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Chile Tourism Report Q4 2009Published by: Business Monitor International Published: Sep. 16, 2009 - 48 Pages Table of Contents
AbstractChile’s tourism industry is very much a work in progress. It has very considerable potential to grow off asmaller base than the more mature sectors in Brazil, Mexico and Argentina. Chile is, along with Mexico,the country with the best tourism outlook for this year, according to the Association of Asian PacificTravel (PATA).In a pattern that is becoming familiar worldwide, while the number of Chileans travelling overseasdecreased, domestic tourism improved in January. The number of Chilean tourists travelling inside thecountry reached 3,559,000, representing an increase of 8% over the same period last year. The 2007-2008 Southern Hemisphere summer has been exceptionally good for tourism in Chile. Therewas both a lift in Argentinean tourists, in particular, plus the decision by many Chileans to holiday in thecountry. The three main Chilean tourist destinations - Viña del Mar, La Serena and Pucón - reported a15% increase in the number of their visitors this season. High inflation in neighbouring Argentina drovemany Argentines to holiday in Chile. Quite a few came by car to save money. In 2008, 71% of tourists to Chile came from other countries in Latin America. This year we expect thiswill increase to 74%, before settling back to 69% by 2013. While tourists from within the region arehelping to bolster numbers in these difficult times the longer term growth potential for the industry needsto be seen as drawing tourists from North America, Europe and the Asia-Pacific region. In its ‘plan de acción de turismo’ the government - in conjunction with SERNATUR - announced aseries of plans to improve the sector and to promote its development on a nationwide level. To this end,the campaign intends to increase the number of tourists in Chile from 2.5mn in 2007 to 3mn in 2010.Under the new plans the government intends to promote the country’s profile overseas and in particular inEurope, to increase special interest tourism, develop a system of certification and quality and as well toimplement a new law of tourism. In recent years, investment has been targeted towards adding new destinations to the portfolio ofattractions that the country offers to long haul tourists. Spas and resorts have started to appear nationwideand traditional thermal water centres lead the modernisation movement. Eco-tourism and special interestdestinations have improved the overall offer. Investment in accommodation, transport and staff trainingare helping to transform the category, including the addition of luxury facilities. Political Outlook Chile's conservative presidential candidate Sebastián Piñera is receiving high-profile endorsement for hispromises of change in his election campaign. With the ruling Concertación coalition continuing tocrumble, we see little scope for a last-minute comeback in the polls. Though Piñera is almost tied with theruling coalition's candidate Eduardo Frei in case of a run-off, the emergence of a younger and moredynamic candidate from Frei's camp may yet put any hopes for a miracle to waste come December. The Chilean political landscape is clearly shifting into a higher gear in the run-up to December's generalelection. With President Michelle Bachelet constitutionally barred from another consecutive presidentialterm, the desire for change is ringing loudly among the electorate. Long-standing divisions in the rulingConcertación de Partidos Por la Democracia (CPD) are reaching boiling point as Bachelet'sadministration comes to an end. Economic Outlook Chile continues to enjoy some of Latin America's most impressive fundamentals, such as a highlyattractive investment climate, stable government institutions and a high degree of transparency. Althoughthe importance of the country's mining sector and the integration of the country's financial services sectorwith global markets will keep the economy exposed to external business cycles, Chile will remain abellwether for the region in terms of consumer affluence and a favourable business environment. Weexpect real GDP growth to average a solid 3.4% beyond 2010 through to the end of our 10-year forecasthorizon. Currency Outlook Despite risks of resurgent financial market volatility and government interventions in the foreignexchange market, we remain generally upbeat on the Chilean peso. Indeed, we are targetingCLP535.00/US$ by the end of 2009. Sound macroeconomic fundamentals provide a strong case for earlyrecovery, a factor which should keep investor confidence in the peso anchored. Notwithstandingdownside risks to our current economic growth forecast of 0.1% in 2009, ample room available to bothfiscal and monetary policymakers should make the country a Latin outperformer this year. Moreover, wecontinue to regard the peso as a regional safe haven at times of heightened economic uncertainty, whichshould support the unit in the event of a rapid EM sell-off. Business Environment Anchored by a strong and efficient legal framework, the Chilean business environment is the mostaccommodative in the region, and the government continues to place attracting foreign investment highon its priority list. A physical infrastructure network which rivals that of many in the developed world is amajor asset to the Chilean business climate and, together with a very open foreign trade regime, helps tomaintain the country's reputation as an attractive foreign direct investment (FDI) destination. Althoughlow by regional standards, corruption and criminal activity remain a nuisance, and President MichelleBachelet's government still faces significant challenges on these fronts. Get Full Details About This Report >> |
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