Sophistication south of the equator in Argentina, Chile

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CHILE-TorresdelPaineSouth America's so-called Southern Cone may be the farthest part of this hemisphere from the U.S., yet two nations that call it home, Argentina and Chile, have reported impressive tourism growth in North American arrivals, unmatched by many destinations that are a much shorter trip.

According to the Argentina Tourism Office, the number of U.S. and Canadian visitors to Argentina grew by more than 35% between 2005 and 2007, with some 430,000 U.S. travelers visiting last year.

And Turismo Chile, the government tourism office, reported recently that Chile's earnings from tourism hit a record high of $1 billion during the first quarter of 2008, an increase of 22% over the same period in 2007. The two largest sources of the growth, according to Chile's national tourism director, Oscar Santelices, were the U.S. and Europe.

What's persuading travelers to don their sleep masks for the overnight flights to the far end of South America?

"I believe there is a lot of 'Europe substitution' going on, with people heading to Latin America because they get so much more for their U.S. or Canadian dollar than in Europe," said Timothy Scott, editor of Luxurylatinamerica.com, a consumer website for upscale travelers. "Since these two countries are seen as the most European and most developed in Latin America, they are getting a lot of visitors looking for sophistication, nice restaurants, upscale hotels and attractive cities. Plus, they're two countries with great wine."

Sandra Borello, owner of Borello Travel & Tours, a tour operator based in New York and Buenos Aires, said that consumers are more educated about the region than they used to be.

"People are hearing more about South America; they are a little more familiar with the destinations because of the media," she said, noting that her clients often visit Argentina and Chile during one trip.

Hot Chile

According to Turismo Chile, visitors from the U.S. and Canada grew by 15.8% for the first half of 2008, compared with the same period one year ago.

To deal with the increased demand, LAN -- the largest airline based in Chile and one of the largest in Latin America -- has upped its service between North America and its Santiago hub. The carrier now fields four nonstop flights per week from New York Kennedy to Santiago plus daily service from Kennedy via Lima, Peru; 10 weekly flights from Miami; and three weekly, nonstop flights from Los Angeles plus four via Lima. This month, the airline is set to launch service to Toronto.

Several hotel companies have built new properties in recent years, especially in Santiago, the nation's most important city for government and business, which also serves as the gateway for most leisure travel. About two-thirds of the city's 8,500 hotel rooms in the three- to five-star category were built within the past 10 years, and more are in the works.

Starwood, which already operates the Sheraton Santiago Hotel and Convention Center, the Four Points by Sheraton Santiago and the San Cristobal Tower, is planning to unveil the W Santiago in March.

"Exploring South America for the perfect spot, we realized that Santiago is one of the few capital cities in the world with access both to ski slopes and beaches," said Ross Klein, president of Starwood Luxury Brands Group. "This concept, having the best of all worlds in one place, is one we identify with in every W city."

The W Santiago will have more than 37,000 square feet of meetings space.

Two as-yet-unnamed hotels are also planned for Costanera Center, a massive residential, business and retail complex currently under construction. The tallest of its four towers, the Torre Gran Costanera, will measure 984 feet, making it the tallest building in South America when it opens, tentatively in 2010.

Also on the growth track is InterContinental Hotels Group, which operates the InterContinental Santiago (which is slated for expansion), the Crowne Plaza Santiago and the Holiday Inn Express Santiago. Last year, the company opened the Holiday Inn Santiago Airport, a 112-room property owned by Chile-based Talbot S.A., just a few steps from the main terminal building.

Mountains and sea

The capital city of Santiago is conveniently close to a variety of destinations that represent geographic extremes.

Head east and travelers can ski in the Andes. Head west and they'll reach famed Pacific coast destinations like Vina del Mar and Valparaiso. Among the newest properties in Valparaiso, about an hour's drive west of Santiago, is Hotel Latitud 33 Sur, a 10-room, boutique-style property. Valparaiso's former prison, meanwhile, is being recast as a major cultural center, redesigned by famous Brazilian architect Oscar Niemeyer and slated for a 2009 opening.

New options are also available for visitors to Pucon, a village in Chile's Lake District. Termas de Menetue, a natural hot springs spa that was destroyed by fire in 2002, has reopened following a $1 million renovation.

And the Chilean hotel company Enjoy has purchased the Gran Hotel Pucon, which was built in 1934, and plans to renovate it and reopen it as a luxury property in 2010. This year, the company opened the Hotel de la Bahia, which is billed as the first five-star property in the coastal resort town called La Serena.

Ski enthusiasts head to Chile from June through August, which are winter months south of the equator. Termas de Chillan, one of the top ski resorts, has unveiled a new park, a new restaurant, new ski lift facilities and a spa at its hotel. And Ski Portillo this year opened a hotel, the 32-room Tierra Atacama Hotel and Spa, which offers a variety of ski packages, some of which include stays in Santiago. 

Argentina affair

Tourism officials in Argentina are touting what they call a "love affair" between U.S. travelers and their nation.

"We offer the best possible experience in cruises, golf, fishing, culture and adventure," said Eduardo Piva, director of the Argentina Tourism Office for the U.S., Mexico and Canada.

In Argentina, one of the most noticeable tourism booms, especially in Buenos Aires, has been in the boutique hotel industry. Some 300 four- and five-star properties that are categorized as "boutique" are either in the works or already open, according to government estimates.

Among the newest is the 20-room Mine Hotel, which opened this year in the chic neighborhood called Palermo Soho. In August, the nearby Palermo Hollywood district welcomed the 16-room Vitrum Hotel, which has a restaurant, spa and suites with kitchenette.

Buenos Aires might be the most-recognized destination in Argentina, but tourism officials are also pushing the wine route as an add-on for travelers from North America.

"The Argentine wine route offers a unique experience amid a backdrop of varied geography and spectacular scenery," said Carina Valicati, the wine tourism coordinator for the Secretariat of Tourism.

And travelers are taking note, according to Domenico Matinata, regional director for American Airlines in South America. "In 2007, [we saw] an increase in the number of passengers who are going to Argentina, not only from November to March, the biggest months [for travel], but throughout the entire year, attracted by the possibility of trying some of the world's best wines."

The capital city of Argentina's wine-producing region, Mendoza, is growing its tourism infrastructure to accommodate more visitors. On Sept. 1, the 180-room Sheraton Mendoza hotel was to open, with a restaurant, bar, business center and 10,500 square feet of meetings space. And the 171-room Park Hyatt Mendoza Hotel, Casino & Spa completed a $3 million expansion that includes a 600-person ballroom.

Up in the air

Both Chile and Argentina may have cheery tourism statistics for now, but Borello predicted that growth levels won't be the same by the time 2008 comes to a close.

"I'm seeing the same amount of travel as last year," she said, noting the weak dollar, strengthening Argentine peso and rising prices are slowing what had been a fast-growing market.

"People are definitely thinking twice before going," she said. "And what I'm seeing is that people are staying less time than before."

"On paper, the dollar is as strong against the Argentine currency as it was before," said Scott. "But there's a feeling that [Argentina] is in crisis again, with high inflation, bad economic policy decisions and tension between farmers and the government. Hotel rates especially have risen quite dramatically at all budget levels."

Chile, however, has managed to keep its hotel rates down, according to Borello. "It's still very good, price-wise," she said. "Chile has maintained the prices they did have, and there are new hotels."

The biggest challenge to keeping tourism growing in Chile and Argentina is the price of air travel, according to Borello. "The airfares are the problem," she said. "Just the taxes and surcharges are more than $400 [per ticket]. So even if the tickets aren't expensive, with the taxes and fuel surcharge, you have a price of more than $1,000."

Scott remained optimistic. "I believe that tourism to both countries will keep rising for a while, though it's possible that rising airfares will affect these long-haul destinations more than closer spots in Mexico and Central America," he said. "As long as they remain attractively priced compared to other destinations around the world, however, both countries have enough attractions and distinguishing characteristics to keep the momentum going."

For more information about travel to Chile, visit www.turismochile.travel. Turismo Chile's 2008 Destination Specialist Chile certification program for travel agents is available at www.dschile.com. For information about Argentina, visit www.turismo.gov.ar.

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