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Bargains Draw

This article was originally found on:

Bargains Draw Visitors to Bustling Buenos Aires

Published: March 14, 2004

Buenos Aires

Bulldozers and cranes vie with limousines these days on the Avenida Alvear, in Buenos Aires's ritzy Recoleta neighborhood, as construction workers race to transform one of the Argentine capital's most elegant palaces into the exclusive wing of a new 180-room Hyatt hotel.

The refurbishment of the residence of the Duhau family dating from the 1930's will cost $60 million and is scheduled to open in the spring of 2005. According to Roberto Ferrari, the project's coordinator, it "will be sophisticated and glamorous."

Argentina might still be on its economic sickbed, recovering from four years of bitter recession, but its woes - and particularly the sharp drop in the value of the peso - have been a boon to foreign tourists.

Millions of them - Americans, Brazilians, Spaniards, Italians and Germans - are flocking to this, "the Paris of South America," to sample its tango, and its abundant museums, sophisticated restaurants and great shopping, at bargain prices.

According to a study published recently by the city's economic development office, Cedem, three million foreign tourists visited Buenos Aires last year, some 50 percent more than in 2002. In the first quarter of 2004 alone, about 1.5 million visitors are expected. For nearly 10 years until early 2002, the peso had been pegged to the dollar at parity, meaning dinner at Sucre, one of the capital's toniest restaurants, used to cost $75 a head with wine. A room at a midrange hotel such as a Holiday Inn would typically cost nearly $200 a night.

Today, with the Argentine currency now trading at just under 3 to the dollar, a dinner for two with wine at Sucre should cost well under $50. A midrange hotel, such as the Lancaster on the Avenida Cordoba, can cost as little as $45 a night, about half the price before devaluation, while a room at the Holiday Inn Express can cost as little as $85. A double at the elegant Marriott Plaza on the Plaza San Martín costs just over $100.

Rates for Argentines at cheaper hotels can be even lower; otherwise, hotel managers argue, they would have no local clients. But Arturo Garcia Rosa, president of HVS, hotel consultants in Argentina, and other tourism professionals advise against haggling for the rates charged to locals. Bargaining doesn't normally work, unless you are staying for a month or so.

"Rates in general are dramatically lower," said Mr. Garcia Rosa. "Four-star hotels are half the price they used to be and are about $100 a night cheaper than in most main capitals."

While the new Hyatt's rooms - at $300 a night - will be far from cheap, Mr. Ferrari says he is counting on increasing demand: occupancy rates in the city, even at the most expensive five-star hotels, are over 75 percent, more than double what they were in the depths of the 2001 crisis.

Hotel development is not limited to the new Hyatt. Another luxury hotel, run by Sofitel, the French chain, has recently opened in the Recoleta district, while the Alvear Palace, long the capital's best-known luxury hotel, is refurbishing some of its rooms to meet demand. And restaurants are taking heart from the boom and expanding. Last year Orient Express Hotels opened La Cabaña, a faithful re-creation of one of the city's most celebrated establishments, on Rodríguez Peña. The original, patronized by figures such as Eva Perón, Richard M. Nixon and the Aga Khan, closed in 1996 as Argentina slid into financial crisis.

"The devaluation changed the scenario overnight," said Lucas Rentero, co-founder of Eternautas, a Buenos Aires operator offering private tours in several languages focusing on the capital's history and culture.

For two years after February 1999, when Mr. Rentero and his two partners set up Eternautas, they personally guided two or three tours a week. Today, the partners, plus a team of 10 multilingual guides, take out as many as seven tours a day.

"Our prices are down by 30 or 40 percent," said Mr. Rentero, explaining that some of the currency gains have been eaten away by inflation. "But we still charge only half the price you would pay for a private guide in a European capital." A half-day tour for two people with car, driver and English-speaking guide currently costs $62. For a group of 10, the price is $14 a head.

"I just fell in love with the place," said Judy Milliken, a retired travel agent from St. Petersburg, Fla., who took Eternautas's Evita tour in November. "I just loved the architecture, the tango, Evita, the cafe culture, the great food - and where else can you get a great bottle of wine for $4? It's terribly inexpensive."

So what are the best buys? Because prices of imports have risen as a result of devaluation, "made in Argentina" is back in fashion. On the Calle Florida, the city's main shopping street, lots of new talabarterías - stores selling handmade leather and silver goods - have sprung up. Shops specializing in indigenous arts and crafts, such as Pueblo Indio in the San Telmo district or Arte Etnico Argentino in Palermo Viejo, offer colorful blankets and rugs, ethnic furniture, masks and sculptures.

Another good buy is Argentine wine, which is beginning to gain recognition. Jaime Chmea, partner at the Winery on the Avenida Leandro N. Alem, who has increased the wine store-restaurants in his chain from two to five in the past 18 months and is about to open another next to the dockside Hilton, says prices of top vintages in dollars have risen to precrisis levels, but that most wines are still a bargain.

A Malbec from the vinyards of Escorihuela Gascón, a local favorite, costs about $10, while an Angelica Zapata Malbec, which sells for $60 in New York, costs $35 here.

"In January 2002, I can tell you business was depressed and I was depressed," said Mr. Chmea, "but not anymore!"