Investing in tourism: a very attractive market, but not so simple

Investing in tourism: a very attractive market, but not so simple

Without a doubt, and beyond current issues, the tourism sector in Argentina -a territory that continues to offer countless opportunities- is positioned as a solid contributor of development and progress.

This means that, many times, in view of outside investors in tourism, seems like the goose that lays the golden eggs. And in some cases it may be, although first you have to know how to adjust the scope and then decide where to put your eye.

Just look at the passenger volume of a destinationas the only indicator, is an error that is easy to fall into, and is usually a reason for exaltation on the part of some officials, especially because showing inflated figures presupposes a great business per se. But when it comes to a specific investment, you have to look in more detail and understand how to create the product that each place needs.


Within the profile of new investors In the sector, there are those who, at least initially, do it more for a aspirational motivesince the tourismas the gastronomy or one store would seem to grant certain prestige. This profile of investors in which the concept of “invest on impulse and only then see who it is offered to or turns into a business” They are a constant.

The emotions and the creative/innovative play a fundamental role in these profiles, contributing disruptive projects and ideas which are usually spearheads, although they require sufficient financial backing to hold them, position them and do not lose your essence in the path. Although they tend to be the fewest, they often represent huge investments and they are the ones more advice needed. Despite this, paradoxically, they are the ones who take the longest to seek the collaboration of the sector itself.



On the other hand are the rest of the mortals who, as their first objective, simply seek invest and make a good business in a promising industry. For this segment, it is very important to take into account the following points when deciding what, how and where to develop a project:


When choosing the location it is very important understand destiny and analyze it. Its infrastructure, its beauty, air and land connectivity, the trajectory, and whether there are policies and clear definition of the destination itself. Does the tourism industry in that area know where it is aiming and who it wants to attract? Are there long-term development plans?

Tourism celebrates high dollar, but warns about “Argentine cost”

It is essential to know What degree of priority does tourism have for the development of that regional economy?. Find out how the public-private interaction It is vital, since the entrepreneurship will be immersed in that society, and many times that conditions the strategies to follow. Destiny marks the course of the project – for one side or the other – providing solutions or challenges, but analyzing it is vital from the assembly of the business plan.

A province that serves as an example in this sense is Jumpwho just launched a project called “Tourism investment guide”in which – over 140 pages – explains and advises those who want to invest in that province, offering all the necessary data for decision-making.


Mondo Insurance


Although it is obvious, we must not lose sight Who will the project be aimed at? and if that potential client demand exists or must be created. The strategies will depend on it. However, destiny is once again decisive, since the atmosphere and the infrastructure They are going to condition the segment in some way, but above all the price expectation. It is not the same to plan a 5 star hotel in Uco Valley than another in San Rafaeleven though both are in the province of Mendoza.

He segment ABC1 He visits both destinations, although – for a matter of positioning – in one he is willing to pay 5 pesos and in the other, 2. If we take the example as valid, and think about San Rafaelsurely it will be more viable a 3 or 4 star developmentwhich is one of 5. And not taking it into account would be lethal for business.



Human Resources and Technology

These two points inevitably affect the product that is intended to be offered. Nothing worse than a disconnect between the investment and the service it is intended to provide., due to lack of qualified Human Resources or technology. Aligning these issues is vital from the analysis of the project, especially in remote destinations, where – due to the lack of experienced personnel – a external employee onboarding system, with the costs that this entails. In these cases, the product must be of such quality that merits a price that covers the additional expenses of those resources external to the destination.

For cases that are outside of these possibilities, it is very important, with creativity and training, shorten distances between product and human capital. Therefore, when deciding where and what to do, again the destiny analysis It will be transcendental.

And, although we develop these items here, the truth is that, as in any business that unites hospitality and real estatefinally what defines the success of a project are three words: location, location, location.

Source: Ambito

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