Tourism Investment oportunity guide - 2009 by Desarrollo Turístico

Guide to Investment Opportunities in the Tourism Sector

5.984 - 210.000 - 50% - 10.500 - 38.496 - 7.400 - 550.300 - 9.124 - 8.100 - 450.314 - 80.200 - 4.000 - 572.000 - 5.984 - 210.000 - 50% - 10.500 - 38.4 - 26.000 - 597 - 5.3600 5.000 - 7.550 - 22.390 - 5.984 - 20.000 - 50% - 10.500 - 38.496 - 7.400 - 32.280 - 30.698 - 46.000 - 72.300 - 31152.000 - 7.550 - 22.390 - 5.984 - 44.000 - 0% - 56 - 584 - 44.000 - 57.820 24.500 - 38.496 - 7.400 - 32.280 - 100% - 9.124 - 82.000 - 7.550 - 22.390 - 77.500 - 31.500 - 72.000 - 550.420 - 820.530 - 42.496 - 7.400 -32.280 - 562 - 21.900 - 543 - 56% 470.000 - 9.200 - 455.900 - 100% - 47.390 - 8.330 - 71.000 - 50% - 24.640 - 45.300 - 9.400 - 62.280 - 71.950 - 310.280 - 8.000 - 35.600 - 873.695 - 50.000 - 9.200 - 49.690 - 100% - 8.300 - 569.877 - 564

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Guide to Investment Opportunities in the Tourism Sector

Introduction Tourism as a driver of Development The Purpose of this Publication

1. Argentina: Diversity and Opportunities

3 3 5 6

2. Tourism in Argentina 2.1 Tourism in Numbers 2.2 The Travel Balance

8 9 11

3. Public Sector Action 3.1 National Tourism Act 3.2 Federal Plan for Sustainable of Tourism 3.3 Program for the Enhancement of Competitiveness in the Tourism Sector â&#x20AC;&#x201C; IADB Loan 1648/OC-AR 3.4 Financial Assistance Program

12 12 13 18

4. Demand and Destinations 4.1 Tourist Movement 4.2 Main Destinations 4.3 National Parks

20 20 22 23

5. The Tourism Sector

6. Tourism Product Offer â&#x20AC;&#x201C;The Private Sector 6.1 The Current Position of the Tourism Sector a. The Hotel Industry b. Travel Agencies c. Transportation d. Theme Spaces

28 28 28 32 33 36

7. Legislative Framework 7.1 National Legislation 7.2 Program of Incentives to stimulate Tourism Investment 7.3 Hotel Accommodation Legislation 7.4 Environmental Legislation 7.5 The Tax System 7.6 Legal framework for companies

39 39 40 41 42 43 44

Appendices Appendices 1 Geography and Climate Appendices 2 Demographics Appendices 3 Socio-economics and Education Appendices 4 Main Attractions Appendices 5 Regional Maps for the Strategic plan for Sustainable Tourism Appendices 6 Product Matrix

46 47 51 54 56 67

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Guide to Investment Opportunities in the Tourism Sector

Introduction Tourism as a driver of Development The tourism industry is experiencing steady growth all over the world. Few other economic activities have achieved such high levels of constant growth for so many years. According to the World Tourism Organization (UNWTO), average global annual growth in tourism for the period 1950-2000 was 6.8%, a rate much higher than both average population growth and global economic growth. It is evident that increasing levels of globalization, higher standards of living, and the enormous improvement made in the communications and transportation industries have all greatly favored the tourism industry. Even though a period of stagnation reigned in Argentina since the end of 2001 as a result of terrorism, natural disasters and increases in the price of petroleum, this tendency began to revert itself in 2004 with the arrival of 766 million tourists. This figure, the highest in the last 20 years, represented an annual growth of 10.0%. In 2005, 808 million arrivals were recorded representing an annual growth of 5.6% over the previous year. In 2006, 842 million arrivals were recorded representing an annual growth of 4.5%. In 2008, 924 million arrivals were recorded representing an annual growth of 2.9% over the previous year. Estimates indicate that this tendency will continue over the coming years. Argentina has not been left out of this phenomenon, in that the tourism figures reveal at a glance, that the country is becoming an increasingly important tourist destination in the eyes of both travelers and tourism operators on a global scale. For example, the data for the last fifteen years show that the number of tourist arrivals to Argentina has risen by 142%, from 1,930,034 in 1990 to 4.665.360 in 2008. This trend is expected to continue in the future. As a consequence of this sustained growth, tourism is currently one of the most

dynamic sectors of the Argentine economy, and all projections for the coming years point to its continuing to play a vital role in the generation of foreign currency, and in the creation of new jobs. This situation has not come about by chance; but is part of the well balanced development strategy being carried out by the National Government. Within this strategy, and regarding tourism activity, the objective is to establish a firm base via legislation and management which will assure social, economic, ethical, and environmental sustainability. As such, tourism is conceived of as one of the central building blocks in the construction of a new model for the nation.

Quebarda de Humahuaca, Purmamarca, Province of Jujuy

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Guide to Investment Opportunities in the Tourism Sector

To this end, the enactment of the National Tourism Act (Law Number 25997) at the end of 2004 confirms the strategic character which the current administration assigns the sector, and provides it with a core tool for its development: The Strategic Federal Plan for Sustainable Tourism (Plan Federal Estratégico de Turismo Sustentable - PFETS). The PFETS was created as an instrument for the orientation, coordination, and management of the tourism sector, with the goal of carrying forward planned and organized practices in order to consolidate, by 2016, “the Argentine Republic as the benchmark country in South America for the quality and diversity of its tourism product, founded on balanced territorial development and respect for the environment and identity of its inhabitants”. To reach this objective, the national government has committed itself to an annual minimum investment of 184 million dollars, earmarked for the most part to infrastructure development projects (in transportation, communications, energy, and health) in tourist areas prioritized by the PFETS. Within this context of growth and support fostered by the Federal Government, the drive and dynamism of private investment give it a central role in accompanying the expansion of the Argentine tourism sector.

Glaciar Perito Moreno, Province of Santa Cruz

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Guide to Investment Opportunities in the Tourism Sector

The Purpose of this Publication Within this context, the purpose of this publication is to provide those who are interested in investing in the Argentine tourism sector with the basic information necessary for an effective assessment of the best investment alternatives. To that end the present publication will include the following: general facts and figures about Argentina; specific data for the tourism sector; figures on demand and some components of the product offer; information on sensitive areas and areas that represent excellent business opportunities; information on Federal Government actions related to the development of the industry, including programs of special interest to investors and the most relevant points with respect to current legislation.

Parque Nacional Nahuel Huapi, Province of RĂo Negro

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Guide to Investment Opportunities in the Tourism Sector

1. Argentina: diversity and opportunities Argentina is located in the southernmost region of South America, covering almost 2.8 million km2. It is the second largest country in the continent and the eighth largest in the world. As regards population, its 36.8 million inhabitants rank it as medium-sized, comparable to Spain. Argentina borders to the east with Uruguay and Brazil, to the north with Bolivia and Paraguay, and to the west with Chile. The national territory also includes a substantial portion of the Antarctic continent, in which a constant presence is maintained. The countryâ&#x20AC;&#x2122;s extensive geography boasts an incredible diversity of landscapes: high mountain peaks, subtropical jungle, Andean plateaus, gorges and canyons carved in solid rock, immense flatlands famous for their agricultural productive capacity, their livestock, and a vastness of land that stretches beyond the horizon, lakes, forests, beaches, marshes and wetlands, thermal hot springs, volcanoes, rivers, peninsulas, and islands. All of this is complemented by flora and fauna as colorful as they are varied. Argentina is a country as rich in cultural heritage as in geographical diversity, with artistic forms of human expression dating to pre-Colombian times. The presentday cultural diversity that characterizes Argentine society is a tourism resource that is gaining reputation on a global scale.

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Guide to Investment Opportunities in the Tourism Sector

The countryâ&#x20AC;&#x2122;s size and geography allow the tourist to choose from a wide variety of climate zones, guaranteeing that in Argentina there are always options for the most diverse demands and expectations, and that tourism here is a year-round proposal. With respect to political organization, the country is divided into 23 provinces and the capital district, the Autonomous City of Buenos Aires. It is a republican system of government: the National Congress, with a Senate and a House of Representatives, makes up the legislative branch; the other branches are the Judicial Power, and the Executive Power, which, of course, has as its head the President of the Nation. The president also serves as Head of State and Head of the Government. In Argentina, the president dominates the political scene and provides directives to the government as a whole and to the society at large.

7 Puerto Madero, Buenos Aires City

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Guide to Investment Opportunities in the Tourism Sector

2. Tourism in argentina Over the last few years, Argentina has moved onto a select list of tourist destinations recognized for the opportunities for expansion that they present. Following the crisis of 2001, but above all from 2003 on, inbound tourism in Argentina has developed to such an extent that it is now considered a pillar of the economic recovery that the country is currently enjoying. This recovery has positioned the Argentine economy among those with the highest levels of growth in the world over the last five years. In fact, GDP growth has been above 7% every year since 2003, reaching a peak of 7% in 2008. Being a highly personalized service, tourism is a valuable generator of both direct and indirect employment, and given its federal character, it contributes to the development of regional economies while spurring a greater distribution of federal revenue. It also promotes public and private investment that enhances the country’s competitiveness and raises the population’s standard of living. At the same time, tourism is an important generator of foreign revenue. The latest figures for 2008 show that the tourism sector’s participation in the national economy amounted to 6.4% of total exports.

Within the global scene, the Argentine presence is being consolidated on the world’s most important markets as new products are being developed and offered that meet both the current trends in demand and align with the country’s comparative advantage. This advantage is rooted as much in Argentina’s natural and cultural attractions as in its efficient management systems and propensity to quality.

Tango, Buenos Aires City

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Guide to Investment Opportunities in the Tourism Sector

2.1 Tourism in Numbers As already mentioned, the recent growth of the sector has demonstrated the great potential and many opportunities for development that are now open to investors both national and foreign. The following table shows the dynamism of the Argentine tourism sector, a dynamism that has enabled the country to become the seventh most-visited tourist destination in all of the Americas.

Referring to the figures above, it can be seen that the first three countries (Brazil, Argentina and Chile) in the group account for 59% of all tourist visits received in the region. Argentina has a market share of 22% in Tourist Inflow in the region. The challenging objective of Argentina, as respects tourism, is to reach the number one position in South America by 2016.

Tourist Inflow - Millions of tourist

Tourist Inflow - Market Share

9 6 5

5,1

4,7

4,6

4 2,1

Brazil 24%

1,9 Chile 13%

1 0

Others 22%

Uruguay 9%

2,7

PerĂş 10%

Brazil Argentina

Chile

PerĂş

Uruguay

Others

Argentina 22% Source: World Tourism Organization. UNWTO. 2008

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Guide to Investment Opportunities in the Tourism Sector

Total Spendig - Millions of U$S

8000 7000 6000 5000 4000 3000 2000 1000 0

Total Spendig - Market Share

Uruguay 5%

5785

Chile 8%

4633

1757

Brazil Argentina

Chile

PerĂş 11% Others 22%

1991 1042 PerĂş

Uruguay

1218

Others

Argentina 25%

Brazil 29%

10 Source: World Tourism Organization. UNWTO. 2008

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Guide to Investment Opportunities in the Tourism Sector

2.2 The Travel Balance

Turist Inflow (in millions)

Market Share

Total Spending (in millions of dollars)

Brazil

5,1

25%

5.785

29%

Argentina

4,7

23%

4.633

25% 8%

2008

Market Share

Chile

2,7

13%

1.757

PerĂş

2,1

10%

1.991

Uruguay

1,9

1.042

11%

Others

4,6

23%

3.792

22%

100,00%

19,000

100,00%

Total

21,1

Source: World Tourism Organization. UNWTO. 2008

Within this framework of expansion, the influx of foreign revenue generated by international inbound tourism has become one of the most important items in the analysis of the countryâ&#x20AC;&#x2122;s exports. In 2008, this revenue totaled 4.633 million dollars.

2008

Exports in millions of U$S

Soy subproducts

7.868

Fats and Oils

7.098

Cereals

6.817

Transport Materiales

6.577

Seeds and oily fruit

4.926

Tourism Industry

4.633

Source: SECTUR, based in INDEC data Note: LThe Travel Account is an export service, while other items in the comparison are export goods

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Guide to Investment Opportunities in the Tourism Sector

3. Public sector action The development and expansion of modern tourism requires the constant participation and support of the public sector. This sector creates the macro-economic conditions favorable to tourism, and must also participate on the ‘production line’ of the tourism product as the administrator of the resources and attractions crucial to tourist activity: beaches, boardwalks, highways, museums, protected areas and species, monuments, parks, hot springs, forests, etc. Moreover, the public sector must create, sustain, and drive those aspects proper to its role. These include the regulatory framework for the activity, the procurement of internal or external financing for infrastructure projects, and the creation of promotional instruments and management systems adapted to the highly competitive global tourism industry. Both functions are performed by the Federal Government. Measures have been taken to create a favorable environment for the development of tourism. The following is a detailed account of those measures.

Furthermore, in Chapter II, section 7, the text of the law itself sets down and promotes the need for a Strategic Federal Plan for Sustainable Tourism (Plan Federal Estratégico de Turismo Sustentable -PFETS) to act as an essential instrument in the carrying out of tourism policies, and as the guide and organizer for all activity in the sector over the next decade. As such, the PFETS becomes the central axis for public sector participation in all matters of tourism. In addition, Chapter IV of the law creates the National Institute for the Promotion of Tourism (Instituto Nacional de Promoción Turística), a public-private body responsible for the development and execution of plans, programs, and strategies for the promotion of international tourism. This mixed institute was formally constituted in 2005 and began its activities in 2006, thereby ensuring the crosssector coherence and continuity necessary for effective promotional activities and market relations.

3.1 National Tourism Act In order to achieve the country’s objectives for tourism, and respond to the operators’ need of a stable framework for the planning of future investment, the Federal Government spearheaded the enactment of the National Tourism Act, (Law Number 25997), in 2004. This act declares tourism an activity of national interest, essential for the development of the country. It also considers the receptive aspect of the activity as a non-traditional export product.

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Guide to Investment Opportunities in the Tourism Sector 3.2 Federal Plan for Sustainable Tourism (Plan EstratĂŠgico de Turismo Sustentable -PFETS) a. Objectives The PFETS is aimed at the development of a fundamental strategy for the consolidation of the tourism sector into a highly efficient and competitive system. The intention is to fuse the varied business, municipal, provincial, and regional strategic plans, in order to orient them in the same direction by means of a strategic plan at the national level. Within this national plan, the participation vested in the provinces is what essentially ensures the truly federal character of the strategy. b. Mission The goal of the PFETS is to create optimum conditions of competitiveness which would lead to the stable and sustainable development of the Argentine tourism sector, and in so doing, position the Argentine Republic as the benchmark country in South America due to the quality and diversity of its tourism product offer, based on balanced territorial development and respect for the habitat and identity of its inhabitants. c. Resources Working on a ten year horizon with an update every three years, the PFETS proposes a model for the sustainable development of tourism firmly rooted in: decision-making based on information regarding demand; planning as an organizational tool; and the strengthening of territorial bases and management systems as principal drivers of change.

To that end, the Regional Work Committees, chosen during the creation of PFETS, were subsequently divided into four fields of action: Marketing and Promotion; Sustainable Development of the Offer; Investment and Types of Financing; and Quality Control Management. As a result of this process, a total of 235 components (current and potential) of the national tourist space were identified, and classified into 6 categories, as follows: a. Tourist Corridors These are defined as geographical areas and/or areas of cultural homogeneity crossed by major circulation routes, and with top-notch attractions that generate regular tourist demand. Due to their size, they can be considered as tourism planning units. b. Areas of Current Exploitation Territorial parcels of varying sizes with important volumes of tourist demand, that already possess sufficient tourism services and acceptable levels of tourism management. Areas with Tourist Vocation, that is, territorial parcels with a concentration of top-notch tourism resources, but that present problems of accessibility, connectivity, service provision, management, planning, marketing and promotion. c. Gateways Symbolic and functional access points to all the components of regional and federal tourism spaces; urban nuclei of tourism service provision, equipped to serve as communication nodes.

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Guide to Investment Opportunities in the Tourism Sector

d. Crossings Essential connecting routes which make up the tourist space in the country. The equipping of a crossing is limited to the route services for vehicles and passengers, and to the collocation of information units. e. Cross border Circuits Bi-national Tourism product offer that is characterized by a geographic or thematic (border crossing) axis.

The red on the maps highlights the financing operations already initiated and made possible by the Inter American Development Bank (IADB) loan through the “Program for the Enhancement of the Competitiveness of the Tourism Sector”. These will take place in the Iguazú Corridor–Jesuit Missions Corridor (ruins) in the province of Misiones, and in the Southern Lakes Corridor in Neuquén, Rio Negro, and Chubut. The Priorities Hypothesis Map – Term 2 (T2) shows the remaining priority projects to be completed between 2011 and 2016, employing the same criteria with regards to regional distribution and diversity of component types.

f. Current and Potential Marine Circuits These consist of the tourism product offer of itineraries related to on-water activities and sports, such as boating on rivers, canals, lakes, and the ocean, and include rafting, cruises and all sail sports. Of these 235 components, a total of 56 were identified as priority components within the classification system mentioned above. Once the matrices for prioritization of the components of tourist space had been considered, three term-investment scenarios were created, as shown on the maps attached. It should be noted that the Plan forecasts an annual minimum consolidated budget of approximately 184 million dollars, to be used primarily (164 million dollars) for infrastructure projects that will allow better access to the destinations and services offered in the area in question. The Priorities Hypothesis Map – Term 1 (T1) shows a wide distribution of these innovations in all regions of the country, to be completed between 2006 and 2011. Clearly shown as well, is the diversity of the types of priority components, which in turn indicates the capacity for synergy.

Camino con bosque de Lapachos, Province of Córdoba

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Guide to Investment Opportunities in the Tourism Sector

Opportunity Maps Components of the National Tourist Space Priority Investments 2006/2011

Opportunity Maps Components of the National Tourist Space Priority Investments 2012/ 2016

References Actual gates

Potential corridors

Actual crossings

Potential inter - boundary trail circuits

Potential gates

Area with actual turistic use

Potential cossings

Actual Sea Circuits

Actual corridors

Area with turistic vocation

Actual inter - boundary trail circuits

Circuitos marinos potenciales

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Guide to Investment Opportunities in the Tourism Sector

The following map shows the map for Term 1 superimposed on the map for Term 2 (T1+T2), with the 56 priority tourist spaces included. It is easy to appreciate the level of homogeneity incorporated into the regional distribution and the extreme diversity of the components employed.

Opportunity Maps Components of the National Tourist Space Priority Investments 2016 Onwards

References Actual gates

Actual crossings

Potential gates

Potential cossings

Actual corridors

Actual inter - boundary trail circuits

Potential corridors

Potential inter - boundary trail circuits

Area with actual turistic use

Actual Sea Circuits

Area with turistic vocation

Circuitos marinos potenciales

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Guide to Investment Opportunities in the Tourism Sector

Finally, the last map (T3) shows the spaces identified as non-priority until 2016, spaces that may be considered commitment spaces for the future and which may be developed by provinces or municipalities and/or the private sector.

Opportunity Maps Components of the National Tourist Space – Priority Investments 2016 and beyond

Referencias Puertas actuales

Circuitos transfronterizos actuales

Puertas potenciales

Circuitos transfronterizos potenciales

Corredores actuales

Travesías actuales

Corredores potenciales

Travesías potenciales

Áreas de aprovechamiento turístico actual

Circuitos marinos actuales

Áreas de aprovechamiento turístico potencial

Circuitos marinos potenciales

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Guide to Investment Opportunities in the Tourism Sector 3.3 Program for the Enhancement of the Competitiveness of the Tourism Sector IADB Loan 1648/OC-AR As a complement to PFETS and in order to achieve the rapid development of two of the country’s main tourist destinations, the National Secretariat of Tourism (Secretaría de Turismo de la Nación) has negotiated a loan from the Inter American Development Bank (IADB) to carry out the Program for the Enhancement of the Competitiveness of the Tourism Sector. The objective of this program is the sustained increase in revenue generated from tourism in both the Patagonian Lakes Corridor and the Iguazú-Misiones Corridor. The program has a budget of 56 million dollars to be spent over the next five years on construction projects and improvements in the provinces of Misiones, Chubut, Neuquén, Río Negro, as well as in the Lanín, Nahuel Huapi, Arrayanes, Lago Puelo, Alerces, and Iguazú National Parks. The Executing Entity will be the National Secretariat of Tourism while the National Parks Administration (Administración de Parques Nacionales), the Federal Board of Architecture ( Dirección Nacional de Arquitectura) and the Federal Highway Administration (Dirección Nacional de Vialidad) will assume under-executive roles in the development of the Program. This program will be especially beneficial to the private tourism operator sector, as it will enhance the capacity of destinations to attract, retain, and satisfy tourists. The program will also directly benefit the local population, by generating new business and job opportunities, as well as better options for entertainment, recreation and

ways of spending leisure time. It will also produce social benefits by contributing to the appreciation and conservation of Argentina’s cultural and natural heritage. The specific results expected are the following: - An increase in the average length of stay of tourists in the two corridors - An increase in the average expenditure per day/tourist in the IguazúMisiones corridor - An increase in the number of foreign tourists - An increase in revenue from tourism in the national parks in the Lakes Corridor and in the Jesuit Missions

Misiones Jesuíticas, Province of Misiones

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Guide to Investment Opportunities in the Tourism Sector

The following program components were designed to achieve these objectives: - Evaluation and management of publicly-owned tourist attractions - Information and promotion at destination - Support for the structuring and promotion of the corridors - Strengthening of the National Tourism Board The types of projects included in the program can be classified as: Value enhancement of Tourist Attractions, Interpretation Centers, Information Offices, Access Gates, Interpretive Paths, Bicycle Paths, Cycle-lanes, Sign posted Tourist Paths, Theme Parks, Docks and Piers, Mountain Shelters, Cultural Centers and Handicraft Centers, Fire Prevention Centers, Entrances and Accessibility. The program also includes the strengthening of the National Secretariat of Tourism (SECTUR), the National Parks Administration (APN), and the two corridors involved through the structuring and promotion of same. The program takes into account other applications, such as the study and development of new infrastructure projects in the other priority corridors in the PFETS, which will be undertaken via new financing agreements that are already under way. 3.4 Financial Assistance Program

Program lines of credit finance projects that allow for quantitative or qualitative improvements of the tourism product, in areas such as: - Construction of lodging establishments - Expansion, renovation, finishing, or construction of installations - Purchasing of hotels or other types of accommodation establishments - Equipping (furniture, linen, chinaware etc.) - Vehicles - Capital goods - Working capital - Participating in national and international tourism expos and business trips - Facilitating commercial missions for travel agencies and tourism companies. - Preparation of first-rate publicity and advertising material - Equipping or promoting activities abroad for travel agencies that specialize in inbound tourism - Various elements for small-scale tourism, in the adventure and other non- traditional categories - Technical Assistance services and related costs Both the loan sums to be granted, as well as the payment terms vary depending on the destination of the loan. There are special lines of credit for small- and mediumsized companies (PYMES), as well as for entrepreneurial micro-projects.

There is also the Financial Assistance Program which is structured based on lines of credit offered by financial institutions and Official Organisms.

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Guide to Investment Opportunities in the Tourism Sector

4. Demand and destinations Tourist Inflow per Year

4.1 Tourist Movement

2007 2008

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

5.000.000 4.500.000 4.000.000 3.500.000 3.000.000 2.500.000 2.000.000 1.500.000 1.000.000 500.000 0 1990

The positive numbers for inbound tourism are based on an increased influx of visitors to Argentina. Over the period 1990-2008, the number of tourists arriving in the country rose by 142 %, while overall tourist spending was up 301 %. It is important to point out that with the events of 2002 â&#x20AC;&#x201C; the devaluation of the Argentine peso â&#x20AC;&#x201C; the country became considerably more attractive to foreign tourists due to lower prices (relative to a stable dollar). This reversed a trend of decreasing tourist visitor numbers dating from 1998. In fact, 2008 witnessed the greatest annual number of tourist visitors over the whole period analyzed.

Total Spending per Year - Billions of U$S

Source: INDEC

- 71 - 58.264 20% - 6.234 - 9.300 - 7.550 - 22.390 - 5.984 - 20.000 - 50% - 10.500 - 38.496 - 94.000 - 5% - 830.250 - 92.700 - 32% - 6.234 - 9.300 - 7.550 - 22.390 - 5.984 - 589.310 - 59

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0

Guide to Investment Opportunities in the Tourism Sector

Year

Tourist inflow

Variation %

Total Spending (billion of U$S)

Variation %

1992

1.703.910

-0,30%

1413

13,80%

1993

1.918.462

12,60%

1625,1

15%

1994

2.089.414

9,80%

1862

14,60%

1995

2.288.694

9,50%

2144,1

15,10%

1996

2.613.909

14,20%

2541,5

18,50%

1997

2.764.226

5,80%

2693

1998

3.012.472

2936,2

1999

2.898.241

-3,80%

2811,6

-4,20%

2000

2.909.468

0,30%

2817,3

0,10%

2001

2.620.464

-9,90%

2547,4

-9,50%

2002

2.820.039

7,60%

1476,3

-42%

2003

2.995.272

6,20%

1942,3

31,60%

2004

3.456.527

15,40%

2162,7

11,30%

2005

3.895.396

12,70%

2664,5

23,20%

2006

4.073.623

6,70%

3228

22,10%

2007

4.561.511

11,97%

4217

30,60%

2008

4.665.360

2,27%

4633

9,86%

(*) As of 2004, the methodology for calculating tourist spending was modified by incorporating the results of International Tourism Surveys.” Source: National Institute of Statistics and Census - Instituto Nacional de Estadística y Censos (INDEC)

An analysis of visitors by country of residence shows that during 2008 the highest percentage of foreign visitors was originated by countries bordering Argentina (58%). Tourists from the rest of America and North American travellers are in the second place with 20%. Tourists from Europe occupy the third position with 17%. And visitors from the rest of the world participated with 5%.

Origin of visitors

Uruguay 9%

Paraguay 8%

Europe 17%

21 Chile 19%

Brazil 19%

Bolivia 3% North America 10%

Asia & Others 5% Rest of Latin America 10%

Summing up, over the last two years the influx of foreign tourists has increased substantially (with 2008 the year with the highest number of arrivals in the whole period 1990-2008, as already mentioned). Moreover, this increase has been accompanied by a wider spectrum with respect to the visitors’ country of origin.

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Guide to Investment Opportunities in the Tourism Sector

4.2 Main Destinations The City of Buenos Aires is the most-visited destination in Argentina. It is the place through which visitors enter the country and one of the main attractions, above all for its cultural offer. After Buenos Aires come the traditional destinations for foreign tourists, such as IguazĂş Falls, and destinations in Patagonia, such as Ushuaia, El Calafate, and the Lakes area (i.e. Bariloche, San MartĂn de los Andes and Villa La Angostura), and finally the north of Argentina, with Salta the mostvisited destination. Regarding foreign visitorsâ&#x20AC;&#x2122; reasons for coming to Argentina, vacations are the number one reason, accounting for over 61% of the total visits, followed by visits to family or friends, at 17%, while business, conferences and congresses comes in third at 17%.

Visit purpose

Business, Congress or Conference 17% Visit to family of friends 17%

Others 5%

Vacations 61% Source: ETI - Sectur - INDEC. Independent Investigation. Satellite Tourism Account

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Guide to Investment Opportunities in the Tourism Sector

4.3 National Parks Among its contributions to tourism, and to humanity as a whole, the Argentine public sector can also claim the creation, conservation, and maintenance of an important network of national parks and protected areas. This network is currently the destination chosen by approximately 45% of all international tourists coming to Argentina. Along those lines, Argentina is a pioneer country with respect to the conservation of natural resources, being the first country in Latin America to initiate the process for the creation of protected areas. This took place in 1903, when Doctor Francisco P. Moreno – the famous Perito Moreno – made a donation of land in the area that is now Nahuel Huapi National Park, with the goal of “maintaining (the area’s) natural physiognomy and of ensuring that any works undertaken, shall be to provide comfort to the visitor”. In 1922, Doctor Hipólito Yrigoyen, President of the Nation, created the first national park, called “del Sur” (Southern), with an area of 785,000 hectares, which is today, our Nahuel Huapi National Park. Meanwhile, in the northeast of the country, in what is now the province of Misiones, land reservations had been set aside in 1902 which ultimately became another of the large Argentine national parks of today, that of Iguazú. Moving ahead, Law Number 22357 of 1981 created the Administration of National Parks and set forth the first of the categories that comprise the National System of Protected Natural Areas: National Parks, National Reserves, and Natural Monuments.

At present, this official body protects 29 national parks, 5 natural monuments and 4 natural reserves that together constitute a total of 3.6 million hectares, roughly 1.4% of the national territory. In terms of quantity of visitors, the national parks have undergone an explosive growth over the last fifteen years. From 1991-95, visits increased 50.5%, while for the period 1996-2000, and 2001-2008, the figures were 11.1% and 163%, respectively. This last figure represents the greatest increase in tourist visits to national parks on record.

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Guide to Investment Opportunities in the Tourism Sector

National Parks - Number of visitors

3500000 3000000 2500000 2000000 1500000 1000000 500000

2003 Number of visitors

2004

2005

2006

2008

2007

2006

2005

2004

2003

2002

2007

2008

1.844.384 2.251.400 2.579.511 2.737.374 2.934.802 3.057.722 Sierra de las Quijadas National Park, province of San Luis

Source: Oficce of resource Exploitation - national Parks Administration.

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Guide to Investment Opportunities in the Tourism Sector

References 1. MN Laguna de los Pozuelos

20. PN Lihué Calel

2. PN Baritú

21. PN Laguna Blanca

3. PN Calilegua

22. PN Lanín

4. PN Formosa

23. PN Arrayanes

5. PN Río Pilcomayo

24. PN Nahuel Huapi

6. PN El Rey

25. MN Ballena Franca Austral

7. PN Los Cardones

26. PN Lago Puelo

8. PN Iguazú

27. PN Los Alerces

9. RNE. San Antonio

28. MN Bosques Petrificados

10. PN Chaco

29. PN Perito Moreno

11. RNE. Colonia Benítez

30. PN Los Glaciares

12. PN Campo de los Alisos

31. PN Tierra del Fuego

13. PN Mburucuyá

32. PN San Guillermo

14. PN El Palmar

33. PN Talampaya

15. PN Pre-Delta

34. MN Huemul

16. PN El Leoncito

35. MN Taruca

17. PN Sierra de las Quijadas

36. PN Copo

18. PN Quebrada del Condorito

37. PN Monte León

19. RN Otamendi

38. PN Campos de Tuyú

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Guide to Investment Opportunities in the Tourism Sector

5. The tourism sector The tourism sector is composed of Government agencies and private entities. Government agencies - National Secretariat of Tourism (reporting directly to the Argentine President’s Office) - Provincial agencies: each provincial Government has an agency in charge of all tourist activities under its jurisdiction - Municipal agencies: many cities, whether provincial capitals or not, support tourist offices responsible for tourism under their jurisdiction The National Secretariat of Tourism, with headquarters in the city of Buenos Aires, is responsible for assisting the President in dealing with all aspects related to tourism in Argentina, and for promoting international inbound tourism, domestic tourism and welfare tourism. The provincial agencies carry out promotional work and planning, adopt legal standards and supervise services. Municipal agencies are mainly dedicated to promoting attractions in their respective areas and providing information to visitors.

The Federal Tourist Council (el Consejo Federal de Turismo) is in charge of the coordination of government policies and tourism actions. It is an advisory agency composed of the National Secretariat of Tourism plus representatives of official tourist agencies of the City of Buenos Aires and of the 23 Argentine provinces. The Private Sector The Private sector is composed of organizations of privately owned tourist businesses which include professionals and operators of diverse services. These are members of the Argentine Chamber of Tourism (Cámara Argentina de Turismo-CAT). CAT’s objectives are to represent, support and promote the development of tourism in Argentina. CAT’s principal members are: - Argentine Association of Travel and Tourist Agents (AAAVYT) - Argentine Hotel and Catering Business Federation (FEGHRA) - Argentine Tourist Hotels Association (AHTRA) - Association of Buenos Aires Hotels, Restaurants, Cafeterias and Bars (AHRCC) - Business Chamber of Road Tourism (CETA) - Federation of Regional Tourism Chambers (FEDECATUR) - Association of Female Tourist Company Executives (AFEET) - Argentine Time-Share Chamber - Board of Airline Representatives (JURCA)

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Guide to Investment Opportunities in the Tourism Sector

The Argentine Chamber of Tourism (CAT) is governed by a Board of Directors and an Executive Committee composed of members proposed by each of the member organizations. CAT has the support of ad hoc Working Committees. Furthermore, CAT maintains a tourism institute and a tourist information center. In conjunction with the National Secretariat of Tourism, the Argentine Chamber of Tourism participates in trade missions, fairs and exhibitions abroad, with the objective of promoting inbound tourism.

Iglesia UquĂa, Quebrada de Humahuaca, Province of Jujuy

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Guide to Investment Opportunities in the Tourism Sector

6. Tourism product offer â&#x20AC;&#x201C; the private sector 6.1 The current position of the tourism sector In response to the growing demand in international tourism over the last few years, there have been important increases in the levels of investment for infrastructure in the hotel industry and in the creation of agencies for inbound tourism. This investment has increased both quantitatively and qualitatively, since the creation of new tourism options have been enriched with greater geographic diversity. As a result, the sector has developed an important network of resources and alternatives to meet visitorsâ&#x20AC;&#x2122; demands all over the country. In order to appreciate the importance of this network, the four main components of the tourist offer will be analyzed. These are: a) The Hotel Industry b) Travel Agencies c) Transportation d) Theme Spaces a. The Hotel Industry The current hotel capacity updated to 2008 reached 541.782 beds distributed among 11.455 establishments. This number, while important, for the most part reflects the traditional demand of internal tourism, and as such, many of the establishments are located in destinations on the Atlantic coast or in the sierras of Cordoba.

This reality translates into excellent business opportunities with high return on investment in regions all over the country.

Hotels Hotels 1*

962

Hotels 2*

848

Hotels 3*

628

Hotels 4*

264

Hotels 5*

Others (*)

8.695

Total

11.455

(*) Otros Apartament: Hotels, Non - category Hotels, Inns, Tourist residences, Tourist Ranches, Cabins, Motels, Boardhouses, Municipal Tourist Complexes, Mutual and Union Hotels, Hostels and Camps.

These are sites popular with internal tourists, but they do not generally figure in the plans of foreign visitors. Conversely, there is a serious shortage of establishments in areas such as the Patagonian Lakes region, the northern region, and even the city of Buenos Aires, although the latter has witnessed booms in construction of first-rate hotels in the 90â&#x20AC;&#x2122;s and again over the last two years.

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Guide to Investment Opportunities in the Tourism Sector

With respect to the distribution of beds, the majority are concentrated in the Buenos Aires region, as the following chart shows:

Distribution of beds per Region

250000

230485

200000

100000

57682

45706

Cuyo

50000

57.682

Cuyo

45.706

Litoral

67.581

Norte

49.192

Patagonia

91.136

Total

541.782

Source: SECTUR

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Patagonia

Centro

91136 49192

Norte

230.485

Ciudad y Provincia de Bs As

City & Province of Bs As

67581

Litoral

Beds

Centro

150000

Regi贸n

Guide to Investment Opportunities in the Tourism Sector

a.1 Investment in Tourist Lodging

Period to 2003 and 2008

The 1990’s witnessed significant investment in the Argentine tourism sector, but levels fell during the economic recession towards the end of 1998, and reached a low during the crisis of late 2001 and early 2002. With the economic recovery strongly underway since 2003, investment levels have recovered and increased relative to pre-crisis levels.

Following the recession and crisis, which reached its worst point during 2002, there has been a rapid development of the sector since 2003. In the context of the country’s economic recovery and of growth in the tourism sector especially, investment returned full-force, reaching 37 million dollars in 2003, rising significantly to 110 million dollars in 2004, reaching 152 million dollars in 2005 and rising significantly to 172 million dollars in 2006 and 177 million dollars in 2007. This upward trend held strong through 2008 as well, reaching roughly 317 million dollars.

Period to 2002 During the period 1991-2002, Argentine enterprises holding international hotel chain franchises invested roughly 770 million dollars in projects to open establishments throughout the country in the 3-, 4-, and 5-star categories, as well as in the highway lodging category, for a total of approximately 14,000 new beds. However, this investment was heavily concentrated in the highest categories of hotel, and spurred development in only certain areas of the country. Of the total of international franchise establishments opened, half were in the Autonomous City of Buenos Aires. The rest were distributed over few provinces, fundamentally Buenos Aires, Córdoba, and Mendoza.

Invertment in Tourism Establishments - U$S

3500000 3000000 2500000 2000000 1500000 1000000 500000 0 2003

2004

2005

2006

2007

Independent National Chains International Chains

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2008

Guide to Investment Opportunities in the Tourism Sector Investment Amunt per Region - U$S (year 2008)

Investment in Tourism Establishments

2006

2007

2008

International Chains

91.666.667

36.333.333

186.756.756

National Chains

56.666.667

22.433.333

24.594.594

Independent

24.114.693

118.141.667

106.499.134

Total

172.448.027

176.908.333

317.850.484

Centro 1%

Cuyo 27%

North 10% Litoral 9%

Buenos Aires 50%

Source: INDEC

Patagonia 3%

The total investment for 2008 was distributed among the different regions of the country in the following way:

31 Regi贸n Buenos Aires

Investment amount in dollars 157.919.000

Center

1.000.000

Cuyo

85.140.540

North

35.036.621

Litoral

29.540.540

Patagonia

9.213.783

Total Source: INDEC

The following table shows the number of establishments opened in the last three years:

317.850.484

2006

2007

2008

International Chains

National Chains

Independent

155

128

Total

171

142

Number of new lodgins

Source: INDEC

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Guide to Investment Opportunities in the Tourism Sector

Comparing these figures alongside the forecasts for increases in international inbound tourist arrivals and the constant growth of internal tourism, it is clear that even though the increase in hotel openings has been significant, in vast areas of the country conditions are excellent for new projects that can meet all segments of the increasing demand.

b. Travel Agencies With respect to the opening of new travel agencies, the latest information available shows that there are currently 4.535 agencies in all of Argentina with licenses granted by the National Secretariat of Tourism. As is the case with hotels, the largest number of agencies is located in the greater metropolitan area of Buenos Aires.

Regi贸n

Number of Agencies

1.527

34%

Province de Bs As

962

21%

Centro

353

North

287

Litoral

646

14%

Patagonia

476

10%

Cuyo

284

Total

4.535

100,0%

City of Bs As

Source: INDEC

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Guide to Investment Opportunities in the Tourism Sector

Travel Agencies per Region

Litoral 14%

c.1 Air Transportation

Patagonia 10% Cuyo 6%

North 6% Centro 8%

c. Transportation

Ciudad Bs As 35%

Provincia de Bs. As. 21%

An adequate transportation system from the point of view of both the quality and quantity of its services is essential for the proper functioning of the tourist activity. Given the size of Argentina, one priority transportation area needing strengthening is the domestic air travel system in order to improve the connectivity between tourist destinations. To that end, national authorities and private airline companies alike with great effort have recently made important strides in improving both the quantity and quality of the services offered. As regards domestic flights in year 2008 an annual average of 713 monthly frequencies was registered.

As such, the country offers a high level of demand for operators who set forth with a business mission of providing a high-quality international inbound tourism product, and especially for those who interact with supply of active tourism.

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Guide to Investment Opportunities in the Tourism Sector

The table below is a list of flight times from Buenos Aires to major destinations throughout the country:

From the city of Buenos Aires

Flight Time

From the city of Buenos Aires

Chapelco

2 hs. 10´

1.627

Rosario

52´

300

Córdoba

1 hs. 15´

713

Salta

2 hs.

1.616

Corrientes

1 hs. 20´

1.041

San Carlos de Bariloche

2 hs. 20´

1.630

El Calafate

3 hs. 15´

2.676

S. F. del V. de Catamara

1 h. 50´

1.132

Flight Time

Esquel

2 hs. 55´

1.980

S. Miguel de Tucumán

1 h. 50´

1.189

Formosa

1 hs. 35´

1.204

San Juan

1 h. 45´

1.265

Puerto Iguazú

1 hs. 45´

1.304

San Luis

1 h. 40´

835

La Rioja

1 hs. 50´

1.680

Santa Fé

1 h.

476

Mar del Plata

45´

407

Santa Rosa

1 h. 15´

819

Mendoza

1 hs. 50´

1.098

San Salvador de Jujuy

2 hs. 10´

1.645

Neuquén

1 hs. 55´

1.156

Santiago del Estero

1 hs. 45´

1.152

Paraná

1 hs. 30´

504

Trelew

2 hs.

1.436

Posadas

1 hs. 30´

1.004

Ushuaia

3 hs. 20´

3.171

1 hs. 25´

1.017

Viedma

1 hs. 30´

960

Resistencia Rio Gallegos

1 hs. 55´

Furthermore, Argentina is currently the origin or terminal for more than 100 air travel routes which link it to destinations all over the world. These destinations are the traditional routes to the rest of America and Europe (which have increasingly had stops eliminated so as to become direct flights). as well as New Zealand and Australia (transpolar flights), Malaysia, and South Africa.

2.799

During January 2008 a total of 822 weekly frequencies of international flights to Argentina was registered, that compared to year 2007, meant a 3% increase in week flights.

Following is a list of flight times from Buenos Aires to major destinations around the globee:

From the city of Buenos Aires

Flight Time

Nueva York

11 hs. 58´

Miami

9 hs. 08´

Houston

10 hs. 30´

Madrid

11 hs. 40´

Londres

14 hs.

Roma

13 hs. 10´

Frankfurt

13 hs. 35´

Sydney

17 hs. 30´

Tokio

24 hs.

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Guide to Investment Opportunities in the Tourism Sector

c. 2 Road and Highway Network The National Road Network totals 38,632 km., of which 81% is paved, 14% is gravel, and the remaining 5% is dirt. The Provincial Networks add up to a total of 191,813 km., of which 16% is paved (31,000 km.). This makes a total of approximately 230,000 km. of roads, with the province of Buenos Aires accounting for the greatest number of paved routes, followed by the provinces of Cordoba and Santa Fe. c. 3 Other Means of Transportation

There are also several tourist trains: The Tren de las Nubes, in the province of Salta, which climbs over 4.000 m. through a magnificent landscape; La Trochita, in the province of Chubut, an old Patagonian train with antique wooden coaches and a steam locomotive; the Ecology Train, at Iguazu National Park; the Historic Train from Villa Elisa (Entre Rios); the Tren de las Sierras, which joins the city of Cordoba with Capilla del Monte; the Tren Histórico a Vapor, in San Carlos de Bariloche (Río Negro); The Tren del Fin del Mundo, which, following the track of the old prison railroad, takes tourists from Ushuaia to the gates of the Tierra del Fuego National Park on a daily basis; and the Tren de la Costa, that skirts the Rio de la Plata with its renewed old and colorful branch line to Tigre.

Over the last few years, there has been an increase in the number of services offered of long distance automotive transportation (buses), with significant quantitative and qualitative improvements to the vehicles, destinations offered, higher frequency, and better service to neighboring countries. The railroad, which had nearly disappeared as a means of public transport, has started a process of recovery. This resurgence includes the restoration of the line to Pinamar and the renewed services to Mar del Plata, restored services to Rosario, San Miguel de Tucumán, and the restoration of the line between Buenos Aires and Posadas, as well as the recent incorporation of the Buenos Aires-Cordoba service.

Termas de Reyes, Province of Jujuy

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Guide to Investment Opportunities in the Tourism Sector

As regards sea transport, several cruise lines include Argentine ports in their destinations around South America. Antarctica is generating growing interest, with cruises that set off from Ushuaia. The river services to and from Uruguay have improved dramatically with the incorporation of state-of-the-art ferries which connect Buenos Aires and Montevideo in only 2 1/4 hours, and Buenos Aires and Colonia in 55 minutes. These services operate daily.

Caminito, Barrio La Boca Buenos Aires City

d. Theme spaces Argentina has not been left out of the global trend towards creating theme spaces to generate tourist offers. The aim of these spaces goes far beyond theme parks, of which there are few and all located in the city of Buenos Aires or nearby. Theme spaces deal with the theme as a concept and with activities as alternatives. In this sense, ski centers are becoming theme spaces, taking the snow concept as its basis, and skiing as just one of the options. Other examples of theme spaces are the different tourist routes, such as the ‘wine route’, with an already well-developed offer but to which new options may still be incorporated; and the ’tastes-and-smells-of-Patagonia’ route, the ‘Camino del Gaucho’ route, or some that are much more extensive, like the mythical route that runs along National Route 40. Proposals related to the Jesuit-Guaraní theme can also be included, and new hotels and restaurants linked to the theme concept are starting to appear. One of the strongest Argentine themes is the increasingly appealing tango theme with its epicenter in San Telmo, in the city of Buenos Aires. In relation to the use of thermal hot springs and therapeutic thermal mud, the old concept of taking a bath has been spun into hot spring parks, spatially distributed and requires a very interesting range of activities. There is still plenty of space for new investors in this field, especially considering the internationalization of the tourist offer.

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Guide to Investment Opportunities in the Tourism Sector

The table below indicates the distribution by province of thermal hot springs and therapeutic thermal mud baths.

Province

Number

Buenos Aires

Catamarca

Chaco

Córdoba

Entre Ríos

Jujuy

La Pampa

La Rioja

Mendoza

Neuquén

Salta

Santiago

San Juan

San Luis

Tucumán

Total

Source: INDEC

Infrastructure linked to fairs, congresses and conferences is also considered within theme spaces. Although Argentina has recovered lost ground on these proposals through the diversification of the cities where they take place, the appropriate spaces are still not always available.

Las Hayas, Ushuaia, Province of Tierra del Fuego, Antartida e Islas del Atlántico Sur

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Guide to Investment Opportunities in the Tourism Sector

The table below indicates the number of congresses per provinces or host city.

City

Number

Ciudad de Buenos Aires

411

Mar del Plata

130

Rosario

107

Córdoba

Mendoza

Provincia de Buenos Aires

Santa Fé

Tucumán

Salta

Entre Ríos

Bariloche

La Plata

Neuquén

Resto de país

Total

904

100

In spite of the growth and diversification of these spaces, supply remains low relative to both the international and the domestic demand; therefore, there are clear opportunities for low-, medium- and high-level investments.

Source: Argentinean Asociation of exposition and Congress organizers and suppliers

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Guide to Investment Opportunities in the Tourism Sector

7. Legal framework According to the federal system of the Argentine government, there are legal regulations ratified by the Federal Government as well as by the provinces and the Government of the City of Buenos Aires. The laws listed below constitute the body of Argentine law most directly related to the main topics of this guide.

- Transfer abroad the net profits obtained from their investments, as well as repatriate their investment at any moment. - Use any of the legal formalities of organization set forth by the national legislation. - Use domestic credit with the same rights and under the same conditions as local companies funded with national capital.

7.1 National Legislation a. National Tourism Act - Number 25997 The above mentioned National Tourism Act (Law Number 25997) is the main law regarding tourism activity throughout the country. The text refers to the regulation of the activity for the purpose of promoting its development. b. National System of Foreign Investments - Number 21382/93 Regulatory Decree Number 1853/93 This law states that foreign investors can make investments in Argentina without previous approval and under the same conditions as local investors. They are also allowed to:

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Guía de Oportunidades de Inversión para el Sector Turismo Province

Legislation

Title

C.A.B.A Provincia

Law N° 499/2000 Law N° 13.390

Corporation South Hotel Exception

Buenos Aires Catamarca Corrientes

Law 5.267 Law Nº 5.470

7.2 Program of Incentives to stimulate Tourism Investment Many provinces have specific instruments for the assistance and promotion of tourism investment. The specific regulations for each of the districts are included below.

Law Nº 5535 Law Nº 5683 Law Nº 5684

Córdoba

Law 3915 Law N° 5460 Law N° 5455 Law N° 7232

Entre Ríos

Law N° 9.621

Jujuy

Law N° 4179 Law N° 4513 Law N° 5428 Law Nº 1534

Chaco Chubut

La Pampa La Rioja Mendoza Misiones

Law 8300/09 Law N° 7833 Law N° 3084 Law N° 3045

Neuquén Río Negro Salta San Luis

Law N° 378 Law N° 2937 Law N° 6064 and 7281 Law Nº 7045 Law N° VIII-0514-2.006

Santa Cruz

Ley N° 1124

Santa Fe Santiago del Estero

Law N° 6838 Law N° 6.750

Tierra del Fuego

Law N° 19.640

Tucumán

Law N° 440 Laws N° 3805 and 6163 Laws N° 6705 and 7090 Law N° 7040 Laws N° 7142 and 7379 Law N° 7886

Decree N° 3346/08 Promotion Investment Regime Investment Promotion Regime Regulatory Decree Nº 1416/ 03 Tourism Provincial Law Investment Development Fund Regulatory Decree Nº 308/06 Industrial Development Fiduciary Fund Regulatory Decree Nº 306 Promotion Zones Decree N° 700/06 Decree N° 266/06 Tourism Promotion and Development Regime Regulatory Decrees N° 4557/85, 637/99, and 1360/00 Hotel Activity Start off Resolution N° 180/2006 GRD Declares Tourism Activity as of Priority Provincial Interest Micro-company Promotion Tourism Development Support and Promotion Mining and Industrial Promotion Regulatory Decree Nº 2560/94 Investment Promotion Tax Law Amendment of Article 85 of the Fiscal Code Employment, Production and Development Federal Agreement Regulatory Decree Nº 27/94 Regulatory Decree N° 1300/00 Regulatory Decree N° 1600/02 Economic Promotion Tourism Promotion Tourism Activity Promotion System Tourism Provincial Law San Luis Tourism Programme Decree Nº 4658- MC-2006 Regulatory Decree N° 5554-MC-2006 Economic Activity Promotion Decree N° 466/79 Decree N° 999/79 Decree N° 960/82 Hotel and Gastronomy Activity Promotion Industrial Promotion and Development Provincial System Decree N° 1.888 Especial Fiscal and Customs Regime Decree N° 9208/72 Tax Law Estate Granting Private Initiative Decree N° 1127/97 Private Investment Programme Decree N° 2012/01 Asset per Asset Investment Support System

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Guide to Investment Opportunities in the Tourism Sector

Legislation

Province

7.3 Hotel Accommodation Legislation

Buenos Aires Ciudad de Buenos Aires

Although Law Number 18828/70 and its Regulatory Decree Number 2253/70, which refer to hotel ranking, have not been revoked, they have seen their scope restricted since the National Territory of Tierra del Fuego has become a province and the City of Buenos Aires has become an autonomous government. These establish the following categories: Lodge, Motel, and 1- to 4-star Hotels. The provinces have their own ranking standards that, for the most part, should be updated. These are:

Catamarca Córdoba

Decree N° 659/07 By-Law N° 36136/80 Decree N° 1199/80 Law N° 6483/80 Decree N° 1359/00

Corrientes

Decree N° 530/80

Chaco

Law N° 3915/05

Chubut

Decree N° 1264/80; Resolution N° 129-OPT/97 Resolution N° 088-OPT/00 Resolution N° 022-OPT/03 Law 5385 Decree 1552/99 Law N° 7360

Entre Ríos

Decree N° 7205 Decree N° 3024/83 Amendments N° 433/84 and N° 5029/87

Formosa

Decree N° 457/85

Jujuy

Law N° 3804/81 Decree N° 777-h/81

La Pampa

Decree N° 2686/78

La Rioja

Decree N° 1622/79

Mendoza

Resolution N° 568/07

Neuquén

Decree N° 2790/99

Río Negro

Decree N° 657/03 Resolution N° 228/05

San Luis

Decree N° 3505/80 Law N° 517/06

Santa Cruz

Law N° 1045/76 Decree 1073/80 and amendments

Santiago del Estero

Law N° 4967/81 Decree N° 3163

Tierra del Fuego

Law N° 65/93 Decree N° 2621/93 Law N° 342/96 Decree N° 477/01

Tucumán

Law N° 5204/82 Resolution N° 5153/03 (EATT)

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Guide to Investment Opportunities in the Tourism Sector

7.4 Environmental Legislation Any action aimed at preserving the environment is a priority concern in Argentina. One of the country’s competitive advantages regarding tourism is the conservation of its natural environment. Through the Federal Environmental Agreement, (Pacto Federal Ambiental) the federal government and the provinces have agreed to promote sustainable development policies throughout the country. They set Framework Agreements to speed up and manage the process of conserving the environment more efficiently, according to the “Program 21” postulates approved at the UNITED NATIONS CONFERENCE ON ENVIRONMENT AND DEVELOPMENT (UNCED’ 92).

The following federal regulations, have also been adopted by the provinces:

Aire

Ley 23724/89

Agua

Decreto 776/92

Bosques Nativos

Ley 21695/78 Decreto No. 710/95

Convenio de Viena para la protección de la capa de ozono Control de contaminación de las aguas y preservación de recursos humanos

Ley de defensa y promoción de la Riqueza Forestal Texto ordenado de la Ley de defensa de la Riqueza Forestal

Ley 22351/80

Parques Nacionales, Reservas Nacionales y Monumentos Naturales

Decreto 83/83

Reglamento de la ley 22351/80

Suelo

Ley 22428/81

Conservación y recuperación de la capacidad productiva de los suelos

Flora y Fauna

Decreto No. 666/97

Areas Protegidas

Ley 22344/80

Conservación de la fauna silvestre Convención sobre el convenio Internacional de comercio de especies amenazadas de flora y fauna silvestre

Residuos Peligrosos

Ley 24051/91

Regulaciones de residuos peligrosos

Decreto No. 181/92

Prohibición de transporte, introducción e importación de desechos peligroso

Decreto No. 831/93

Reglamento de la Ley 24051/91

Biodiversidad

Ley 24375/94

Aprobación de Convenio sobre diversidad biológica

Energias alternativas

Ley 25019/98

Se declara de interés general la generación de energía eólica solar en territorio nacional

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Guide to Investment Opportunities in the Tourism Sector

7.5 The Tax System a. Income Tax (Number 20628/73 and its amendments) Partnerships: A 35% rate is applied to net income subject to tax. Distribution of dividends is not subject to tax. Losses suffered during a specific tax year may be carried over to the next tax years, up to a maximum of 5 years, on the following. Individual and intestate successions: Personal compensation is assessed according to a scale that ranges from 9% to 35%; the corresponding amounts are withheld at source. b. Value Added Tax (VAT) (Number 23349/86 and amendments) Tax through which a 21% general rate is applied on almost all personal property sales in the local market. The law establishes some exceptions as to payment of the tax and lower rates. c. Transfer tax Transfer of real estate by individuals and intestate successions are taxed with a 1.5 % rate on the value of property.

d. Tax on interest paid and financial cost of business indebtedness A 15% rate is applied to partnerships on the amount of interest and financial cost paid. This tax is deductible from income tax. e. Asset tax (Number 25063/98) The tax to be claimed will arise from the application of a one per cent (1%) rate levied on company assets, as from an exempted minimum of $200.000; above this figure the total amount of assets will be subject to tax. Income tax established for the same tax year in which this tax is paid shall be computed as an advance payment. f. Social security The welfare system has been reformed under Law Number 24241/93, which established the Integrated System of Retirement and Pensions (Sistema Integrado de Jubilaciones y Pensiones, SIJP) that covers old age, disability and death, and it has been incorporated into the Single Social Security System (Sistema Único de Seguridad Social, SUSS). The employer’s contributions to retirement, benefit programs (health insurance), family allowances and others, amount to 33% of the employee’s gross salary.

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Guide to Investment Opportunities in the Tourism Sector

7.6 Legal framework for companies a. Legal structure of companies The most common types of partnerships in Argentina are corporations, limited liability companies and branches of foreign companies. In recent years, joint ventures and franchising agreements have also become more and more usual. In every case, foreign companies operating in Argentina must appoint legally responsible individuals and keep separate accounting records for their operations in the country. a.1. Corporations Corporations must have at least two shareholders and shares can be held by private holders or may be publicly offered. This is the only type of partnership in which shares may be offered to the public. The shareholders’ liability is limited to the capital contributed. The Board is responsible for the management of the corporation. The directors are appointed during the annual meeting of shareholders. The directors are personally liable for their actions.

All corporations are subject to supervision and inspection by government bodies. - Corporate shares are traded on the Stock Exchange through the Comisión Nacional de Valores, similar to the “Securities Exchange Commission” (SEC) in the United States. - Banks are monitored by the Central Bank, (Banco Central de la República Argentina - BCRA). - Private partnerships are monitored by the General Judicial Inspection (Inspección General de Justicia - IGJ). a.2 Limited Liability Partnership Many of its characteristics are similar to those of corporations, except: - Its shares cannot be traded on the Stock Exchange. - The number of partners cannot exceed 50. - A Corporation cannot be a partner. - A change of partners implies the modification of the specific partnership agreement. - The procedures for its creation are simpler and relevant statutes are more flexible.

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Guide to Investment Opportunities in the Tourism Sector

a. 3 Branches of Foreign Companies In order to legally operate as a branch, it is necessary to prove the existence of a head office abroad, to register its by-laws, its incorporation agreement or its partnership agreement at the Public Registry of Commerce (Registro PĂşblico de Comercio), to appoint representatives and to register them in the same way. Branches are subject to ongoing monitoring by the Associations Control Organization and must fully comply with all the requirements applied to corporations subject to such control. Branches must keep separate accounts from those of the head office and must submit financial statements to the Associations Control Organization. a. 4 Joint Ventures There are different types of joint ventures. The most common are cooperative associations and consortiums (Uniones Transitorias de Empresas- UTE). The purpose of cooperative associations is for the two parties to help each other develop certain aspects of their business to improve or increase their outputs.

- They are not separate legal entities; therefore, their members assume unlimited liability for the company obligations and they must operate independently. - Their members may be businessmen living in the country, locally-created entities or non-resident companies which have set up a branch or have another type of participation in Argentina. -Agreements must be registered at the Public Registry of Commerce (Registro PĂşblico de Comercio) and must include objectives, duration, name and other information related to the partnersâ&#x20AC;&#x2122; liabilities, financial contributions, and other legal implications. a. 5 Franchising The Code of Commerce acknowledges and protects franchising agreements.

Consortiums (UTE) are joint ventures created to meet a specific goal and they operate during a limited period of time. Both types of joint ventures share the following characteristics:

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Guide to Investment Opportunities in the Tourism Sector

APPENDICES 5.984 - 210.000 - 50% - 10.500 - 38.496 - 7.400 - 550.300 - 9.124 - 8.100 - 450.314 - 80.200 - 4.000 - 572.000 - 5.984 - 210.000 - 50% - 10.500 - 38.4 - 26.000 - 597 - 5.3600 5.000 - 7.550 - 22.390 - 5.984 - 20.000 - 50% - 10.500 - 38.496 - 7.400 - 32.280 - 30.698 - 46.000 - 72.300 - 31152.000 - 7.550 - 22.390 - 5.984 - 44.000 - 0% - 56 - 584 - 44.000 - 57.820 24.500 - 38.496 - 7.400 - 32.280 - 100% - 9.124 - 82.000 - 7.550 - 22.390 - 77.500 - 31.500 - 72.000 - 550.420 - 820.530 - 42.496 - 7.400 -32.280 - 562 - 21.900 - 543 - 56% 470.000 - 9.200 - 455.900 - 100% - 47.390 - 8.330 - 71.000 - 50% - 24.640 - 45.300 - 9.400 - 62.280 - 71.950 - 310.280 - 8.000 - 35.600 - 873.695 - 50.000 - 9.200 - 49.690 - 100% - 8.300 - 569.877 - 564

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Guide to Investment Opportunities in the Tourism Sector

Appendix 1 Geography and Climate

Area

The Argentine Republic is the largest Spanish-speaking country. It is located in the southernmost part of South America, with a shape that resembles a huge triangle resting against the Andes mountain range. Of its 2.8 million square kilometers of American continental area, about 54% are plains (grasslands and savannas), 23% plateaus, and the rest, another 23%, mountain ranges. Argentina is the eighth-largest country in the world and the second-largest in Latin America, after Brazil. The American continental borders are:

Surface

Km2

Total

3.761.274

American Continent

2.791.810

Antartic Continent

696.464

Borders length

47 Borders

North

Bolivia and Paraguay

East

Brazil , Uruguay and the OcĂŠnao AtlĂĄntico

West

Chile

Southr

Beagle Channel

Borders

Km2

Total

25.728

With bordering countries

9.376

Chile

5.308

Bolivia

742

Paraguay

1.699

Brazil

1.132

Uruguay

495

Source: IMilitary Geographical Institute

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Guide to Investment Opportunities in the Tourism Sector

As regards its relief, the country contrasts its vast plains which spread to the east and the north with the western mountain region (the Andes Mountain Range). Besides, Patagonia has, in the south, a group of layered plateaus that stretches from the mountain range to the sea coast.

Cota en metros de altura

0-100 24% 101-200 21%

201-500 19%

2001-6959 10%

501-2000 26%

As the altitude map shows, the Argentine territory rises to the west, reaching its maximum altitude in the Andes Mountains. The Argentine plains can be divided into three main areas: the Mesopotamian plain, the Chaque単a plain and the Pampeana plain. The north of the Mesopotamian plain is typified by a reddish soil covered by thick subtropical forest; towards the south, the soil turns clayey, and there are wetlands.

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Guide to Investment Opportunities in the Tourism Sector

The Chaqueña plain has clayey soil and low regions, and there are many streams and marshlands; rains are not so frequent turning to the west where the Chaqueño woodlands can be found. The Pampas have a mild climate; in this region of prairie covered with young pastures, the soil is rich in humus; towards the west the Pampa gets sandier and the vegetation is limited to coarse grass and woody and prickly plants. The western mountain regions comprise diverse geographic environments. The Puna de Atacama is located in the northwestern end; it is a high, barren, and cold plateau which stretches towards Chile and Bolivia. It has a rocky landscape and vast saltpeter beds, surrounded by few bushes with coarse grass. The Andes mountain range extends from the Puna to the south. The highest peaks are in the central area, including Aconcagua (6,959 m), which is the highest mountain in America and in the whole western hemisphere; there, the perennial snow dominates an awe-inspiring landscape. The height of the mountain range decreases to the south and the scenery includes transverse valleys, some of which offer beautiful lakes framed by coniferous woods. Between the foothills and the eastern plains we find the Sierras Pampeanas, mountain chains oriented from north to south that form five different systems separated by valleys, plains, or woods.

Patagonia extends from the Colorado River to the south, and occupies nearly a third of the territory of the country. The weather there is cold and windy, with infrequent rain. The soil is dry and vegetation scarce, except in the western region, the Andean sector, which is covered by woods, lakes and glaciers. The valleys are fertile in the area in which rivers receive rain and melt waters from the Southern Andes As regards the climate, altitudes, and reliefs, the north-south extension gives the country four main types of weather: mild, cold, hot and dry.

Temperatures per Region -ºC

30 25 20 15 10 5 0 -5

Ene

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

-10 -15 Center

Litoral

Antártida Argentina

North

Buenos Aires

Patagonia

Cuyo

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Dec

Guide to Investment Opportunities in the Tourism Sector

Mean Temperatures in Tourist Centers Córdoba

Salta

Mendoza

Puerto Iguazú

Buenos Aires

Mar del Plata

San Carlos de Bariloche

Lago Argentino

Peninsula Valdés

Antártida Argentina

Ene

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

24,8

23,3

21,6

18,2

15,5

12,2

12,3

13,5

16,3

19,4

21,4

23,8

76,6

73,94

70,88

64,76

59,9

53,96

54,14

56,3

61,34

66,92

70,52

74,84

21,9

20,7

19,6

11,6

12,8

15,5

18,6

20,3

21,6

71,42

69,26

67,28

57,2

52,88

55,04

59,9

65,48

68,54

70,88

24,2

22,4

20,2

15,9

12,5

9,2

9,1

10,9

13,9

17,5

20,2

75,56

72,32

68,36

60,62

54,5

48,56

48,38

51,62

57,02

63,5

68,36

73,4

25,7

24,7

17,9

16,1

16,6

17,3

19,1

21,2

22,8

24,9

78,26

78,8

76,46

64,22

60,98

61,88

36,14

66,38

70,16

73,04

76,82

24,4

23,3

21,7

14,9

11,8

12,6

14,9

17,5

23,3

75,92

73,94

71,06

64,4

58,82

53,24

54,68

58,82

63,5

73,94

20,2

20,3

19,1

15,9

12,4

9,6

9,2

9,7

11,1

13,5

15,7

18,18

68,36

68,54

66,38

60,62

54,32

49,28

48,56

49,46

51,98

56,3

60,26

64,72

13,4

13,6

11,3

5,6

2,6

2,2

3,4

5,3

7,4

9,9

12,3

56,12

56,48

52,34

46,4

42,08

36,68

36,96

38,12

41,54

4,32

49,82

54,14

13,5

13,1

10,7

7,6

3,6

1,2

0,9

2,4

5,3

8,4

10,8

12,5

56,3

55,58

51,26

45,68

38,48

34,16

33,62

36,32

41,54

47,12

51,44

54,5

20,2

19,8

17,6

14,1

10,2

7,6

7,3

8,3

10,7

13,1

16,7

22,1

68,36

67,64

63,68

57,38

50,36

46,68

45,14

46,94

51,26

55,58

61,52

71,78

0,5

0,2

-1,8

-6,1

-8,7

-10,4

-8,4

-2,6

-1,3

-0,2

32,9

33,8

32,36

28,76

21,02

16,34

13,28

16,88

27,32

29,66

31,64

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Guide to Investment Opportunities in the Tourism Sector

Appendix 2 Demographics The last census, which took place in 2001, showed that the population in Argentina totals 36 million, approximately. This means an increase in the population of about 11% compared to 1990. According to estimates provided by INDEC, by 2010, the population will reach about 41 million. The most crowded districts are the City of Buenos Aires, and the provinces of Buenos Aires, Santa Fe, and Córdoba. In contrast, the provinces of Tierra del Fuego, Santa Cruz, La Pampa, La Rioja, and Catamarca are less densely populated. In general, there is a higher concentration of inhabitants in the Pampa region, in the middle of the country, that is, mainly in the metropolitan area of Buenos Aires. The Patagonian region, in the south of the country, is the least densely populated. It can be concluded that the population distribution in Argentina is irregular, with some densely populated areas and with many others which are nearly deserted. However, the last census has shown that the rate of population growth in the provinces from the Pampa region is below the rate of the rest of the country. The country has a high rate of urban population, which makes up about 90% of the total population.

Population Province

1991

2001

Total

32615528

3644602

City of Buenos Aires

2965403

-189265

Buenos Aires(*)

12594974

1232229

Catamarca

264234

70766

Chaco

839677

144769

Chubut

357189

55811

Córdoba

2766683

300118

Corrientes

795594

135397

Entre Ríos

1020257

137890

Formosa

398413

88146

Jujuy

512329

99559

La Pampa

259996

39298

La Rioja

220729

69254

Mendoza

1412481

167170

Misiones

788915

176607

Neuquén

388833

85322

Río Negro

506772

46050

Salta

866153

212898

San Juan

528715

91308

San Luis

286458

81535

Santa Cruz

160000

36958

Santa Fe

2798422

202279

Santiago del Estero

671988

132012

Tucumán

1142105

196418

Tierra del Fuego, Antartida

69369

31710

e Islas del Atlántico Sur

(*) 24 districts in Greater Buenos Aires - 8,684, 437 inhabitants (2001) The rest of the province of de Buenos Aires - 5,142,766 inhabitants (2001) Source: INDEC - Census 2001

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Guide to Investment Opportunities in the Tourism Sector

The cities of Córdoba and Rosario, also in the Pampa region, have over one million inhabitants each. Next on the list are the cities of Mendoza, in the Cuyo region, and San Miguel de Tucumán, in the northwest of the country, which are important regional centers.

Population growth per Region

2001

35000000

1991

30000000 25000000 20000000 15000000

City

Population

Buenos Aires

11.460.000

Córdoba

1.368.000

Rosario

1.161.000

Mendoza

848.000

San Miguel de Tucumán

738.000

Mar del Plata

694.000

La Plata

541.000

Salta

468.000

Santa Fé

454.000

San Juan

421.000

10000000 5000000

Total

Patagonia

Litoral

North

Cuyo

Centro

Buenos Aires

As regards major urban agglomerations, there is a high concentration of people in the metropolitan area of Buenos Aires and its surroundings, which contain nearly a third of the total population (about 11.5 million inhabitants in 2001).

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Guide to Investment Opportunities in the Tourism Sector

With a little more than 36.2 million inhabitants, Argentina is the fourth most densely populated country in Latin America (after Brazil, Mexico, and Colombia). The annual growth of population during the last several years has been similar to the average growth in the rest of the region. Due to the size of its population (similar to those in Spain or Poland), Argentina is considered a medium-sized country.

Main cities population

14000000 12000000 10000000 8000000 6000000 4000000 2000000

San Juan

Santa FĂŠ

Salta

Mar del Plata

La Plata

S. M. de TucumĂĄn

Mendoza

Rosario

Cordoba

Buenos Aires

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Appendix 3 Socioeconomics and Education Even though Argentina went through a very severe crisis at the end of 2001, which was the consequence of a deep recession that had started in 1998, since 2003 the country has enjoyed a strong economic recovery. The GDP rate of growth was 8.8% in 2003, 9.0% in 2004, 9.2% in 2005, 8.5 % in 2006, 8.7% in 2007 and 7% in 2008. GDP growth rate

384.201

400000 350000 300000

256.024

279.141

304.764

330.565

359.190

250000 200000 150000 100000 50000 0 2003

2004

2005

2006

2007

2008

The unemployment rate has decreased to 7.9%, from levels close to 20% in 2002. The tourism sector has been one of the mainstays of this recovery, as that sector constitutes a significant source of employment. All forecasts predict the country maintaining the rate of growth.

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Education A policy strongly oriented towards creating a more educated population makes Argentina one of the countries with the lowest level of illiteracy, comparable to developed countries, especially if we consider that the rate of illiteracy in Argentina is 3% while the average in Latin America runs as high as 11%.

Illiteracy Rate 14%

14%

12% 10% 9%

- 38 National Universities - 41 Private Universities - 6 Public University Institutes - 12 Private University Institutes - 1 Provincial University - 1 Foreign University - 1 International University

6% 4% 2%

In most districts, education is compulsory and free for 5- to 14-year-old children. In some of districts, this extends to children up to 15 or 18 years old, and attendance to primary school reaches 98%. At present, over 11 million people go to some kind of educational institution in Argentina. Moreover, about 4.4 million Argentines have access to college or university education. (Indec) The Argentine University System is composed of:

From 1998 to 2003, there was an increase of 37.5% in students attending the universities mentioned above.

Brasil

MĂŠxico

Portugal

Chile

Argentina

EspaĂąa

Italia

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Guide to Investment Opportunities in the Tourism Sector Appendix 4 Main Attractions City of buenos aires and its surroundings The City of Buenos Aires is located at 34 36’ 30’’ south latitude, similar to the capital of Australia, Canberra, and is located on the shore of the Río de la Plata. This huge estuary, the widest in the world, has a length of about 300 km and the distance between its edges varies between 40 km. at its narrowest point and 270 km. at its mouth in the Atlantic Ocean. Although the city covers an area of 200 km and a perimeter length of 57.7 km, this region extends to the nearby districts of the Province of Buenos Aires, and the vast suburbs are home to about 11.5 million inhabitants, nearly a third of the population. Buenos Aires provides visitors with an attractive cultural pluralism, from the eclecticism of the architecture to the ethnic variety of its inhabitants and the diversity of its restaurant offer. In the capital of Argentina it is possible to enjoy the alternatives of “criollo” dishes, or eat at Arabian, Chinese, Japanese, Korean, Russian, German, English, French, Spanish, Italian, Mexican, Basque, Greek, Hungarian, or Scandinavian restaurants. The cultural heritage includes the Colón Theatre, a national historic monument, one of the world’s major music and lyric halls, and the Coliseo, Cervantes, General San Martín, and Presidente Alvear theatres; the Auditorio Belgrano and the Recoleta, Ricardo Rojas and Jorge Luis Borges cultural centers, and 55 private theatres.

There are also 80 museums, over one hundred art galleries, hundreds of bookshops, 24 libraries and a planetarium. Numerous antique shops, elegant shopping centers and a large number of beautifully designed boutiques are also found. The nightlife is particularly busy, especially downtown, where you can find the most important show centers, nightclubs, discos, coffee shops, or places where you can enjoy watching or dancing tango or folk music. Particular and unmistakable soul. As Borges used to say “a silent magic which captivates nearly everyone who arrives in it”.

Basílica Nuestra Señor del Pilar, Buenos Aires City.

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Tigre

Luján

This jungle-like, almost tropical region, made up of water labyrinths and hundreds of islands that form the Delta del Paraná, is located very close to Buenos Aires, rare as it may seem. In this vast area, one finds several nautical and yachting clubs, country and weekend houses, as well as a whole array of restaurants, inns, together with excursions that offer the opportunity to travel around and enjoy this amazing riverside area. On the way to Tigre, one may travel through the residential area of Buenos Aires, to the north of the city: Vicente López, Olivos, with its yachting harbors, and San Isidro, with its wonderful historical town centre and its traditional racetrack.

This city, located on the banks of the Río Luján, 71 km away from Buenos Aires, on Acceso Oeste highway, is best known for its magnificent Gothic Basilica, Argentina’s main religious shrine, with towers 106 meters high that rise on the Pampean plain. The statue of the Virgin Mary, the Virgin of Lujan, well-known throughout the Catholic community, is worshipped there. This place also offers visitors a valuable historical museum.

La Plata To the south, 56 km. way, La Plata, capital city of the Province of Buenos Aires, boasts a harmonious urban grid plan, uniquely devised. Founded in 1882, La Plata is a modern city with well-landscaped green spaces, several universities and museums, as well as cultural and educational centers. At the turn of the century, all these attributes made it the meeting point for distinguished professors and researchers, as well as a student body from the provinces and abroad. The National Science Museum, National Historical Site, has earned international renown for its specialized collections and publications..

Club de Regatas La Marina, Tigre, Province of Buenos Aires

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The Atlantic Coat The coastal region of the country starts at the mouth of the Río de la Plata, south of Samborombón Bay, and stretches alongside the Buenos Aires and Patagonian coast for more than 4700 km. This vast coastal region offers numerous beaches and ports. The Province of Buenos Aires has the best-equipped seaside resorts, with the mildest weather conditions. Santa Teresita, San Bernardo, Mar de Ajó, Pinamar, Villa Gesell, Mar del Plata, Miramar, and Necochea are the most popular resorts. Mar del Plata

exquisite gastronomic offer, including the best seafood, world-famous Argentine beef or Italian pasta. There are also shopping areas, where tourists seek mainly fine woolen clothes, another one of Mar del Plata’s specialties. Besides nautical sports, visitors can practice golf, tennis and horseback-riding. Fishing lovers can use the pier of the Club de Pescadores and other minor piers, as well as two extensive stone breakwaters that extend from the beach into the sea, where two currents meet, a warm one from Brazil and a cold one from the Falklands. Given its diversity of fish species, Mar del Plata boasts a major fishing fleet. The smallest vessels, colorful motor boats, make the fishing port one of the most frequented places in this beautiful seaside city, the Pearl of the Atlantic coast.

When in the late 19th century, Patricio Peralta Ramos donated a coastal sector of his lands to the province of Buenos Aires for the foundation of a seaside resort, he could never have dreamed that he was promoting the birth of one of the largest tourist cities in the world. Just like San Carlos de Bariloche is, symbolically, the capital of the Southern Lakes, Mar del Plata, 400 kilometers away from the City of Buenos Aires, may be considered the tourist hub of the extensive coastal region. With a regular population of 541,000 inhabitants and accommodation capacity for over one million tourists, this city offers visitors a lot more than fine-sand beaches stretching along 21 kilometers. As far as nature is concerned, the sea and the nearby mountains add splendor to an exceptional landscape; the city itself offers a diversity of cultural options, such as theatres, cinemas, recitals and concerts. From mid-December to early March, the best shows of the Capital City move to Mar del Plata: plays, musicals, live-music cafes and other shows compete in the many movie theatres. Three casinos open their doors every day. Visitors can also enjoy an

Mar del Plata, Province of Buenos Aires

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Península Valdés There are many natural reserves on the Patagonian coastal region, where a diversity of marine fauna species are protected. But none offers such a spectacular cluster of animals as Valdés Peninsula. Located 1400 kilometers to the south of the City of Buenos Aires, in the province of Chubut, it juts out into the sea and forms two warm water gulfs, a meeting point for southern right whales that come here every year for the mating season starting in May. On the Northern side of the Peninsula, we find the only continental elephant seal habitat in the world. These animals owe their name to their distinctive trunk-like nose which is inflated when they are angry or in heat; they can reach 7 meters in length and 3 tons in weight. These mammals feed on fish, squids and octopae, and can submerge as deep as 200 meters in search of a tasty morsel. The Peninsula is also home to large seal colonies that coexist with a diversity of bird species. On the land you can see rheas (American ostrich), maras (Patagonian hare), and guanacos. On the shores of Golfo Nuevo lies Puerto Madryn, a city founded in 1865, upon the arrival of Welsh settlers, which is now an attractive tourist resort. It has been nicknamed the “Argentine underwater capital” for its setup for practicing, particularly, scuba diving and underwater fishing. The practice of these sports is possible thanks to the transparency of its waters that allow sunlight penetration to a depth of 70 meters.

Avistaje de ballenas en Peninsula Valdés, Province of Chubut

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Ushuaia

Glaciar Perito Moreno

Ushuaia, capital city of the province of Tierra del Fuego, Antártida and Islas del Atlántico Sur, is the world’s southernmost city. It has a regular population of around 50,000 inhabitants. Ushuaia is located in an incredibly beautiful natural setting, at the base of the Martial mountain chain, overlooking a deep bay bathed by the blue waters of the Beagle Canal. It is one of Argentina’s main tourist destinations. Ushuaia has a modern airport and offers visitors comfortable, cozy hotels, as well as a picturesque architectural design where modern buildings coexist with old Patagonian houses made of veneer or wood, with steep roofs and bright colors. Other attractions include the Museum of the End of the World and the facilities of an antique prison dating from the early twentieth century.

Perito Moreno is the most spectacular of the 47 major glaciers descending from the “Patagonian Continental Ice Field” which are part of Los Glaciares National Park, in the province of Santa Cruz, declared a World Heritage Site by UNESCO in 1981. Such a wonder of nature, which in February 1899 was 750 away from the rocky slope of Magallanes peninsula, has advanced and its icy wall now lies on this peninsula. A catwalk and viewpoint system provides the opportunity to admire all the splendor of this constantly active, icy, 195 sq. km river. Ice blocks regularly break off the main front (4500 meters wide with a height of 60 meters above the surface of the water) and fall with a thunderous splash into the waters of Canal de los Témpanos, one of the deep arms of Lago Argentino. Some 80 km away from the glacier stands El Calafate, a tourist villa that has grown significantly over the last years and is the gateway to the glacier region.

Faro Les Eclaireus, Province of Tierra del Fuego, Antártida e Islas del Atlántico Sur.

Glaciar Perito Moreno, Province of Santa Cruz

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San Carlos de Bariloche

The wine route

Situated on the southern bank of Lago Nahuel Huapi and at the base of Cerro Otto, this city of 95,000 inhabitants that provides accommodation for over 15,000 people, is another major Argentine tourist resort. Located in the province of Rio Negro, it is the epicenter of a vast and beautiful lakeside area whose main cities are Esquel to the South and San Martín de los Andes to the North. Other nearby tourist resorts in the same region are Villa La Angostura and El Bolsón. Cerro Catedral Ski Resort (2388m), located near San Carlos de Bariloche, offers excellent infrastructure coupled with amazingly beautiful scenery that boasts a lake, islands, the city, woods, the sky, all the colors of the rainbow, and the dry, light, mountain air. It is the main ski resort in the country and in Latin America. .

It comprises the most important wine production centers of the provinces of Mendoza and San Juan, in the Cuyo region, such as wineries, vineyards, site museums and farms. Some examples include the Panquehua wineries and vineyards in the district of Las Heras and the Arizu wineries and vineyards in San Rafael and Godoy Cruz, province of Mendoza, or the farms that once belonged to Messrs. Giol and Gargantini, all of which are National Historical Sites. In the province of San Juan, it is worth mentioning the vineyards in the oasis of Tulum or those of Camino a La Laja, to the north, on the outskirts of the capital city, with wineries Resero and Peñaflor.

San Carlos de Bariloche, Province of Rio Negro

Viñas en la Province of Mendoza

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Ischigualasto – Talampaya

Valles Calchaquíes

Ischigualasto Provincial Park, in the province of San Juan, is one of the most important paleontological fields in the world, stretching along a 25 km long and 10 km wide area. In this park are found the remains of vertebrates that inhabited that region in the Mesozoic era, 180 million years ago. Visitors will also find traces of saurian footprints, fern imprints, and trunks of petrified araucarias. The landscape offers an amazing variety of shapes and colors. Some of the main attractions of Talampaya National Park, an area of 215,000 hectares in the province of La Rioja, are its formidable red rocky outcrops and thousands of fantastic shapes carved by erosion. The most visited part is a 3 km canyon, where one can find all sorts of formations and walls of rock over 150 meters high. There are also valuable archaeological remains, such as Precolumbian mortars and stone engravings. Ischigualasto and Talampaya belong to the same valley that extends over a surface of nearly 5000 sq. km and were included on UNESCO’s World Heritage list.

To the Northwest of the country, covering part of the provinces of Salta, Tucumán and Catamarca, lay the Valles Calchaquíes. This vast geological depression is crossed by two rivers, the Calchaqui River, from north to south, and the Santa Maria River, in the opposite direction, which run through a landscape marked by an amazing physical and cultural contrast. This region has been inhabited since Precolumbian times. The first settlers were the Indians, followed by the Spaniards. Nowadays, these valleys offer travelers a cozy oasis surrounded by a desert-like environment. Willows, poplars, carob trees and molles surround grape, pepper, potato and corn fields. Its hamlets and small villages are valuable examples of a simple and harmonious colonial architectural style.

Parque Nacional Talampaya, Province of La Rioja

Parque Nacional Los Cardones, Province of Salta

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Quebrada de Humahuaca

Cataratas del Iguazú

Beyond the Valles Calchaquíes, closer to the Bolivian border, in the province of Jujuy, the Quebrada de Humahuaca runs parallel to the Río Grande and national road 9. This ravine is famous for its multicolored hills and the beauty of its colonial chapels that house Indian American art treasures. The Collas– indigenous peoples that inhabit the ravine settlements– possess very rich cultural traditions. During the great number of religious and pagan festivities celebrated in a colorful atmosphere throughout the year, the music of the wild bagualas, the sweet and soft vidala or the lively carnavalito, accompanies dances and processions. The Quebrada is included in UNESCO’s World Heritage List.

Iguazú Falls, declared Heritage of Humanity by UNESCO, located in the province of Misiones, on the Brazilian border, are among the world’s natural wonders. The forest surrounds the Iguazú river which opens up forming 275 waterfalls that plummet down seventy meters with a thunderous roar. When the waters reach the base of the falls, they vaporize into an extremely fine mist that rises into the air forming an infinite number of rainbows. The extraordinarily beautiful and diverse flora and fauna of the Falls make them an impressive scenario, protected by the Iguazú National Park.

Cerro de los Siete Colores, Province of Jujuy

Parque Nacional Iguazú, Province of Misiones

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Misiones Jesuíticas

Esteros del Iberá

The Misiones Jesuíticas of Guarani indians “represent an unprecedented economic and socio-cultural experience in the history of peoples”, stated the UNESCO in November, 1984, when the agency acknowledged they deserved to be on the World Heritage List. There are four main settlements or “reducciones”: San Ignacio, Loreto, Santa Ana, and Santa María La Mayor. One can visit them in a 296-kilometer circuit while enjoying the great panoramic beauty of the province of Misiones. These “reducciones”, established in Argentine territory during the first half of the 17th century, were part of the 33 peoples that made up the old Jesuit Province of Paraguay.

The Iberá Provincial Reserve is a complex natural ecosystem of swamps, marshes, lagoons and inlets that stretch for more than one million hectares, almost 15% of the area of the province of Corrientes. This is an extraordinary aquatic environment, almost completely untouched, that boasts not only a splendid flora and fauna, but also valuable archaeological fields. The pathways of the Iberá interpretation center enter the woods and allow one to appreciate the great diversity of animal and plant species that inhabit this place. In this paradise for bird watching or underwater photography, some of the activities offered to tourists include tours on light boats driven by local guides, and horseback rides.

Misiones Jesuíticas, Province of Misiones

Esteros del Iberá, Province of Corrientes

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Estancias Jesuíticas

Cueva de las manos of alto río pinturas

The Jesuit ranches of the province of Córdoba, which have survived to today thanks to carefully preserved architecture, clearly demonstrate the productive organization of the religious order Compañía de Jesús in Argentina. Even though history has shown that these ranches were acquired for economic reasons, for the maintenance of schools and other teaching institutions, logically “they also served a certain missionary purpose and became centers of religious teachings”. The ranches of Alta Gracia, Santa Catalina, Jesús María and Caroya, all National Historical Sites, can be visited as part of a 250 km circuit of picturesque mountain paths. These 17th century farms, together with the Manzana Jesuítica of the city of Cordoba, were declared Cultural Heritage of Humanity in the year 2000.

The Cueva de las Manos, located in the gully of the Alto Río Pinturas Valley, south of the town of Perito Moreno, province of Santa Cruz, is one of the most significant cave art expressions in Argentina and in the world. The images of hands were not painted on rocks, but stenciled on the stone: hunters of those days would lay the palm of their hands on the roof or the wall of a cave and cover it with painting. The Cueva de las Manos of Alto Río Pinturas was declared Cultural Heritage of Humanity by UNESCO in the year 1999. The caves and rocky eaves of the gully are filled with the remains of the Patagon culture, which are 9,300 years old. Positive and negative images of hands are still clearly visible there, as well as hunting scenes, geometric symbols, small snakes, fertility-related paintings, footprints of rheas, mountain lions, ritual dances, and shape and shadow combinations.

Estancias Jesúiticas, Alta Gracia, Province of Cordoba

Cueva de las Manos, Province of Santa Cruz

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Other attractions Argentina offers a host of other destinations apart from those previously described. There are many places worth visiting, in some cases quite popular for domestic tourism. Some of them are hill destinations (Tandil - Sierra de la Ventana in the province of Buenos Aires, Punilla - Traslasierra - Calamuchita valleys in the province of Cordoba, Merlo in the province of San Luis), hot spring destinations (Río Hondo in the province of Santiago del Estero, Villa Elisa and Federación in Entre Ríos, Copahue and Caviahue in Neuquén), as well as many others, such as ski destinations (Las Leñas in Mendoza, Chapelco, Catedral, Cerro Bayo and La Hoya in the Patagonian mountain range). The extensive and diversified offer of spectacular sites makes Argentina an ideal tourist destination for the whole range of travelers.

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Guide to Investment Opportunities in the Tourism Sector Appendix 5 Regional maps for the federal strategic plan for the sustainable development of tourism. (PFETS) Norte region

Buenos Aires region

References Actual gates

Potential corridors

Actual crossings

Potential inter - boundary trail circuits

Potential gates

Area with actual turistic use

Potential cossings

Actual Sea Circuits

Actual corridors

Area with turistic vocation

Actual inter - boundary trail circuits

Circuitos marinos potenciales

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Patagonia region

Centro region

References Actual gates

Potential corridors

Actual crossings

Potential inter - boundary trail circuits

Potential gates

Area with actual turistic use

Potential cossings

Actual Sea Circuits

Actual corridors

Area with turistic vocation

Actual inter - boundary trail circuits

Circuitos marinos potenciales

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Litoral region

Cuyo region

References Actual gates

Potential corridors

Actual crossings

Potential inter - boundary trail circuits

Potential gates

Area with actual turistic use

Potential cossings

Actual Sea Circuits

Actual corridors

Area with turistic vocation

Actual inter - boundary trail circuits

Circuitos marinos potenciales

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Guide to Investment Opportunities in the Tourism Sector Appendix 6 Tourist product matrix

TOURIST TRAINS

INCENTIVE TOURISM

YOUNG TOURISM

HEALTH TOURISM

WORLD HERITAGE SPOTS

SHOPPING-GASTRONOMY

THEME PARKS

CRUISES

CONGRESSES-FAIRS-EXHIBITIONS

HUNTING

PRODUCTION CIRCUITS

SPECIAL INTEREST

ETHNIC TOURISM

CULTURAL TOURISM

ARCHEOLOGICAL TOURISM

RELIGIOUS TOURISM

TANGO

CULTURE

GLOF

SKI-SNOW-MOUNTAIN

POLO

SPORT FISHING

NATIONAL PARKS

SPORTS

RURAL TOURISM

BIRD WATCHING

ECOTOURISM

Provinces

ACTIVE TOURISM

Regions

SUN AND BEACH

NATURE

Northwest Jujuy Salta Tucumán Santiago del Estero Catamarca Northeast Misiones Corrientes Entre Ríos Formosa Chaco Cuyo La Rioja San Juan San Luis Mendoza Center City of Buenos Aires Buenos Aires Santa Fé Córdoba Patagonia La Pampa Neuquén Rio Negro Chubut Santa Cruz Tierra del Fuego

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