The number of Uruguayans and Chileans visiting Argentina has more than doubled from a year ago when Covid-19 travel limits were lifted.
Even though the government has a lot of control over the official exchange rate, the Argentine peso is the developing market currency that has done the worst so far this year, falling more than 34%.
On long weekends, Uruguayans drive across the border to eat cheap steaks and buy things for their homes. A study by Uruguay’s Catholic University found that basic goods are about 59% cheaper in the Argentine border town of Concordia than in the Uruguayan city across the river.
According to statistics from the Uruguayan government, Uruguayan tourists spent more than $900 million in Argentina in the year that ended on March 31.
Wilson Bueno, a retired civil servant and artist, and his wife drove from their home in Paysandu, in the northwest of Uruguay, to visit family in Buenos Aires last month. Their money went so far that they were able to take a day trip to a horse ranch.
A big difference between Argentina’s different exchange rates shows that tourism is on the rise.
Officially, one dollar is worth 268 pesos, but tourists with foreign-issued credit cards are charged an alternative exchange rate of nearly 500 pesos per dollar.
This is because the government controls the exchange rate very closely. Some tourists get cash on Argentina’s black market by exchanging US dollars for pesos at the same rate as the parallel.
“It costs less than half as much to fill up the tank in Argentina as it does in Peru,” says Bueno, who also went to Mendoza this year on a cheap tour plan. “We paid 3,000 Uruguayan pesos ($80) and filled up our tank in Buenos Aires with a little more than 1,000 pesos.”
Even though there are more people traveling than ever before, Argentina loses money on tourism because its own people spend more money outside of the country than tourists bring in.
That’s bad news for President Alberto Fernandez’s government, which has been tightening capital controls to protect the central bank’s declining hard currency savings, even if it means bringing the economy closer to a recession.
This winter, so many Uruguayans want to ski in Argentina that the charter airline Andes Lineas Aereas started direct trips from Montevideo to the vacation town of Bariloche in the Patagonian region this month.
At the parallel rate, a one-day pass for an adult at Bariloche’s Catedral ski slope costs about $58. Valle Nevado, a lodge in Chile, charges $77.