Exclusive hotels are going out of business?

[BlahBlah]

I dont think he dropped his rates. He did tell me it is hard to know what is really going on as during a normal year it can be up and down quite a bit. An example is xmas, where he usually is full from the week before xmas, up until the week after new years, then it can be dead, 1/2 full or full, just depends on the year. Same with this time of year, can be dead as now, or busy with people passing through on way to warmer places like peru or brazil.. But he thinks the trend is a lot less tourists, and is the worst he has seen since before the 2000 crisis. He thinks swine flu fears, the financial crisis and the cost (inflation) of argentina now is all having an effect.
I myself find argentina expensive compared to NZ/AUS.. when i first arrived in 2007 is was cheaper. All this has happened since mid 2008, when NZ$ and AU$ dropped by 30 to 40% against the US$, which the peso didnt, and has only really started to drop in last six months, because the gov controls the value of the peso. Arg is a commodity exporting country like Aus, NZ, Brazil, South Africa and Canada, which all had big currency drops against the US$ due to commodity prices dropping. The peso didnt drop, so it became more expensive to travel here. The only consolation for me is that my flight from NZ in march 2008 was about (NZ$2300) US$ 1900 at the time, this year it was US$650 (NZ$1200), due to a lot less passengers and the drop in the NZ$ - it dropped from US$0.82 to US$0.50 in 6 months - has since recovered to around US$0.65. The peso went from around 3 to 3.20 pesos to the US$ in that same period.
The plane was also 1/2 full in march 2009, where last year it was full. This route from NZ is very popular with backpackers as they travel through Asia, then around Aus and NZ, then head to South America on their world tour.

I can only talk about the London - BA flight and it seems to be they are still running on almost full capacity but I took the last flight about a month ago and I saw mainly locals(Argentine-Brazilian) and very few foreigners, this was the other way around in 2007-2008

About the rates it did go down a bit and it seems to me that BA can only charge 600 pounds now when a year ago they easily could sell tickets for 800-900 pounds. Fuel charges are still high and I need to touch the ground 3 times before hitting Ezeiza so taxes are still pretty high

 

[mini]

It's because it takes about a year for an Argentine to come to terms with reality(8 months of dropping tourism, with june and July up who will be hit with Swine flu)

The other reason is that most Argentines don't have the appartments as there primary business, it's only to be secure against inflation and economic crisis, for not having cash at home and money laundering. They are happy if they don't get a negative result(cost - income) It's also better to rent out your appartment for 4 months at a premium then 8 months at a discount (or selling 2 beers for 25 peso, instead of 5 for 5, that way you will increase your rentability and you know an Argentine wont spend more then that 25-35 peso so make the beer expensive)

This will change however because cost are still raising fast and the demand is way down. There will be many people who have to lower there rates or facing economic hardship.

I don't just mean in apartments & hotels & luxury goods. I mean in everything, especially used things, things at the pulgas, or second hand shops, etc. If you bought a some tables a year ago, the cost of your table hasn't gone up. Why is the table cost so much more this year. Since it clearly hasn't been sold. The price should go down. Not up.

 

[BlahBlah]

Did you make an offer?

It all has to do with (lack of) competition and raising cost

 

[davonz]

Flights: I do a lot of flying. I went to Shanghai a month ago, plane was just about 50% full, this is down on last year, but they have also cut the number of flights per week, from everyday to 4 times a week, so not only have the flights decreased by 40 odd percent, but also the passenger loading on each flight is down - so now there is approx 70% less passengers flying on that route compared to what it was a year ago.
When i flew from Sao Paulo to Zurich, the plane was 3/4 full, this is down on last year too. I am flying back on 10th aug, i have just checked the flight today, the flight is now over book by about 20%, they always do this on this route as the brazilians have a habit of not turning up for their flights, but also the number of flights to brazil has been cut back too. The reason the flight is full is because there are so many south americans returning home because there is no work in europe for them. Spains unemployment is now 20%, so the first people to get laid off are the foreigners - eg Argentines, Chilians etc.. so they are on the flights home, which is keeping the flights full..

Inflation: Because argentina is a closed economy compared to alot of countries, products do not flow as easily or quickly across its borders. Because of the drought, there has been a storage for dairy, meat, friut and veges.. This is not usually a problem because a country will import the short fall, but argentina doesnt do this as much, the prices increase, which then the people need increase in wages to afford the same as they could afford a year ago. The producer then needs to put up prices to pay the extra wages, and before long it becomes an out of control upwards spiral, which is where argentina is at the moment. Inflation is at around 30% or more a year. The gov says its only 9% because it has inflation indexed debt. If the base interest rate on the debt is 10% they also have to add the inflation number to that, so it would be 10 + 9, and they would pay 19%.. instead of what the true rate should be of 10 + 30%.

 

[katti]

Today there was an article in our national paper, saying that "5-star luxury is on sale". Hotels like Negresco in Nice, Splendido in Portofino,... lowered the room prices drasticaly or they give their guests for example a 100€ reduction in their restaurant. July - august is top season there! Normally you those hotels are so full you can not even book in this period.

It is not just in Argentina. It is everywhere in the world.

But if you want to enjoy these relatively "low" prices, you must contact the hotel directly and not go through agents. (they usually get fixed prices and can not be so flexible)

 

[katti]

We always fly with Air France. Until last year the flights were always completely fully booked, and as we have a high miles card, we got an upgrade to business (for free) on 1/3 of our trips. Since the financial crisis has started the planes are no longer full-full. Still crowded, but never full. It has been about a year since we had an upgrade.

Our flights at easter were still 1250€, and the ones booked for next week 1100€ - but last month my husband fly for 660€. There are a lot of Argentines living in France that are going to Argentina for the schoolholidays. They keep the prices relatively high. My brother wanted to visit us for next christmas but tickets are 2500€...he changed his destination

 

[BlahBlah]

Flights: I do a lot of flying. I went to Shanghai a month ago, plane was just about 50% full, this is down on last year, but they have also cut the number of flights per week, from everyday to 4 times a week, so not only have the flights decreased by 40 odd percent, but also the passenger loading on each flight is down - so now there is approx 70% less passengers flying on that route compared to what it was a year ago.
When i flew from Sao Paulo to Zurich, the plane was 3/4 full, this is down on last year too. I am flying back on 10th aug, i have just checked the flight today, the flight is now over book by about 20%, they always do this on this route as the brazilians have a habit of not turning up for their flights, but also the number of flights to brazil has been cut back too. The reason the flight is full is because there are so many south americans returning home because there is no work in europe for them. Spains unemployment is now 20%, so the first people to get laid off are the foreigners - eg Argentines, Chilians etc.. so they are on the flights home, which is keeping the flights full..

I personally don't think there is a huge flow back from South Americans expats back to there home country. If you are a legal resident in Spain and you lose your job you can live of the state for about 7 months to a year. The crisis did start a bit earlier in Spain(early 2008) but I am sure that many legal residents prefer to wait out the crisis. Many expats also have been 8 to 10 years in Spain and are most likely married, have a mortage and have kids in Spain

The illegal aliens most likely prefer to stay because they know if they do go back that they most likely can't return

There are people returning offcourse but if you do, how do you find a job in Argentina? You can most likely stay with your parents but people who have lived separated from there parents it's not easy

Spain does also have a voluntary return plan which they pay up to 12.000 euro to go back for atleast 3 years, this plan is barely used, if there was a huge flow back this plan would have been used way more

Argentina also was one of the few countries that increased there visitor flow to the USA(and there is probally a 10-20% of Argentines that don't fly with there Argentine passport) in 2008. I think it's about even compared to the Americans visiting Argentina. The Argentines in 2008 kept on going to USA and Europe I have no figures of the first half of 2009 but I doubt it completly dried up.

There are also not that many flights from Europe to Argentina and most also cater Brasil and Uruguay and Chile.

On top of my head: BA, Air France, AllItalia, Lufthansa, Swiss, Iberia, Air Europa and maybe a few more and some that fly via the USA.

I don't know but I doubt there are more then 5 flights a day from Europe that arrive at Ezeiza

At the Euro - NA lines prices definitly have gone down a lot since 2008 but there is also way more competition there

Inflation: Because argentina is a closed economy compared to alot of countries, products do not flow as easily or quickly across its borders. Because of the drought, there has been a storage for dairy, meat, friut and veges.. This is not usually a problem because a country will import the short fall, but argentina doesnt do this as much, the prices increase, which then the people need increase in wages to afford the same as they could afford a year ago. The producer then needs to put up prices to pay the extra wages, and before long it becomes an out of control upwards spiral, which is where argentina is at the moment. Inflation is at around 30% or more a year. The gov says its only 9% because it has inflation indexed debt. If the base interest rate on the debt is 10% they also have to add the inflation number to that, so it would be 10 + 9, and they would pay 19%.. instead of what the true rate should be of 10 + 30%.

Real inflation in 2009 is definitly not 30% and it will go back down even more in the next 6 months due to the crisis and more expensive public services

 

[Recoleta Carolina]

What time of day or night were you walking when you made the observation that the cafes and restaurants were "pretty" empty? If you are really walking the streets of Recoleta can't you determine for yourself whether or not "many" cafes/restaurants have actually closed (as opposed to relating what you have heard)?

Not only have I observed that few cafes and restaurants in Recoleta, Palermo, and Belgrano have closed, but almost all of those who recently closed are presently being remodeled and will reopen soon, though there is certainly no guarantee of success.

Okay, Steve, just to make you happy I will indulge your remarks....................


I have had drinks and lunch within the last month at some of the luxury hotels. The lounges were almost empty.

I had dinner at a very popular restaurant on a Saturday night which is always packed. My friends and I got a prime window table because the restaurant was almost empty.

I have seen three movies this month on Saturday nights. I would say occupancy is running around 20% if that much.

Have you been to a shopping mall lately? Just about every display window advertises discounts of anywhere from 30% - 60%. The stores in Palermo don´t seem to be doing any better.

In my immediate neighborhood around 4 or 5 of the traditional style cafes have closed within the last two years only to be replaced by dry cleaners or trendy clothing stores (which I doubt will last).

I don´t go to clubs but my guess is that they are doing well. I think it is the upscale market that is hurting more.

Recoleta, Palermo, and Belgrano do not represent even a fraction of the size of Buenos Aires. I have read that hundreds of restaurants/cafes have gone out of business but obviously I am not going to check it out. It would be too long of a walk to wander from one end of Buenos Aires to the other. By the way, try chatting with the taxi drivers. They are an excellent source of information and tell me their business is down up to 50% from a year ago.

At any rate, I suppose you have read many of the other posts that seem to believe that business is down. But, hey, maybe business is doing great in Belgrano. I certainly hope so. But, where I am sitting, I think that people are cutting back on their spending.

 

[BlahBlah]

I think the movies are down because of the swine flu. I would think they are still doing okay in general. It's a nice salida de novias o amigos and it's not really that expensive

There are restaurants who are still doing ok but I think it's fairly obvious that business is down

The clubs are still doing good in my opinion but I don't know how many people get in for free, I think that most do that trick. I very rarely see foreigners now in clubs(other then Kika on Tuesday or lost on Thursday) and that was a lot different in 2008

 

[mini]

Did you make an offer?

It all has to do with (lack of) competition and raising cost

In one particular case we made an offer & the woman said that she would not take a lower price because she "had many of them". ..???? She had many of them so they should sell for more???