Chilean retailers and airlines are benefiting from a significant increase in Argentine tourists driven by favorable economic conditions in Argentina. Major companies like Falabella and Cencosud reported strong revenue gains, with stock prices reflecting this growth. Analysts predict continued benefits as the Argentine economy improves.
Chilean retailers and airlines are experiencing increased earnings, largely due to a surge in Argentine tourists. Argentine President Javier Milei’s economic policies, which have kept the peso from declining significantly, are driving shoppers to Chile, where they are purchasing a variety of goods. Major companies such as Falabella, Cencosud, and Latam Airlines reported considerable sales growth as a result of this influx.
In the last quarter, over 2 million Argentines visited Chile, marking a 73% rise from the previous year and reaching the highest levels since 2018. In just January, more than 500,000 Argentines crossed the border, a 152% increase compared to the same month in 2023. Marisol Fernández of Cencosud noted that tourism accounts for 30% of revenue in shopping centers near the Argentine border.
Retailer indicators reflect this growth; Falabella’s same-store sales jumped 21%, while Cencosud and Latam Airlines also enjoyed revenue increases of 5.4% and 4.4%, respectively. As a result, stock prices for Falabella and Cencosud soared by 58% and 50%, and Latam Airlines rose 30% over the past year.
The Argentine peso has declined by more than 20% against the dollar in informal markets, greatly outpaced by an 84% increase in consumer prices. To facilitate tourism, the Milei administration has relaxed restrictions on foreign currency credit card spending. CEO Francisco Irarrázaval anticipates that the increase in Argentine tourists will continue, especially as the summer season peaks.
Even after the summer ends, Chilean companies may continue benefiting due to a recovering Argentine economy, which could increase spending power among locals. Roberto Alvo, CEO of Latam Airlines, emphasized the Argentine enthusiasm for travel. Additionally, companies like Cencosud and Falabella are poised for growth in Argentina as the economic situation improves, with prospects of lifted capital controls potentially enhancing their operations.
The influx of Argentine tourists has significantly boosted the earnings of Chilean retailers and airlines. With favorable economic policies from Argentina’s government, the purchasing power of Argentines abroad has improved, prompting a notable increase in cross-border shopping. Companies like Cencosud and Falabella are seeing substantial revenue growth, and as the Argentine economy recovers, further benefits can be expected for businesses with operations in both countries.
Original Source: www.batimes.com.ar
