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‘Tourism sector requires strong capital investments’

Interview - May 29, 2017

The incoming Mauricio Macri presidency has put high expectations on recovering Argentina’s tourist sector as a pathway for foreign and local investment to spur job growth in such a labor-intensive industry. The new interest opens up opportunities for both startups and legacy companies. Claudia Álvarez Argüelles is at the helm of one of Argentina’s most prominent hospitality companies. Originally started by her parents, she has continued the company’s 60-year-history of innovation and attention to detail, and today grooms her son to continue to walk the balance between traditionalism and modernity in what is likely to be one of Argentina’s highly lucrative and competitive industries.


Since Argentina returned to the international capital markets, international investors have awakened to the economy’s potential. As a businesswoman who has participated in international forums on investment in Argentina, what is your perspective on the reception of Argentina’s reforms?

Strategic economic partners to Argentina, such as Spain, graciously receive the change in Argentina and the recovery of the international relationship. This is a key issue because in business, the trust in Argentina our ability to honor our agreements will be critical to build economic partnerships.  I was a member of the business delegation of President Mauricio Macri’s state visit to Madrid, and one could see the recovery of the bilateral relationship. Members of the Spanish government were keen to point out the consolidated importance of Argentina’s rule of law and the independent judiciary. The atmosphere in the forums communicated that now is the time to invest in Argentina due to the great opportunities that can be found here.

The president and his ministers highlighted the many qualities and talents of the Argentine workers and businesspeople. Despite the major challenges which our people face, we have been able to overcome them as Argentines are regarded today as adaptable, resilient, creative, and hardworking. This creates a great business environment for foreigners to come to and work.


What conditions are necessary for strong growth in investment in the tourism industry?

The tourism sector requires strong capital investments, which is why it is essential for business to be able to gain access to credit to finance their projects.  Argentina’s tourism sector must see investment from both the private and public sector by growing their businesses through sensible credit, and through the public sector by providing credit opportunities and promoting new destinations. This process – albeit nascent – is underway for the sector, and the outlook for growth is quite positive.

Regarding the public sector, there are several investments which must be done in order to catalyze the growth of this sector: first and foremost is better connectivity throughout the entire country. To this regard, the government has approved 135 new air routes and the introduction of low-cost air carriers to the country. This is extremely well-received in our sector as the government’s goal of reaching 22 million air passengers a year in Argentina within the next three years will mean far greater opportunities for both foreign and domestic travelers. The point-to-point market will make it far easier to travel throughout Argentina and combine various destinations according to the unique preferences of each traveler.

Tourism is a critical sector for the Argentine economy because it encompasses so many different skill sets and transverses all levels of necessary education among its employees, without strict regulations for academic qualifications due to the diverse range of employment opportunities.

How will you and the sector adapt to the new business environment as the tourism sector opens to the international market through elimination of the value-added tax for foreign travelers and the introduction of low-cost airlines?

We see more opportunities than challenges. At Álvarez Argüelles we seek to innovate in the universal language of tourism which is technology.  Connectivity and technological innovation is critical to our product, and we fuse this with an attentive personal touch and quality care as Argentina broadens and diversifies its international tourist palette.


How will Álvarez Argüelles be competitive in this new environment?

We have planned our growth in the most important cities throughout Argentina’s provinces, for both business and leisure travel: 2017 has seen the opening of new properties in the cities of Santa Rosa, Salta and Rosario.

At our company, we are not intimidated by competition; we see it as an opportunity to grow. We know our business, and we have an established business acumen and we develop our human resources.

The business has become “democratized” through the internet due to the consumer’s ability to access diverse options through search engines and reviews. This creates greater pressure and incentive to offer a top-quality product and attentive service – to be innovative and modern.


How do you balance being traditional and innovative?

Ever since the foundation of Álvarez Argüelles Hotels over 60 years ago, we consider innovation to be part of our company’s DNA. We approach our business from the guest’s point of view to offer a better product and service.  This has guided our business’s growth throughout our history.  Today, our information technology department is integral to the structure of our company, giving not only IT support but creative ideas to advance our product with more technology.


How has your business been affected by the greater diversity of the market with introductions such as Airbnb?  How have you adapted to these changes?

We recognize that tastes are changing and some of today’s guests are looking for something different than the typical hotel experience, and want more a home setting. We therefore created a brand within our company that offers more long-term, personal stays: FLAAT.  However, while we are adapting to these tastes, we still insist that there be a level playing field, and we insist that Airbnb and all companies in the hospitality industry operate under transparent, fully documented procedures which respect employee rights and exercise social responsibility, just as we do.


How has your company been impacted by the change in government in Argentina?

The decline in tourism over the past few years which affected our business.  The new government’s policy of integrating Argentina with the global community and economy can only bring benefits to our industry. We are therefore continually investing in product improvement and innovation.


What is Álvarez Argüelles’s position regarding corporate clientele?

While our flagship Costa Galana property in Mar del Plata hosts many corporate conventions, I have still been a strong proponent in the establishment of a convention center for the city. Far from seeing this as competition, I believe this will spur new business for both business and leisure travel.  Mar del Plata is second only to Buenos Aires in number of hotel rooms, and there is room for growth.


Interview by Nicolas Carver, follow him on Twitter at @WorldTempo