ 58%) in the country’s regional economies.
One important fact that I would like to highlight is that since December, TURISM has become part of the government’s Economic Cabinet, constituting one of the key economic sectors for the country’s growth, with special emphasis on its REGIONAL ECONOMIES, thus contributing to one of the three priority objectives, ZERO POVERTY, through GENERATION OF EMPLOYMENT , taking care of, protecting and enhancing the country’s cultural and natural heritage.
2-What is the growth observed in your government area since the beginning of your administration?
As a result of strong teamwork with all areas of government, in August 2016 we grew again after 17 MONTHS with red numbers in international arrivals by air, and from there we continued to grow steadily until today.
In 2017, in the first 5 months we grew 4.6% in the arrival of non-resident tourists by air, as a result of our strategy of promoting and diversifying the tourism development of the country. Growth was more distributed in the national destinations, thus, Ezeiza and Aeroparque grew 2.9%, and destinations such as Salta grew + 79.8%, Rosario + 56.4%, Cordoba + 45.1% and Mendoza 22.5%. Through the “airplane revolution”, as called by Guillermo Dietrich, Minister of Transport, with whom we work side by side to achieve this, this will be and increasing trend covering more and more destinations of the country thanks to the improvement in CONNECTIVITY at internal, regional and international levels. Without CONNECTIVITY there is no TOURISM. You do not get where you cannot go.
Regarding hotel industry, undoubtedly a relevant area for SAHIC participants, these results had a positive impact during the first four months of 2017 (January-April). We grew + 3.8% in overnight stays (678,000), 2.1% in rooms sold (177,000) and + 11.7% in hosted tourists (781,000) according to data from the EOH-INDEC´s Survey of Hotel Occupation-Ministry of Tourism. According to STR data, in the first half of 2017 (January-June), while ADR (average rate) increased in line with inflation, occupation in Argentina grew 8.7%, and markets such as Cordoba and Mendoza grew at higher levels: 11% and 10.3%.
In summary, based on the improvement in CONNECTIVITY in terms of higher supply and better prices, I am convinced that we will continue to see positive numbers.
Source: Encuesta de Ocupación Hotelera (EOH) – Indec-Mintur
3-What is the total private investment since 2015? Could you mention what projects are underway during your government and what is the expected growth?
Currently, there are projects and investments totaling over AR $ 56,000 million, 35% are in investments in Tourism Accommodation for $ 19.5 billion, and since the arrival and establishment of new Airlines to the country, almost 50% is the projected investment estimated at $ 26.76 billion.
In addition, there are investments in Transport for $ 3,995 million, in ski centers for $ 1,255 million, in Conventions Centers for $ 1,728 million, in Thermal Centers for $ 1,162 million, in Wineries for $ 225 million and in other categories such as Museums, Shopping Centers, Cultural Centers, among others, for $ 1,458 million.
In terms of investments, our objective is to invest from the public sector in the development of infrastructure in the different destinations with the purpose of generating the conditions for the private national and foreign investment, working side by side, as “strategic partners”, as a team with potential investors, in order to make the projects happen.
4-What are the main incentives for investment in hotels and tourism? How can current financing be obtained?
Each province and the city of Buenos Aires have a legislation that favors tourism investments in the industry, incentives in tax exemptions, financing and availability of fiscal land for tourism development. We work in permanent contact and coordination with their teams identifying and developing a bank of projects and in the design of incentives to stimulate the establishment of new investments.
From the Ministry, each year we develop the “Guide to Incentive Schemes for Tourism Investment”, compiling all the opportunities province by province, a key tool for every investor. The guide can be downloaded from the this link.
In addition, we develop agreements with financial institutions and other organizations, through which we subsidize points of the interest rate of the lines destined to tourist investments. As an example, we subsidized 3 points of the interest rate of BICE-Banco de Inversión y Comercio Exterior, our public development bank, for large projects, as well as between 3 and 4 points on Line 400 of the BNA -Banco de la Nación Argentina for small and medium-sized companies.
In all cases, we work in close relation with financial institutions to meet the financing needs for each project, in many cases developing custom solutions.
5-What does it mean for industry the reopening of Argentina to international markets?
One of the clearest impacts of the reopening of Argentina to the international markets is seen in the CHANGE OF THE TOURIST PROFILE: the high-spending tourist is arriving again to Argentina. Growth data for arrivals by air for the first 5 months of 2017 (January-May) for “travel purposes and average expenditure” and “type of accommodation” is showing that. Tourists for business, congresses and conventions purposes grew + 14.6% and spent 12.8% vs 2017 and those who arrived for vacations and leisure grew + 8.3% and spent 5.6%. Also, according to the “type of accommodation”, those who stayed in hotels of 4 and 5 stars grew by 11% and + 9.1% who stayed in hotels from 1 to 3 stars.
Argentina is among the top 20 of the world’s meeting tourism destinations, ranking # 19 in the 2016 ranking of ICCA-International Congress & Convention Association (we climbed 4 positions compared to 2015). And the City of Buenos Aires ranks # 1 in America for 8th consecutive year surpassing cities like New York, Mexico, San Pablo, Lima, Rome, Hong Kong and Tokyo, and it was one of the 3 cities of the world with greater growth with 21 events more than in 2015. But besides Buenos Aires there are 33 Argentine cities that make up the ICCA ranking, and according to the OETR-Economic Observatory of Tourism of Meetings the activity generated US $ 1,100 million in 2016 involving more than 275 cities in the country, mobilizing 10 million people who participated in 4,891 tourism events throughout the country, generally in the off-season, boosting activity in regional economies and acting as promotion tool and guaranteeing future visitors. This segment has a strong impact in the hotel industry due to its high spending power, which is 3 to 4 times that of a tourist and because in the low season.
In April this year, Argentina hosted WEF Latam for the first time. In November, it will host the ILO IV World Conference on the Sustained Eradication of Child Labor, and in December it will host the WTO Ministerial Conference, being the first South American country in hosting the meeting of Trade Ministers. During 2018 the country will host the G20 meeting in different destinations of the country, Buenos Aires will host the Youth Olympic Games from 6 to 18 October and in November the G20 Summit of Presidents.
6-What are the main measures to promote international tourism? What are the targeted markets?
From the beginning of our administration, in line with the objective of achieving an “intelligent insertion into the world”, we focused on 3 priority aspects to encourage International Tourism: FACILITATION, CONNECTIVITY and COMPETITIVENESS.
For FACILITATION we removed the reciprocity fee with the US in March 2016 after the visit of President Barack Obama, and on July 1 of this year we did the same with AUSTRALIA, and in the next few months we estimate to do the same by removing the reciprocity fee with CANADA.
Through the Promotion Plan of INPROTUR-National Institute for Tourism Promotion, our international tourism promotion agency, we identified 16 high-spending target markets after a market intelligence study, including 2 that according to World Bank data by 2030 will concentrate over 40% of global travel expenses: China and India. Since September 1, 2016, the AVE-Electronic Travel Authorization in China is in force, which allows that among the 7 million Chinese who are already tourists, those who already have a visa in the Schengen area or the US can follow an electronic procedure in the Migration site to obtain in 4 to 7 days maximum their authorization to travel as tourists. We are extending this same procedure to India. And in parallel, we are preparing our destinations and services for these markets.
Regarding CONNECTIVITY, we have held, and still hold, meetings with more than 30 international airlines that were not present in the country, and we managed to increase seats by 9% in 2016 and 19% during the first 6 months of 2017 compared to 2015. The new Air Europa Madrid-Asunción-Córdoba route in 2016 and the announcement of the new Madrid-Rio-Iguazú route from May 2018, together with the announcement of UNITED’s new daily frequency from New York- Buenos Aires from October 2017 and NORWEGIAN´s flight London-Buenos Aires from February 2018, are some concrete examples.
In relation to COMPETITIVENESS, and again more related to the hotel industry, the measure of VAT Refund (21%) in accommodation for foreign tourists in force since January 2, 2017, greatly contributes to improve our competitiveness and foster international tourism .
7-Where are the best opportunities for development of hotels and tourism investment within the Argentine territory? Are there new niches for development?
Each destination and province represents development opportunities based on the growth in domestic and international demand that we set out to achieve. Argentina has nationally and internationally positioned destinations and other areas of high development potential that we are working on. From there we seek to consolidate the former and develop new investment poles.
The new development areas are in the “Coastal Ecotourism Corridor” connecting Iguazú and Saltos del Moconá in MISIONES, the Esteros del Iberá in CORRIENTES, the Impenetrable in CHACO, the La Estrella Marshland in FORMOSA, a destination with the largest biodiversity in the region presenting investment opportunities for hotels and river cruises. Also in northern Argentina, the “PUNA Sudamericana” connecting Atacama in CHILE, Uyuni in BOLIVIA and Humahuaca in ARGENTINA are other areas with great potential, as is the “Jesuit Route” connecting ARGENTINA, URUGUAY, BOLIVIA, PARAGUAY and BRAZIL. On the other hand, in the same line, the north of Córdoba, including the Sea of Ansenuza and the Cerro Colorado, acts as a connector between tourism from Talampaya – Ischigualasto, directed through the Camino Real to the North of the country, arriving in Jujuy.
In the south, under the Patagonia Project, we are working on strategic initiatives for territorial development.
Another area of development is the positioning of rivers as natural resources and opportunities for the development of local communities, launching the river corridor of the Paraná River through the development of river cruises, catamarans and nautical sports tourism.
In short, there are many opportunities and new niches for development, and all have a common goal: “to position Argentina as a “destination of nature”, what I usually call “roduction of nature “, which is precisely what the world fastest growing and high spending markets demand.
The best platform for the development of investments is facilitated through the federal and territorial approach in coordination with all areas of government, at national, provincial and municipal level, through public investment to generate the conditions of infrastructure and competitiveness for private investment.
8-What does it mean for you to host SAHIC South America, which again has Buenos Aires as host city for its 10th edition? What are your expectations for this edition?
It is a great opportunity to present to the national and foreign investors the “new areas of development and investment” in the country. I really look forward to having the opportunity to work side by side with my team, as strategic partners, to make projects happen.
Our government is proactive in investing, an ally to activate your investments, facilitating procedures, lead times, comprehensive advice and federal support working as a team with our Investment Agency and all areas of government.
Argentina has definitely reopened to the world. We want to be the most friendly country in the world in terms of tourism and business, hence our statement “Argentina WORLD FRIENDLY” which in business terms translates into “Argentina BUSINESS FRIENDLY”.
It’s the time to invest in Argentina. There is a team, a plan and facts that are already showing results. This minister and his collaborators are at the disposal of anyone who wants to grow with us.
José Gustavo Santos is a Bachiller Nacional, awarded with a Gold Medal in his class, Bachelor and Prof. in Letters of the Universidad Nacional de Córdoba, Facultad de Folosofía y Humanidades. He studied Magister in Business Administration UCC, Public Management of Tourism A.E.C.I in Andalusia, Spain, and holds a master’s degree in State Policies UCC / Georgetown University Washington.
From December 2007 until December 9, 2015, he was President of the Córdoba Tourism Agency of the Government of the Province of Córdoba, Member of the Board of Directors of INPROTUR (Tourism Promotion Institute), Secretary of Tourism of the Nation and Vice-President of the Tourism Federal Council and Member of the Scientific Committee of the Algarve Forum, World Tourism Organization (WTO).
His professional experience is also remarked by his position as Director of Youth Promotion (Córdoba, 1985), Director of Cultural Action for the country`s inland (Córdoba, 1986), General Director of Culture of the Province of Córdoba (1987-1991), Undersecretary of Culture, Education and Tourism (Municipality of Córdoba, 1991-1995), Secretary of Government (Municipality of Córdoba, 1995-1999), Provincial Legislator (2004-2007), Vice-President of the Tourism Commission, and Member of the Executive Committee of the Joint Parliamentary Commission of Centro Córdoba Region (2004-2007).
At present, he is the Minister of Tourism of Argentine Republic.
To know more about Ministry of Tourism of Argentina, visit turismo.gov.ar