Argentina hotels struggling to generate occupancy momentum
Most of South America continues to stagnate since the region exceeded 20% hotel occupancy in December 2020 thanks to the summer holidays and Christmas. However, one of the region’s key countries stands out for its inability to generate recovery momentum. Argentina closed May with the lowest occupancy (14.4%) in the region, which was well below the levels recorded in Chile (42.7%), Peru (38.4%), Brazil (30.9%), Uruguay (30.0%), and Colombia (25.0%).
Contracts with mining companies and other extractive activity have lifted Peru’s occupancy, especially in Lima, while Chile has shown positive signs in recent months with expanded vaccination distribution.
Argentina Provincial vs. Buenos Aires
While Argentina lags overall, the country has exhibited a similar trend as the rest of the region with regional destinations showing higher performance driven by domestic demand. At the same time, corporate cities like Buenos Aires continue to suffer from border closures and restrictions as well as lack of a MICE segment or international demand.
Argentina Provincial, as defined by STR, registered its highest occupancy level (33.6%) during the week ending 14 February 2021. For comparison, that same week, Buenos Aires registered an occupancy level of just 12.2%. The second week of February was the one with the highest hotel occupancy in Argentina, and as has been seen in other regions of the world, demand was concentrated in the provinces and beach areas, where occupancy was double that of the capital.
Most recently, Argentina Provincial’s occupancy came in at 16.8% in May 2021. That was up from May 2020 (9.2%) but substantially below May 2019 (47.5%). Buenos Aires’ was even further behind the pace— 11.6% in May 2021, 13.1% in May 2020 and 64.9% in May 2019.