BUENOS AIRES, Argentina—Arturo García Rosa, president of HVS Argentina, served as the president of last week’s South American Hotel and Tourism Investment Conference in Buenos Aires. Hotel News Now correspondent Ellen Hoffman caught up with Mr. Rosa for an interview during the conference.
HNN: Why did you decide to sponsor this conference at this time?
García: We were thinking about it years ago, seeing how the growing economies of South America were performing. More investment was appearing, and countries such as Brazil, Peru and Argentina had growth a couple of points over the world average. So (earlier this year) we decided it was the right moment to put together the conference.
HNN: What are the most difficult challenges facing potential investors in the hotel industry in South America?
García: The challenge in South America has always been financing. I’ve been in the industry for 30 years, and now we are in the middle of a huge (international financial) crisis. But the outlook for financing is different depending on the country. In Chile, Peru and Colombia, you find an atmosphere similar to (other industrial nations). Banks will give you a mortgage more or less for 70 percent of the investment at a rate of 7 (percent) to 8.5 percent. In Argentina and Brazil, it’s more difficult—in Argentina because of inflation and in Brazil because there is no money for loans.
HNN: Can you cite any other challenges to successful investment in hotels in South America?
García: The airline systems ... (especially) the problem of distributing people within the countries. LAN (Airlines), for example, more and more has identified cities (outside of capital cities) they need to serve.
HNN: How do you think the rising cost of fuel and of airline tickets will affect hotel occupancy rates in South America?
García: The region has been growing at rates of over 10 percent. You cannot maintain that forever. But we think growth will level off around 7 percent, and that occupancy will not go down as much as in other regions of the world. After the September 11 attacks and subsequent events—the terrorist attacks in Madrid and London, the war in Iraq, problems with Iran, earthquakes, the tsunami in Asia, costs going up in Asia—all this put South America on the (tourist) map. That’s why I think the region won’t suffer at the same level as some other regions.
HNN: Which countries do you think are the best potential markets for investment?
García: Colombia and Peru, because they are really underdeveloped, and because they have a good investment atmosphere. In Argentina, there are opportunities outside Buenos Aires. (And in a number of countries) there are opportunities to acquire and upgrade existing properties.
HNN: Should there be an integrated plan to develop tourism throughout the continent?
García: We need to take two steps. One is to attract investment, and the other is to promote the destinations. As soon as the investor puts together the investment, we need to sell their properties. The governments need to promote the destinations. The three government supporting this conference—Argentina, Brazil land Colombia—are good examples.
HNN: As someone who’s worked in the field for more than 30 years, have you heard or learned anything new or surprising at this conference?
García: It was a surprise to open this conference in the middle of the (financial) cyclone…in the middle of the middle of the hugest (financial) crisis we have ever seen. But beyond that we are all here thinking of the future. I suppose the U.S. government will find a solution quickly. Nobody likes to be in the heart of the crisis. But crisis is the door to opportunity.
