Buenos Aires, Argentina—In 2010, a unique hotel will open in San Telmo, a lively Buenos Aires neighborhood known for a Sunday flea market where tango dancers perform in the streets.
Known as the Hotel Boca Juniors by Design Suites, after the Buenos Aires football team, the sleek, 17-story high-rise is intended to be a refuge for and a tribute to the popular team, its official entourage, sponsors and fans. Guests will find the football theme in design touches such as inscription of the names of Diego Maradona and other football greats on walls, and accoutrements such as towels and pillows in the royal blue and yellow colors of the team.
The $15-million property, owned by Grupo Solanas, an Argentine investment group that specializes in hotels and related businesses, is only one of 300 hotel projects, what Argentina’s secretary of tourism says are costing about $1.4 billion dollars currently under development.
Argentina, which many residents north of the equator used to regard as an inconveniently distant destination, has experienced a tourist boom in recent years. Favorable exchange rates for the dollar and the euro, the rising international profile of Argentine wines, and attractions ranging from the tango culture to Iguazu Falls and Patagonian glaciers have all contributed to the boom.
According to the tourism department, the majority of the projects are four- and five-star hotels, and $740 million of the financing comes from international sources. Most of the new hotels will rise in five main regions: 36 percent in Patagonia, 20 percent in Buenos Aires, 15 percent on the coast in locations such as the Mar del Plata resort, 14 percent in the north in areas such as Salta, and 13 percent in Cuyo, which includes the Mendoza wine country and Andes mountains.w
But in the current financial environment, exactly how many of these projects will be completed, and when, remains to be seen.
“This is a moment of transition and it’s difficult to quantify which of the projects that have been announced will move ahead,” said Arturo Garcia, senior partner of HVS Global Hospitality Services and president and founder of HVS Argentina.
He said the common denominator of projects that succeed is that they are “financed by large groups that were already in the business, that know it well, that are solid and have vision for the future.” Garcia said that most of these are mixed-use projects, which is a relatively new phenomenon in Argentina.
Several of the mixed-use projects are in the Buenos Aires area. One is Starwood Hotels & Resorts Worldwide’s St. Regis Hotel and Residences Buenos Aires, currently under construction, which is scheduled to open in 2010. The $120-million residential, retail and entertainment complex is located in Puerto Madero, a former industrial area on the banks of the Plate River that has been transformed into a tourist and business district. According to Dolores Arese, spokesperson for First South American Investments, which is financing the project, ground has been broken.
“The project wasn’t affected in any way by the global financial crisis, and it is progressing as planned,” she said.
The Puerto Madero neighborhood also has attracted a project that developers announced would include the first floating boutique hotel, moored on one of five docked ships, along with a floating restaurant and nightclub, a shopping center, a marina and sailing school, a cultural center and a tourist information center. Alejandro Aparicio, president of Star Resorts Development in Miami, said his group has invested more than $2 million in the project .
“In general, development expenses for current projects have risen due to the cost and unavailability of money. That hasn’t stopped the projects but it has certainly affected the projected numbers,” Aparicio said, adding that potential new initiatives are on the back burner until year-end financials become available. When asked about the schedule for building the boutique hotel, he said: “Hotel plans (for the Puerto Madera complex) are being reevaluated. We might not have one.”
Attracted to Argentina by the relatively low cost of land, an investment-friendly atmosphere, “untapped markets and unique, iconic projects which will appeal to high net worth, world-savvy buyers and visitors.” Aparicio said that Star Resorts has also invested in a resort in Mendoza, capital of the wine country, and up to three hotels in the Cerro Bayo ski resort near Bariloche.
InterContinental Hotels Group has plans for a mixed-use development about 16 miles outside of Buenos Aires. The InterContinental Nordelta Buenos Aires Hotel, Residences and Spa will be located in a self-contained community of 13 neighborhoods, offering everything from medical facilities and a sports club to schools and a country club. It’s due to open in 2011.
Hilton Hotels Corporation has three properties in the pipeline in Argentina: The 170-room Hilton Iguazu Resort, scheduled to open at the end of 2009; Hilton Ushuaia, a 150-room property in the capital of the province of Tierra del Fuego, said to be the southernmost city in the world, to open in 2010; and a 210-room hotel in Bariloche, the lake and mountain area near the Chilean border.
“The projects (which together will cost nearly $100 million) were already funded when proposed to Hilton,” said Karla Visconti, Hilton’s director of communications for the Caribbean and Latin America. “Additionally, tourism growth to Argentina has been strong over the past five years and although there may be a slight decrease as a result of the current economic environment, the general outlook is positive.”
The government does not include a category for boutique hotels in its data. But Ana Correa, a spokesperson for the recently formed Best Boutique Hotels group, said that since 2005 there has been “an explosion” in the number of these establishments, with about 115 properties in operation throughout the country, and up to seven more scheduled to open by the end of this year.