The article discusses how the recent increase in Argentine tourists, driven by favorable economic policies in Argentina, has positively impacted the earnings of Chilean retailers and airlines. Major companies have reported significant sales growth, and projections indicate continued benefits as Argentina’s economy recovers from recession.
The surge in Argentine tourists has significantly bolstered the earnings of Chilean retailers and airlines, largely due to the policies of Argentine President Javier Milei. An overvalued peso has catalyzed a cross-border shopping trend, with thousands of Argentines visiting Chile to purchase various goods, including home appliances and clothing.
Leading retailers such as Falabella SA, Cencosud SA, and Latam Airlines Group SA reported increased sales last quarter. Over 2 million Argentines traveled to Chile last year, marking a 73% increase from 2023 and the highest number since 2018, fueled by measures taken by Milei’s administration to stabilize the peso and enhance purchasing power abroad.
Cencosud’s chief sustainability officer, Marisol Fernández, noted that tourism contributes to 30% of total revenue at shopping centers near the Argentine border. During the fourth quarter, Falabella experienced a 21% rise in same-store sales due to tourist spending, while Cencosud recorded a 5.4% increase in revenues, and Latam Airlines gained 4.4%.
The increase in sales has positively influenced stock performance, with Falabella shares rising 58% over the last year, Cencosud up 50%, and Latam Airlines increasing by 30%. Analysts anticipate similar trends for Ripley, a retailer set to disclose earnings soon.
Despite a significant depreciation of the Argentine peso over 20% in the past year, the Milei administration’s easing of restrictions on foreign currency spending has further stimulated tourism. Early indicators for the first quarter reveal continued support from Argentine tourists as summer approaches.
Francisco Irarrázaval, CEO of Falabella’s retail unit, anticipates a sustained influx of Argentine tourists into 2025, attributing it to the summer season. Even after the season ends, local Chilean businesses may continue to see benefits as Argentina’s economy recovers from recession, enhancing local spending power.
“Argentines love to travel,” remarked Latam Airlines’ CEO Roberto Alvo. Additionally, the growth in operations for Cencosud, Falabella, and Embotelladora Andina in Argentina positions them to gain from an economic revival.
Analysts from Citi, including Carolina Zelaya, suggest that an improved consumer sentiment in Argentina coupled with potential capital control lifts can provide significant growth opportunities for Chilean firms engaged in the Argentine market.
The increase in Argentine tourists traveling to Chile has notably uplifted the earnings of various retailers and airlines, with a focus on the policies implemented by President Milei. This situation has encouraged cross-border shopping, resulting in high sales figures for companies like Falabella, Cencosud, and Latam Airlines. Amidst favorable economic forecasts, the long-term prospects for Chilean companies operating in Argentina appear promising as they capitalize on enhanced consumer sentiments and spending power.
Original Source: www.batimes.com.ar
