Argentina took another big step forward last month in attracting more American travelers.
I’ve complained on multiple occasions about how Argentina was shooting itself in the gaucho-booted foot by charging Americans $160 each to enter the country. Then on March 6 the longtime author of Moon Handbooks for the region published this editorial in the Buenos Aires Herald: Reciprocity Fee: Get Rid of It.
Now that there’s a new government in place that seems to put logic ahead of nationalist fervor, on March 24 the ball-and-chain of a hefty visa fee went away. You can see the official notice on the Embassy of Argentina site.
What does this mean? You can spend that $160 per person that once went into a void on the local economy instead. That will buy a lot of wine and steak, for a start. It also takes the country from being a “couples only” destination to one that won’t break a family’s budget by hitting them with $640 in visa fees before they even get to their first hotel.
There have been heated exchanges about this visa fee on both sides, especially in the comments of the 2010 post I put up when this policy started called “Argentina Says Screw You to Foreign Tourists.” I won’t link to that because now I have to go edit it first. That was one in a series of boneheaded moves by the former government. They collectively caused an outflow of foreign businesses, an outflow of investment cash, and a slowdown in the number of tourists when other South American countries (especially Peru, Colombia, and Ecuador) were seeing huge increases.
The defenders of the fee would usually say in a huff that it was “perfectly fair.” And they were right—they were just charging Americans what the U.S. charged Argentines. But fair doesn’t always mean smart. If the number of Argentines visiting the USA on vacation dropped to zero, it wouldn’t make a dent in the tourism numbers. Maybe nobody would even notice that they had stopped coming. There were 685,000 of them visiting in 2014—the most recent data available—which sounds sizable. Really though, that’s a mere 0.001% of the total number of visitors. For every person from Argentina who comes, there are 1,000 visitors from other foreign countries.
If the number of Americans visiting Argentina dropped to zero though, it would literally put some companies out of business. And since they tend to be the highest-spending nationality, overall tourism revenues would take a serious dive. To put it in stark perspective, the Miami region of the United states gets more than 7 million international visitors annually. The whole country of Argentina only gets around 5.5 million annually and that includes people coming overland from Chile, Brazil, and Uruguay.
And the big question always was, what are they doing with that money? The United States can justifiably say the visa fees collected from countries with a history of immigration go to pay for security screening and immigration expenses. In Argentina the money collected went to… nobody really knows.
I’m feeling optimistic about this new government. They eliminated the most pressing issue when they quickly ditched the dual exchange rate. Now they’ve struck down the hefty penalty to enter the country. Time will tell what kind of financial impact this move will have on Argentina, but I’m guessing it’ll be a big net win if they can get the word out that the country is now a much more tourist-friendly place. Since Chile eliminated this same kind of fee last year, this only leaves Brazil as the last holdout in South America and they are dropping it around the Olympics.
Flights to the Southern Cone can be expensive, so Argentina is a good candidate for cashing in some frequent flyer miles to fly to Buenos Aires. After you get there though, you’ll find that good living is easy and you might even be tempted to settle down there…