IVIS Country Analysis – Argentina

ARGENTINA

150,759 Arrivals in the United States

Loss of 13,939 over 2002, -8.5%

21.0% of all Argentine Long-Haul Travel

-14.1% over 2002

SUMMARY

Total outbound travel from Argentina continued to decline in 2003 but by a much slower rate than the previous year, down 1.7 percent over 2002 year-on-year. Long-haul travel grew though, up 6.6 percent over 2002. Yet, arrivals to the United States were still in decline, down 8.5 percent over 2002. This resulted in a decline in the U.S. market share. The U.S. market share indicator (MSI) for 2003 was 21 percent of all long haul travel from Argentina, a decline of 14.1 percent from 2002.

In 2003, Argentina's economy rebounded from recession growing a robust 6.9 percent over 2002, but the unemployment rate remained high at 22.9 percent. Still, real private consumption grew 6.0 percent, year-on-year, while the rise in consumer prices abated somewhat from the year before, up only 13.7 percent. This economic rebound was due to the low exchange rate of the Argentine peso, which had depreciated by more than two thirds in 2002. In 2003, the Argentine peso grew somewhat (4.0%) against the U.S. dollar.

Because the Argentine currency had lost so much value the year before, in 2003 Argentine exports were super-competitive on world markets. As demand for Argentine goods grew, factories that had been closed down reopened, many under the ownership of the workers. Argentina restructured its IMF debt, and is cooperating with the IMF and other investors to maintain payments.

The major challenge for Argentina's continued economic growth is energy. Growth in manufacturing has put pressure on power suppliers to increase capacity. Without growth in electric production, further growth in the manufacturing sector will be stymied in 2004.

In 2003, Spain was the most popular country destination for long-haul travelers from Argentina, with more than one quarter (26.2%) of the market. The U.S. ranked second with 21.0 percent, followed by Italy (17.9%), Cuba (8.1%) and the UK (4.0%). All of these countries gained share in 2003, while the U.S. lost share.

Source: Global Insight

As a region, the United States (21.0%) came in second to Europe, which earned more than one half of the market share (52.6%) in 2003. The Caribbean (19.7%) was also popular among Argentines in 2003. Europe and the Caribbean both gained share, while the U.S. lost share in 2003 over 2002.

Source: Global Insight