In a trend line that is otherwise inexplicable according to standard analytics, Argentine consumers have been traveling internationally and overseas in steadily growing numbers for more than a decade and appear to be expanding their numbers for the foreseeable future, including 2018. Within three years, the country should, according to a forecast by the U.S. Department of Commerce’s National Travel and Tourism Office (NTTO) send more than a million visitors a year to the USA and become the No. 10 overseas source market for the United States. In the meantime, Argentine travelers will spend more abroad even as its currency, the peso, has declined by more than 60 percent against the dollar over the past five years.
Despite the increase (in value) experienced by the dollar every day, reported REPORTUR.com.ar, a travel trade news site, Argentine tourists abroad are spending more abroad on shopping in a trend that should increase in the summer of 2018. The following table illustrates how, since 2003, there has not been a year-on-year decline in the number of visitors to the United States, as well as forecast data from NTTO indicating that year-on-year increases will continue through 2021.
“Argentina is preparing for a new ‘boom’ in the levels of outbound tourism as the high season of 2018 approaches,” said the publication, adding, “and this is confirmed by some top firms surveyed by REPORTUR—Catch It, Avantrip, HotelDo, Top Dest—that contemplate a strong growth for the coming year.”
One factor driving the increase is the growing practice of many Argentines to finance a trip by paying for in installment payment plans that range from 12 to 18 months—a practice that has long been in place in Brazil. As for spending abroad, Argentineans’ expenditures abroad have been at such high levels that government officials are concerned about the size of the deficit they expect will result from greater spending by its citizens traveling abroad than the amount of spending by international visitors to Argentina.
As the chart below, the Argentine peso has declined dramatically vs. the U.S. dollar over the past five years—from a high of $0.20 five years ago to about $0.05 recently—a 75 percent decline. It should be pointed out that the exchange rate was relatively stable for most of 2016 and 2017.
Currency exchange rate (Argentine peso vs. U.S. dollar) as listed from Jan. 1, 2013 to Dec. 31, 2017)
In trying to explain the situation in Argentina, INBOUND’S 2018 Outlook for Top Overseas Markets put it this way: “One factor that changed the economic environment was the election in December 2015 of a new president, Mauricio Macri, former mayor of Buenos Aires. Even though Argentina’s economy continued to function during the “blue dollar” days, it has really prospered in the past two years and, along with it, the outbound tourism industry has prospered as well.” For 2018, INBOUND has forecast a 5 percent increase in the number of visitors from Argentina.