MercoPress. South Atlantic News Agency

Strong Chilean peso hinders Patagonia tourism

The strong Chilean currency is causing complications to the Magallanes Region tourist industry which has been forced to increase prices in US dollars or simply mark them in Chilean pesos, “which most visitors don't understand”.

"During the last two seasons the drop of the US dollar against the Chilean peso really surprised us and we estimate losses to have reached close to eight million US dollars", revealed Miguel Angel Soto from the Austro Chile Tourism Chamber.

"Some hotels, hostels and other services were forced to renegotiate packages to minimize losses, but this year we're working on a US dollar equivalent to 500 Chilean pesos".

Mr. Soto said that Torres del Paine hostels have increased prices 15% in US dollars and in Puerto Natales, "services have been pesified (converted to pesos)".

Jorge Norambuena from Arka Patagonia said that "the drop of the US dollar is having an impact in the sector as a services exporter".

"Our tariffs and bookings are done with a year's anticipation and we estimated one US dollar equivalent to 550/560 Chilean pesos, and now it's 525 and falling. This is not good for profits", underlined Mr. Norambuena who recalled that this also has an impact in employment.

"Hiring staff in pesos is dearer in US dollars and margins shrink because our main income currency is dollars, so the whole industry instead of advancing recedes".

Catalina Jaksic from Cabañas del Paine and Aventour Operators was also concerned with the financial consequences of the situation.

"Last year we promoted this season working on a US dollar at 630/650 Chilean pesos, which is now 530, that is 120 pesos less for each dollar; it's too much a difference. Besides the fact that 80% of our customers are foreigners and they like to keep to the original conditions. They don't have to know why the Chilean peso is stronger".

Ms. Jaksic pointed out that under these conditions "businesses can't expand and this harms particularly those long established because the new companies are less vulnerable to these, for us, unexpected changes".

Another point brought up by Mr. Norambuena was that most hotels and restaurants, which normally favour regional or national products, are now being forced to buy non-Chilean goods since imported goods costs have remained stable.