Argentina: study shows that the tourism sector is facing an accumulated deficit of almost USD 30 billion

24-02-24

This situation, although partially mitigated by the influx of foreign tourists this summer, marks 13 years of negative balances in the relationship between income and foreign currency outflows. A recent analysis, based on official and private sources, indicates that the tourist movement during the two-month period December-January decreased by 13% compared to the previous year, reaching the lowest level in the last eight years, except for the summer of 2021 affected by the pandemic.

The study by Marcos Cohen Arazi and Bautista Martina Baldi, researchers at the Ieral of the Fundación Mediterránea, highlights that, despite the overall decline, the participation of international tourism has helped to soften the fall. During the November-December-January quarter, the percentage of foreigners staying in hotels averaged 38%, up from 32% in the same period last year. In addition, employment in the tourism sector still remains 9% above pre-pandemic levels, especially standing out in provinces and localities with strong tourist links, although they warn about a possible entry into a risk zone.

The report also reveals that, despite an increase in the arrival of foreign tourists and a reduction in the departure and expenditure of Argentine tourists abroad, it is estimated that 2023 closed with a sectoral foreign exchange deficit of close to USD 1.5 billion. This continues the trend of annual deficits that began in 2011, totaling USD 29,958 million in the red through 2023, despite Argentina's tourism potential, the limited international spending capacity of its population, and the country's relative affordability for foreign tourism due to the weak peso.

The authors point to accelerating inflation and economic uncertainty as factors behind the worst summer tourism performance in the last eight years, excluding the first pandemic summer. However, they hold out hope for an improvement in February, supported by Google Trends data indicating a rebound in interest in tourist destinations.

International tourism, according to the study, has shown an upward trend, with preliminary estimates suggesting inbound tourism revenues close to USD 5.5 billion in 2023, one of the highest in the last decade. In turn, the more moderate growth of outbound tourism has helped to reduce the sectoral deficit, which in previous years had reached peaks of up to USD 6 billion.

In terms of employment, tourism has been an outstanding generator of formal jobs, with employment exceeding pre-pandemic levels by 9% as of last October. However, the report warns about the possibility of a slowdown in job creation, depending on the evolution of the sector and medium-term expectations.

Finally, the study reflects the importance of closely following the situation of the tourism sector, both for its performance in the remainder of the summer and for its prospects in the new economic context, highlighting the relevance of tourism as a source of income and employment in different regions of the country.