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Cablegate: Tourism Secretary Provides Overview of Tourism Prospects

VZCZCXYZ0009
RR RUEHWEB

DE RUEHBU #2114/01 2991325
ZNR UUUUU ZZH
R 261325Z OCT 07
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 9570
RUCPDOC/USDOC WASHDC
INFO RUEHBR/AMEMBASSY BRASILIA 6532
RUEHSG/AMEMBASSY SANTIAGO 0872
RUEHMN/AMEMBASSY MONTEVIDEO 6864
RUEHAC/AMEMBASSY ASUNCION 6654

UNCLAS BUENOS AIRES 002114

SIPDIS

SIPDIS

STATE FOR ECON WHA/BSC
USDOC FOR 4322/ITA/MAC/OCAC/APEACHER
USDOC FOR 3134/USFCS/OIO/WH/RD/MKESHISHIAN

E.O. 12958: N/A
TAGS: ECON BEXP OTRA ATRN AR
SUBJECT: TOURISM SECRETARY PROVIDES OVERVIEW OF TOURISM PROSPECTS

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SUMMARY
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1. As a follow-up to our July 29 meeting with Secretary of Tourism,
Enrique Meyer, the Ambassador hosted a meeting with the Secretary
and all relevant Agency section heads. Secretary Meyer explained
that the United States was a priority market for the Argentine
tourism industry and provided a detailed presentation on the tourism
sector in Argentina, including the latest trends, GOA programs and
initiatives, promotion strategies and opportunities for cooperation.
The Secretary mentioned the GOA's two main priorities, to promote
greater investment in hotel infrastructure and to increase the
volume of domestic flights. The need to expand domestic routes and
international arrivals to cities other than Buenos Aires was also
discussed. To help develop this sector further, the IDB has already
granted the GOA three loans. The Ambassador expressed concern about
recent reports about thefts by airport staff, underscored need for
improved domestic airline service and expressed support for US
company participation in expansion plans.

End Summary

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INCREASED TOURISM
-----------------

2. In 2006, the Argentine tourism industry had a record year with
4,115,920 arrivals, a 9 percent increase over 2005. Last year, the
sector employed 956,546 people directly and another 8,917,855 people
indirectly. Impressively, export revenue generated from tourism
ranked fourth only after soy products, vehicle parts and oil. All
current projections indicate that by 2020, the number of arrivals
will triple. The regions most visited are the City of Buenos Aires,
Patagonia, especially Bariloche, and Iguaz Falls in the Province of
Misiones.

3. On July 29, Tourism Secretary Meyer, accompanied by Mr. Daro
Cervini, Advisor to the Secretary, Ms. Valeria Pellizza, Director of
Tourism Development, and Mr. Miguel A. Cuberos, Executive Secretary
of the Institute of Tourism Promotion provided a detailed overview
of the tourism industry to Ambassador and others at the US Embassy.
Specifically, the Secretary highlighted the growth in inbound
tourism from the United States. The United States accounts for the
second greatest number of visitors entering Ezeiza International
Airport after Brazil. During 2006, 270,245 Americans entered, a 7.7
percent increase over 2005. Americans visit Argentina for two main
purposes, leisure (57 percent holiday, 22 percent visit friends and
family) and business (16 percent). On average, American tourists
stay in Argentina for eight days and spend $1,350 (excluding air
ticket). Americans generally select four and five star hotels.

4. The Secretary explained that the United States is considered a
priority market, along with most of Western Europe, Brazil and
Chile. Other countries, including Canada, Mexico, Ecuador,
Colombia, Peru, Australia and China are considered strategic markets
for development at this time.

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PROJECTS AND INITIATIVES
------------------------

5. According to Law No. 25.997 updated in 2004, the GOA strategy for
the tourism sector is to improve domestic infrastructure. Efforts
are focused on two corridors in Patagonia along the Andes and the
province of Misiones. Following these two specific areas, the GOA
will focus on the provinces of Salta and Mendoza. The remaining
regions will be ranked according to popularity, based on the number
of visitors and a future plan of development will be devised.

6. The Secretary mentioned that one of his priorities is to promote
greater investment in hotel infrastructure. U.S. hotel chains are
aggressively expanding in Argentina. There are more than 300 new
projects representing 700 million dollars in new investment. This
includes major projects, such as a Sheraton in Puerto Madryn and a
Hilton, Radisson and Hyatt in Misiones.

7. The Secretary's second priority is to increase the volume of
domestic flights with a new hub in Csrdoba to link all cities,
including Ezeiza Airport. This will eliminate the need for domestic
travelers to fly into the domestic airport, Jorge Newbery, and then
shuttle to Ezeiza for international travel. He stated that some of
the wealthier provinces already organize private charters to link
cities. The Secretary mentioned that he would like to eventually
establish additional international gateways in Csrdoba, Patagonia
and Salta. The Ambassador highlighted the July 2007 signing of the
new civil bilateral aviation agreement, which will permit a doubling
in the number of flights between Argentina and the United States.
The first addition will be an American Airlines direct flight
between Buenos Aires and Chicago on December 13, 2007.

8. In addition to these initiatives, The Secretariat has received
three large IDB Loans to help develop the travel and tourism sector.
An IDB Loan of 56 million dollars was granted to develop the Iguaz
Corridor, Posadas and the "Los Lagos Corridor" in Patagonia. A
Loan, valued at 2.5 million dollars, has been obtained to assist in
the promotion and marketing of Argentina, in general. The final 2
million dollar loan was granted to develop the "wine country" in the
central Andean region. The GOA has listed the Iguaz Corridor,
Corredor de la Puna, Corredor de Los Lagos, Esteros del Iber and
Route 40 (along the Andes) as priority areas for development and
investment.

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OUTREACH
--------

9. The Secretary of Tourism's highest priority is to market
Argentina worldwide. As an example of their commitment, they have
established representative offices in New York, Miami and Los
Angeles. The Secretariat is also participating in many Tourism
Trade Shows (77 to date) in Europe and the United States with hopes
of expanding into Asian markets in the immediate future.
Considering the current Peso exchange rate, Argentina offers
international travelers an excellent experience for a very
affordable price.

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COMMENT:
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10. The Travel and Tourism Industry in Argentina is booming and is
expected to continue to do so for foreseeable future. The Secretary
of Tourism is taking positive steps by supporting programs to take
advantage of this trend. The Ambassador congratulated Secretary
Meyer on the outstanding growth in the market and on the GOA's
strong commitment to expanding this sector. He stressed Embassy
support for and interest in US investment in the tourism sector as
well as growth of Argentine tourism to the U.S. The Ambassador
mentioned two priority problem areas: first our concern over thefts
from luggage at the international air terminal and the lack of
connecting domestic flights, both of which we believe limit
Argentina's current potential but which can be overcome with better
law enforcement and security at airports. Secondly, Ambassador
said, he fully agrees with the need to improve the quality,
timeliness, and variety of domestic airline travel in Argentina. At
the conclusion of the meeting, the Ambassador offered to work more
closely with the Embassy in hopes of exploring more opportunities
for collaboration between U.S. and Argentine companies in the
market.

WAYNE

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