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As The Real Turns: Brazil’s Impact Felt Daily

On May 24, 2011, In entrepreneurs, foreign investment, by InvestBA
Masters of Food and Wine 2011

This signature event barrel in the lobby of the Park Hyatt Mendoza is covered with "Muito Obrigado."

Of all of the Latin American countries participating in July’s Copa America, neighboring Brazil will undoubtedly send the most fans. After an opening round match in Buenos Aires against Venezuela on July 3, the Verde-Amarela nation will descend on Cordoba, San Juan and Mendoza. Yet, six weeks before the tournament begins, there are no rumors of a Brazilian invasion, because, as La Nacion’s Emilia Subiza reports, Brazil already dominates so many aspects of daily life in Argentina.

In a sweeping analysis of various sectors of the economy, Subiza likens Argentina to a small cog spinning alongside larger Brazilian cogs in the machinery of bilateral trade. Today Brazil, the world’s eighth-largest economy, buys 82% of autos built in Argentina, 42% of all Argentine industrial exports and 21% of total exports. Brazil ranks fourth in terms of DFI in Argentina, and is slowly beginning to dominate certain sectors like banking, beef, cement and shoes. One example: Argentina’s largest bank has 944 ATMs in the country; Brazilian banks now have 755.

The nationwide ATM network is especially convenient for the 863,492 Brazilian tourists that came to Argentina last year, more than double the number from 2009 and possibly on pace to top 1 million this year. A Standard Bank economist tells Subiza, “there  is a relatively new phenomenon which is the enormous quantity of Brazilian tourists that come to Argentina and are having a profound impact on the economy.”

So profound, writes Subiza, that Bariloche is now referred to as Brasiloche and Brazilian airline TAM had to upgrade from Airbus 320s to 330s just to accommodate more inbound Brazilian passengers. Like the cogs in her original analogy, giant Brazilian airlines and banks grinding out tourists and reais, with the smaller, service-oriented Argentine cogs, all too happy to receive them. (Full Story in Spanish)

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Ótima: BA Is Brazilians’ Favorite Destination

On April 7, 2011, In a-bric, foreign investment, tourism, by InvestBA
Brazilian tourists in Buenos Aires

Brazilian tourists in Buenos Aires love the affordable hotels, the shopping, the restaurants & the Quilmes.

We know for a growing number of Argentines, “BA” stands for Brasil Ahora!, a fact that can be validated on the beaches of Florianopolis and the Foz do Iguazu. But the travel and tourism festival de amor works both ways according to new data from Brazil’s Hôtelier News.

Argentina’s Tourism Hotel Association (ATHA) says the number of Brazilian tourists in Argentina rose 85% in 2010 over 2009. Today, Brazilian Portuguese is a familiar chorus in the gallerias of BA, on the slopes of Bariloche and in the vineyards of Mendoza. ATHA confirms that Brazilians now account for 32.6% of all foreign visitors to Argentina. Just two years ago, Brazil trailed Europe, the U.S. and Canada with 18% of international arrivals at Ezeiza (Source: INDEC, July 2009).

As if the news could not get better, Buenos Aires is the number one most preferred destination among Brazilians, according to a poll conducted by Hoteis.com. The website summed up the Holy Trinity of BA’s appeal: “It’s easy (to get there), it’s cheap (because of the strength of the real), and there is a good selection of quality hotels. For what one would pay for a one-star hotel in New York or a two-star hotel in Rio, you can get a four-star hotel in Buenos Aires.” (Full Story in Portuguese)

For more information about real estate investment opportunities in Buenos Aires, download IncomeBA (English, Portugues)

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Saver Nation: Courting the ‘A’ in Argentina

On November 3, 2010, In a-bric, culture, foreign investment, by InvestBA
Argentina Savings Rate

A new survey from Rio de Janeiro shows Argentina's savings rate is significantly higher than Brazil's.

“The Brazilians are buying everything” is a common refrain heard here in Argentina, but the locals often say it with more of a sense of disbelief than envy. Either Brazilian consumers are buying durable goods manufactured here or Brazilian tourists are giving their cartoes de credito a workout in our restaurants, ski slopes and gallerias. Both activities are good for Argentina’s manufacturing and tourism sectors.

The neighbor to the north is the undisputed regional juggernaut, and their economic boom is manifest in the swelling ranks of Brazilians who descend and spend accumulating goods and social status along the way. So why then aren’t Argentines envious of these nouveau riche caricoas and paulistas? Probably for the same reason they were never envious of American consumers during their easy-credit-fueled, pre-housing-implosion prior to 2007.

The save-now-because-you-never-know-what-tomorrow-may-bring mentality our European ancestors brought across the pond a century ago was never abandoned (or worse, ridiculed) in Argentina like it was by the Baby Boomers in the U.S. Meanwhile only 14% of Brazilians are saving money, so Brazilian banks like Itau are trying to expand in Argentina and reach more Class A consumers. The combination of spending aversion and saving sobriety helps explain why Argentines today look north to Brazil with joy (“Veni­…Gasta”) and further north to the U.S. without too much empathy (“Crisis…¿Que crisis?”).

For more information on investment opportunities in Buenos Aires and Argentina, download the new issue of InvestBA Privada.

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Liquidação: The Brazilians Are “Buying Everything in Buenos Aires”

On September 3, 2010, In a-bric, lifestyle, tourism, by InvestBA
Galerias Pacifico in Buenos Aires

Let Us Pay: A Brazilian tourist recently took this photo of Buenos Aires shopping cathedral, Galerias Pacifico.

It was 90 years ago when the phrase “Rich as an Argentine” was coined in Paris. Flush with new-found export wealth, the country’s elite would travel to European capitals for shopping sprees of clothing, fabrics and antiques.

By the end of the century, the wealthy were still going abroad in full acquisition mode; however, destinations closer to home, Miami, Punta del Este and Florianopolis, became the playgrounds of choice.

Now, only ten years into the new century, and it seems Brazil’s nouveau riche have become the Western Hemisphere’s new shopaholic celebre. The influx of Brazilian tourists to Argentina is well documented here, but Reuters’ Stuart Grudgings digs deeper into the suitcases of returning cariocas and finds they purchased just about “everything” while on vacay in BA.

“Backed by a booming economy, record job creation and a strong currency, Brazilian consumers are taking wing as they go on a spending spree…Brazilian tourists spent $8.6 billion abroad in the first seven months of 2010, a 56 percent rise on the year before,” writes Grudgings. At one point, he interviews a 54-year-old Brazilian tourist accompanied by twenty of her closest friends at a Buenos Aires galleria and asks what they are buying. “Everything,” she replies.

The current Brazilian buying frenzy is fueled by economic strength, availability of cheap credit and exorbitant import tariffs back home. It’s worth noting Argentines face similar tariffs on electronic goods which explains Argentina and Brazil’s #1 and #2 ranking on the global iPod index. (Full article)

For more information about Buenos Aires lifestyle and cultural events, visit our archives and download the latest issue of InvestBA Privada.

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Fasten Seat Belts: Why Latam Airlines Will Be A Game Changer

On August 29, 2010, In a-bric, competitiveness, foreign investment, tourism, by InvestBA
Lan Tam Airplanes

When Cueto Met Amaro: In the works for 7 years, the Latam merger will shake up the regional landscape.

When Chile’s LAN and Brazil’s TAM, two of Latin America’s most efficient and profitable carriers, announced plans to combine operations, the headlines trumpeted the superlatives: the region’s largest fleet, 115 destinations in 23 countries, $8.5 billion valuation, $400 million in annual cost savings, and the list goes on.

But the combined operations and creation of Latam Airlines Group (LAG) trumpeted in the global financial press has been downplayed here in Argentina, and Carlos Manzoni of La Nacion tells us why. “The merger will be a blow to Aerolíneas Argentinas (AR), because Aeroli­neas will have to compete with (Latam) in the two most important routes they have: Chile and Brazil. They are going to lose market share when they should be gaining ground.”

If Argentina decides to makes life more difficult for Latam, Manzoni says, the new carrier can retaliate in a few different ways. TAM could stifle the flow of Brazilian tourists to Bariloche during ski season by routing flights to Valle Nevado in Chile instead. Likewise, LAN could opt to shut down trans-Atlantic service from Ezeiza to Europe, and channel those flights in and out of Sao Paulo instead. Either way, it will be a new airline landscape where Latam dominates as the big continental carrier, while small regional airlines like Gol and Pluna continue to gain market share exploiting the low-cost niche.

In closing, Manzoni says the courtship between the Cueto (LAN) and Amaro (TAM) families has been ongoing since 2003. Now that the nuptials are pending, let’s see if old regional flames try to spoil the honeymoon. (Full article in Spanish)

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