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Inter-Continental Buenos Aires hopes to capitalize on devaluation
Seis Continentes / July 2003

By Larry Luxner

In less than a year, Buenos Aires has gone from being one of the world's most exensive cities for tourists to one of its cheapest. And that's done wonders for business at the 317-room Hotel Inter-Continental Buenos Aires.

Alvaro Rey, the hotel's general manager, said the Argentine capital is "in fashion" with foreign visitors, now that one U.S. dollar can buy three Argentine pesos after years of parity between the two currencies. While that hasn't helped the porteños oo much, it has made Buenos Aires a very inexpensive city to visit, with local taxi rides rarely costing more than $2.00 and a decent meal now available for under $10.00.

As a result, the Inter-Continental — whose average room rate is $111 — finished April with a 67% occupancy rate, down from 72% in March.

"This is incredible, considering that last year, average occupancy in the city was 42%," said Rey. "This year, five-star hotels are running an average 52% and we're way over that, mostly because of the tourism we have been able to capture."

Rey, a native of Colombia, said that before the devaluation and ensuing economic chaos that has shattered Argentina, bona fide tourists represented less than 0.1% of the hotel's clientele; virtually all its guests were business executives and conventioneers.

Today, tourists occupy 27% of all rooms at the Inter-Continental.

"A new opportunity for Argentina has opened up, which nobody realized at the beginning," he said. "Everybody was so worried about the devaluation and what was going to happen with the country. Yet we have to start thinking about how to take advantage of this new situation."

To that end, back in January 2002 Rey invited local hoteliers to the Inter-Continental for a dinner to discuss the importance of a joint tourism promotional effort.

"Unfortunately, it wasn't successful because we couldn't get the hotels to agree on anything," he said. "My idea was to make a video of the city and invite journalists, travel agents and airline representatives to Argentina. Of course, I knew it was very difficult to bring people down here with all the negative press coverage we were getting. The other hotels just didn't want to work together, so we decided to work by ourselves."

Finally, the Inter-Continental decided to attract visitors from other South American countries.

"We have one theory, and the Ministry of Tourism had another theory. Since the devaluation, they've been focusing on people from the rest of Argentina, as well as the Brazilian and Chilean market," he said. "I don't agree with that. Chile and Brazil are the two closest neighbors of Argentina, and they already know this country. Places like Mexico, Colombia, Ecuador and Peru are farther away. People from those countries couldn't visit Argentina for the last 10 years because it was too expensive."

His theory is that unlike Brazilians, who might come to Buenos Aires for a weekend, people who have to fly six or seven hours to get to Argentina will probably stay in his hotel for seven, eight or nine nights.

"They have never visited a tango show, so they'll go not only to one, but two or three. They'll go to Teatro Colón to see an opera or ballet. They'll go every single night to a different restaurant. Plus, it's cheap now, so they'll go to every single shopping mall and buy leather like you can't imagine."

Thanks to the tourist boom sparked by a cheaper Argentine peso, the Inter-Continental's revenues will jump 30% over last year's. Gross operating profit will also rise, from 26% last year to 45% in 2003.

"Tourism will remain as the main source of business for now, though the new opportunity for Argentina is in conventions and incentive travel," he said. "Big companies like banks and pharmaceutical giants used to do their incentive travel in Mexico, Aruba, Puerto Rico, etc., but not in Argentina. Now they can," he said. "For a Latin American, this place is fantastic. Architecturally, it resembles Madrid. It's very charming. There is far more culture here than you could get at a beach convention."

Rey said he's also scouting out tourism business in the United States — primarily the Miami, Chicago, Dallas, Washington and New York markets — and in Europe, mainly France, Germany and Italy, though business won't really start moving until year's end.

Helping his quest is the hotel's selection last March as the recipient of an Ultimate Service Award. This honor, given by CNN Partner Hotels, American Express, Continental Airlines, Ing Media, Taylor Nelson Sofres Hospitality & Leisure and Villery & Boch, was given to nine hotels around the world; the Inter-Continental Buenos Aires was the sole recipient in South America.

""We felt a great emotion and satisfaction when we received this award," said Rey, noting that the achievement "recognizes the work of a great team and the effort of professionals of every area of the hotel, which continuously trains its 210 employees to improve quality and productivity."

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