Even more than the weak economy, the plummeting dollar has clamped down on U.S. group travel to Europe. But one region where the dollar still has relatively high bang for the buck is Latin America.
"Demand for international programs have decreased, but it has more to do with the valuation of the dollar than the economy," said David Gabri, president and CEO of Associated Luxury Hotels International." Many corporate programs are reasonably strong year on year. However, traveling to certain destinations has become costly," Gabri said, citing cost pressure in London, Paris, and Rome.
James S. Follett, InterContinental Hotels Group's director of global sales for Latin America, said planners are creating quality programs for 30 percent lower cost versus Europe. While air transportation to Latin America may not be any cheaper than to Europe, savings can be had in room rates, food and beverage, and ground transportation—all amid exotic back-drops. "What they're finding is that they can really do strong programs in Buenos Aires, Costa Rica, and Panama for less money," said Follett.
Said another insider about Central America, "The vast majority of tourism is eco-tourism and adventure tourism for people who are willing to rough it a little bit. Costa Rica is the most developed country, offering more amenities than others. For natural beauty, it can't be beat, being one of the most bio-diverse places on Earth." He added, "Panama, along with Nicaragua, is up and coming and leaning toward higher-end tourism, building a lot of high rises along the shore."
Meanwhile, Buenos Aires, known as the Paris of South America, offers great food, wine, and culture, said observers.
What's also fueling demand for Latin American meetings from the insurance, marketing, and pharmaceutical industries is that the region has stabilized in recent years. As that occurred, so did its currencies.
"The currency situation in Central America and South America is no longer an obstacle," said Gabri. "From California to New York, we've had increased requests for proposals for Latin America."
In fact, Latin American currencies have strengthened against the dollar in the past couple of years. Still, the greenback still netted around 3 Argentine pesos, 550 Costa Rican colones, and 1,757 Colombian pesos in late July.
Changing perceptions about safety are helping lift Colombia, specifically the cities of Bogota and Medellin. Other destinations that are heating up are Chile and Panama. Mexico remains a popular, close-to-home option."Once U.S. planners discover Colombia, it will be a hot destination," said Follett.
"Colombia is a fantastic destination with great value for the money," said Latin American meetings specialist Eli Gorin, owner of Aventura, FL-based gMeetings Inc. "Cartagena, one of the port cities, is great for meetings, and the old walled city is a UNESCO World Heritage Site. There is amazing food and great service everywhere, and it is safe."
Gorin said Colombia, Mexico, Chile, and Uruguay provide additional value by not levying a value-added tax (known as IVA in Lat Am) for hotel rooms on foreign groups. Because of the tax break, this means a 10-percent savings in Colombia, 10-to-15-percent savings in Mexico, and 19 percent in Chile, he said. "I did a meeting in Colombia in January of 160 rooms and ended up saving the group $25,000 by not having to pay the IVA."
Buenos Aires offers bang for the buck in off-site activities and fine dining once planners get past the 21-percent room IVA, Gorin said; restaurant prices are one-third to half those in the U.S. Meanwhile, he said in Santiago, Chile, for $45 a person, attendees can have a multi-course dinner including drinks, oysters, and clams.
Gorin added that at an InterContinental property just outside Panama City he used recently, coffee and tea service cost $3 a day per person.
Other groups are flocking to Mexico, where the exchange rate remains favorable, said both ALHI's Gabri and Carole B. Rosenblat, a Phoenix-based independent on-site meetings manager. While managing a pharmaceutical firm's incentive program for 100 winners at the Fairmont Mayakoba south of Cancun, Rosenblat bumped into two American planner friends who also had groups there.
Anecdotally, Latin America appears to be taking some business from Hawaii, long a favorite exotic location.
Said Rosenblat: "With the airlift the way it is in Hawaii, Mexico gives you the beaches you get in Hawaii—but for less. IHG's Follett said changing demographics have contributed to that movement: "Incentive winners are getting younger and thus more interested in things besides hitting a golf ball. Soft adventures (zip-lining, canopy tours, etc.) are big, as is visiting native peoples. Flying to Panama or Costa Rica is also closer than flying to Maui."
Originally published Aug. 11, 2008