Concern in the Hotel Sector Over Winter Holidays: Reservations Do Not Exceed 25%

[earlyretirement]

Concern in the Hotel Sector Over Winter Holidays: Reservations Do Not Exceed 25%

The Argentine hotel sector is facing a worrying drop in bookings for the winter holidays, which in many destinations do not exceed 25% and, in the case of Buenos Aires hotels, barely reach 20%. This situation is causing alarm among tourism business owners, who warn of occupancy rates well below what is normal for this time of year.

The main factors behind this scenario include:

A decrease in international inbound tourism, especially from Brazilian tourists, due to high prices in dollars and currency appreciation.

Increase in outbound tourism: More Argentines are choosing to travel abroad, taking advantage of the “cheap dollar,” which increases the tourism deficit and reduces domestic demand.

Decline in domestic consumption and high fixed costs for the hotel sector, further worsening profitability, especially for small and medium-sized hotels.

Adding to this adverse outlook is a serious complication for air travel during the winter break: The Association of Aeronautical Protection and Safety Technicians and Employees (ATEPSA) has announced a schedule of staggered strikes demanding salary increases, which will affect departures at all airports in the country on key dates in July.

The strike schedule includes the following days and times:

Friday, July 11: 12:00 to 20:00
Saturday, July 12: 15:00 to 23:00
Sunday, July 13: 9:00 to 17:00
Tuesday, July 15: 14:00 to 23:59
Friday, July 18: 16:00 to 2:00 (on July 19)
Sunday, July 20: 12:00 to 22:00
Thursday, July 24: 12:00 to 23:59
Friday, July 25: 6:00 to 18:00
Sunday, July 27: 14:00 to 2:00 (on July 28)
Wednesday, July 30: 12:00 to 23:59

These actions coincide with the school holiday period nationwide, which could lead to massive flight delays and cancellations. The strikes mainly affect aircraft dispatch and departures, although emergency, medical, and humanitarian flights are exempt.

Additionally, there is a possibility that other aviation unions may join the protests, as a joint union meeting is scheduled for July 10 to coordinate further actions, potentially worsening the situation for tourism and national air connectivity.


My firm BuySellBA and I have predicted this drastic slowdown in tourism. Argentina is WAY overpriced. There will be a domino effect because many restaurants/cafes will close. Probably many other businesses too that depend on outside tourism. You would have to be a complete MORON not to see this but many locals try to close their eyes and ignore this fact. Argentina is NOT a first world country and should not have prices like they are one.

 

[Uncle Wong]

Yikes! I was wondering about occupancy rates! I noticed many restaurants in Soho and Hollywood totally dead. I have come down to BA the same time of year before and it was very busy. It looks like a double whammy of both locals and foreigners/tourists staying home. This can't be good for the local businesses.

 

[James Bond]

Wow! Only 20% occupancy in Buenos Aires?!! That is crazy. I know it is winter but even still I don't think it has ever been that low. My girlfriend's family ALL stopped going out to eat at restaurants.

I felt like a lot of people are in denial in Argentina. It is strange to me. All my mates from the UK or EU that come to Buenos Aires and tell me it is shockingly expensive and locals that make less than them all say they don't want tourists or don't need them and they are broke. I just don't get it. I like many things Milei is doing but it honestly feels like a repeat of Caputo before. I cannot see things working out well. Eventually things will crash again like it always does.

 

[Betsy Ross]

Wow! Only 20% occupancy in Buenos Aires?!! That is crazy. I know it is winter but even still I don't think it has ever been that low. My girlfriend's family ALL stopped going out to eat at restaurants.

I felt like a lot of people are in denial in Argentina. It is strange to me. All my mates from the UK or EU that come to Buenos Aires and tell me it is shockingly expensive and locals that make less than them all say they don't want tourists or don't need them and they are broke. I just don't get it. I like many things Milei is doing but it honestly feels like a repeat of Caputo before. I cannot see things working out well. Eventually things will crash again like it always does.

It is very sad to see places I go to very slow. All my friends and even myself have cut back going out. I see less and less tourists. I had no idea it was only 20% occupancy. That is very low. Let's see what happens with the elections in October and leading up to it.

 

[earlyretirement]

Wow! Only 20% occupancy in Buenos Aires?!! That is crazy. I know it is winter but even still I don't think it has ever been that low. My girlfriend's family ALL stopped going out to eat at restaurants.

I felt like a lot of people are in denial in Argentina. It is strange to me. All my mates from the UK or EU that come to Buenos Aires and tell me it is shockingly expensive and locals that make less than them all say they don't want tourists or don't need them and they are broke. I just don't get it. I like many things Milei is doing but it honestly feels like a repeat of Caputo before. I cannot see things working out well. Eventually things will crash again like it always does.

You called it @James Bond and kudos on moving to Spain. I still believe Buenos Aires can be a GREAT quality of life but mostly for people that have savings or income in USD/Euros and are not dependent on a local salary. Also, it is still much cheaper than other places on things like rent and utilities are still a fraction of what they are in other countries.

I think where it hits people the most are other things like dining out and going out to eat. I know my friends in BA this is where it hits them the most. Also, for my friends that have kids and paying for tuition in schools and things like health insurance have also seen a drastic rise in prices.

I do agree many are in denial. I'm a big Milei supporter but I always point out things I disagree with. I've done that for years including on China, the BCRA issues and many other things. I have found there are a lot of Milei fanboys that simply can't say anything negative about him. On the entire Libra scam, they say, "but he wasn't guilty in court". LOL.

It's strange but I have even seen it with smart people that I know. I have a client that invested a lot of money with me after the corralito. A fairly smart guy. He is married to a local citizen and had a kid there. He just commented on one of my X posts that prices are fair and that "brokemads should stay home and how prices were expensive for 10 years before the Corralito". It made me realize how delusional some people are. That 10 year period of 1:1 was NOT realistic and why things collapsed.

Milei is doing a lot of things right but he has strayed very far from his stated goal with the Central Bank. He has done a great job with reducing inflation. NO ONE can do everything perfectly in Argentina and as is often the case, when you fix one thing, another 3 things break. I posted before how most likely most of us won't see systemic change in Argentina in our lifetimes.

I posted this right before the elections when President Milei won. I stand by my opinion that we won't see systemic change in our lifetime. I pray my kids will someday see it or their kids.

 

[Finance Prof]

Damn that is low occupancy. I see all the restaurants mostly dead. Places that had long lead times to get in are mostly able to get in same day no problem. I was surprised my friends from the US were able to get reservations at Don Julio on friday for the same day. They must be hurting. I don't see long lines outside anymore.

 

[Larry]

Yikes! I was wondering about occupancy rates! I noticed many restaurants in Soho and Hollywood totally dead. I have come down to BA the same time of year before and it was very busy. It looks like a double whammy of both locals and foreigners/tourists staying home. This can't be good for the local businesses.

I wish I could say I was surprised but I told all of you that it would end up like this. Just waiting for the eventual crash.

 

[CraigM]

Also, it is still much cheaper than other places on things like rent and utilities are still a fraction of what they are in other countries.

That's the thing - property is dirt cheap for such a big city and rents are even cheaper. If you had $1 million in savings and wanted to move your family to a big city that was safe and purchase a 3br apartment, almost anywhere else you would have to put the whole $1 million down and take out a mortgage (a huge mortgage if it's London or NYC). In Buenos Aires you could buy your place for cash and have $500k+ left over. How many overpriced dinners does that cover, before you even consider the cost of that mortgage and maybe insurance and property taxes?

 

[Uncle Wong]

That's the thing - property is dirt cheap for such a big city and rents are even cheaper. If you had $1 million in savings and wanted to move your family to a big city that was safe and purchase a 3br apartment, almost anywhere else you would have to put the whole $1 million down and take out a mortgage (a huge mortgage if it's London or NYC). In Buenos Aires you could buy your place for cash and have $500k+ left over. How many overpriced dinners does that cover, before you even consider the cost of that mortgage and maybe insurance and property taxes?

Totally agree. Prices went up a good clip since last year but even so they are very cheap. I don't know of any desirable city comparable to Buenos Aires that still has real estate this cheap. When I was in BA, I went to go have drinks with @Johnny and saw his beautiful penthouse apartment and I can't believe how busy it is. Incredible. He told me he is netting a few grand a month which is remarkable. I saw his rental calendar and it's packed solid! I saw a few others in that building he owns in and they were all full.

Rental unit in Buenos Aires · ★5.0 · 1 bedroom · 2 beds · 1.5 baths

Luxurious Penthouse Condo - 1 Bedroom & 1.5 Bath

www.airbnb.com

 

[CraigM]

Totally agree. Prices went up a good clip since last year but even so they are very cheap. I don't know of any desirable city comparable to Buenos Aires that still has real estate this cheap. When I was in BA, I went to go have drinks with @Johnny and saw his beautiful penthouse apartment and I can't believe how busy it is. Incredible. He told me he is netting a few grand a month which is remarkable. I saw his rental calendar and it's packed solid! I saw a few others in that building he owns in and they were all full.

Rental unit in Buenos Aires · ★5.0 · 1 bedroom · 2 beds · 1.5 baths

Luxurious Penthouse Condo - 1 Bedroom & 1.5 Bath

www.airbnb.com

I was just in Rome which has a lot of parallels with BA. Italy is essentially a tale of two cities where the north is industrious and prosperous and the south is not. From Rome on down there is just very little to do outside of government and tourism; nothing works like it should and corruption is rampant. We took a couple of tours and our guides (who were born & raised in Rome) openly discussed how tough it is getting by there; very much a love/hate relationship with the city. Average monthly salaries in Rome are about $1300 and youth unemployment in regions like Sicily are well over 50%. Yet somehow real estate is REALLY expensive. Property prices in Rome are 10x what comparable places cost in BA.

 

[Target]

I was just in Rome which has a lot of parallels with BA. Italy is essentially a tale of two cities where the north is industrious and prosperous and the south is not. From Rome on down there is just very little to do outside of government and tourism; nothing works like it should and corruption is rampant. We took a couple of tours and our guides (who were born & raised in Rome) openly discussed how tough it is getting by there; very much a love/hate relationship with the city. Average monthly salaries in Rome are about $1300 and youth unemployment in regions like Sicily are well over 50%. Yet somehow real estate is REALLY expensive. Property prices in Rome are 10x what comparable places cost in BA.

Interesting Craig. I heard all the bad stuff and things that don't work in Argentina is because so many are from Italy where nothing works! I don't understand how real estate can be so cheap here compared to Rome like you mentioned or Paris. It seems very cheap to me. I am looking to cash in y 401k to buy here and stay here forever. It's paradise here!

 

[PhilipDT]

I was just in Rome which has a lot of parallels with BA. Italy is essentially a tale of two cities where the north is industrious and prosperous and the south is not. From Rome on down there is just very little to do outside of government and tourism; nothing works like it should and corruption is rampant. We took a couple of tours and our guides (who were born & raised in Rome) openly discussed how tough it is getting by there; very much a love/hate relationship with the city. Average monthly salaries in Rome are about $1300 and youth unemployment in regions like Sicily are well over 50%. Yet somehow real estate is REALLY expensive. Property prices in Rome are 10x what comparable places cost in BA.

Well the salaries are piss poor low in Argentina. The economy is in a constant crises here. There are rich and there are poor here but not much of a middle class. Still, mortgages are booming here.

 

[citygirl]

I was just in Rome which has a lot of parallels with BA. Italy is essentially a tale of two cities where the north is industrious and prosperous and the south is not. From Rome on down there is just very little to do outside of government and tourism; nothing works like it should and corruption is rampant. We took a couple of tours and our guides (who were born & raised in Rome) openly discussed how tough it is getting by there; very much a love/hate relationship with the city. Average monthly salaries in Rome are about $1300 and youth unemployment in regions like Sicily are well over 50%. Yet somehow real estate is REALLY expensive. Property prices in Rome are 10x what comparable places cost in BA.

Wow! Is it really 10 x the cost of Buenos Aires? Here it seems like property in new buildings is about $4,000 USD to $4,500 USD per m2 in decent buildings in Palermo. It can't really be 10 x is it?

 

[CraigM]

Wow! Is it really 10 x the cost of Buenos Aires? Here it seems like property in new buildings is about $4,000 USD to $4,500 USD per m2 in decent buildings in Palermo. It can't really be 10 x is it?

For the Rome equivalent of Palermo, nice units (not new) that I saw were $25,000 to $50,000 per m2. Unlike BA you don't see much new construction in Rome, so you have to compare to existing units. We passed by one really nice place that was asking almost $60 million (50 million Euros).

 

[CraigM]

Well the salaries are piss poor low in Argentina. The economy is in a constant crises here. There are rich and there are poor here but not much of a middle class. Still, mortgages are booming here.

There's no middle class in Rome either, and before Italy joined the EU there were constant crises and governments replaced every other year. I remember going to an ATM in Milan right before the Euro was introduced and the minimum I could take out was 40,000 Lira which was maybe $25 at the time.

 

[Blockchain]

For the Rome equivalent of Palermo, nice units (not new) that I saw were $25,000 to $50,000 per m2. Unlike BA you don't see much new construction in Rome, so you have to compare to existing units. We passed by one really nice place that was asking almost $60 million (50 million Euros).

Wow crazy! And are they moving @CraigM? Did you see any properties or just see them in the store window? I think it is fun window shopping when I'm in Europe as they have signs in the windows like the real estate offices in Buenos Aires all over. I wonder how often those properties move in Rome? While in BA I was there a few weeks and several of the properties I saw in the window in a Palermo Soho realtor were all sold by the time my trip ended a few weeks later. The market seems like it is moving in BA.

I went to a developer's pozo and many units were all sold out fairly quickly. Some projects that are years from being done are more than half sold.
@CraigM didn't you buy in a pozo IIRC? How is that going? Are sales going well?

 

[earlyretirement]

For the Rome equivalent of Palermo, nice units (not new) that I saw were $25,000 to $50,000 per m2. Unlike BA you don't see much new construction in Rome, so you have to compare to existing units. We passed by one really nice place that was asking almost $60 million (50 million Euros).

Yes, honestly properties in many European cities are VERY expensive. I have friends in many EU capital cities and very expensive. Real estate in prime cities will always go up over time. Always. It may have some correction years but over the long haul it will always go up. And if you're buying in the most desirable neighborhoods, you will always have demand for it by locals or by wealthy foreigners (corporations, tourists, cosmetic surgery patients, etc).

 

[CraigM]

Wow crazy! And are they moving @CraigM? Did you see any properties or just see them in the store window? I think it is fun window shopping when I'm in Europe as they have signs in the windows like the real estate offices in Buenos Aires all over. I wonder how often those properties move in Rome? While in BA I was there a few weeks and several of the properties I saw in the window in a Palermo Soho realtor were all sold by the time my trip ended a few weeks later. The market seems like it is moving in BA.

I went to a developer's pozo and many units were all sold out fairly quickly. Some projects that are years from being done are more than half sold.
@CraigM didn't you buy in a pozo IIRC? How is that going? Are sales going well?

I'm not sure if they're moving in Rome, I just poked around a bit while there and sometimes looked up a place we passed by if the building looked nice.

We did buy in a pozo through BuySellBA. Prices keep going up but I haven't asked how sales are going. It won't be completed until late 2027 at the earliest, so I don't think about it much especially since we bought in so cheap.

 

[CraigM]

Yes, honestly properties in many European cities are VERY expensive. I have friends in many EU capital cities and very expensive. Real estate in prime cities will always go up over time. Always. It may have some correction years but over the long haul it will always go up. And if you're buying in the most desirable neighborhoods, you will always have demand for it by locals or by wealthy foreigners (corporations, tourists, cosmetic surgery patients, etc).

Very true Mike. A friend of mine from London said he's only seen two kinds of home prices there "high and higher".

 

[MikeYoung]

I'm not sure if they're moving in Rome, I just poked around a bit while there and sometimes looked up a place we passed by if the building looked nice.

We did buy in a pozo through BuySellBA. Prices keep going up but I haven't asked how sales are going. It won't be completed until late 2027 at the earliest, so I don't think about it much especially since we bought in so cheap.

Darn! A lot of people hire @BuySellBA to purchase. I saw an X post they are buying about 3 to 5 properties each week. It is a lot of properties. I wonder if they are all pozos. I read about a huge renovation of a PH. I can't wait to see how that turns out.

@CraigM do you mind if I ask you when you bought it? What was the m2 price then? What is it now? How much did it go up?