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End of the Dollar Clamp - Tourist Experience discussion

End of the Dollar Clamp - Tourist Experience discussion

Old Dec 17, 2015, 11:25 am
  #16  
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Originally Posted by phoochka
So with no premium for exchanging cash USD/EUR etc, hotels have instantly become much more expensive? If the restaurants raise their prices (following the domestic increases in the prices of beef and other commodities), then eating out for tourists will be hit with a double whammy - one on account of the higher prices per se and the other due to the worse exchange rate.

Do I see that right?
Prices are still set by supply and demand.
Maybe you should consider vacationing in Brazil instead
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Old Dec 17, 2015, 11:46 am
  #17  
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Originally Posted by phoochka
one on account of the higher prices per se and the other due to the worse exchange rate.

Do I see that right?
How is the exchange rate worse for tourists? It is pretty much what it was, and 40 to 50% better than if you were exchanging at the official rate.
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Old Dec 17, 2015, 11:50 am
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Originally Posted by Eastbay1K
How is the exchange rate worse for tourists? It is pretty much what it was, and 40 to 50% better than if you were exchanging at the official rate.
Agreed. As a tourist this is great news. Now no need to bring lots of USD and no stress ofbfindong legit places to convert. If prices rise in the long run that's a different story, but I'm now less stressed about my trip to BA next week.
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Old Dec 17, 2015, 11:50 am
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Originally Posted by Dieuwer
Prices are still set by supply and demand.
Maybe you should consider vacationing in Brazil instead
This is not entirely true - hotels are priced in USD. They had to accept payment in pesos at the official rate, so the smart tourist could exchange at the blue rate and pay at the official rate saving themselves 40% or more. With no more blue, those rates are effectively more expensive.

By that measure it's worse for tourists.

A stay at the Park Hyatt in January is U$S 540. Yesterday I could have paid U$S 378 with the blue. Today it's $540.
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Old Dec 17, 2015, 11:53 am
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Originally Posted by mccomb
This is not entirely true - hotels are priced in USD. They had to accept payment in pesos at the official rate, so the smart tourist could exchange at the blue rate and pay at the official rate saving themselves 40% or more. With no more blue, those rates are effectively more expensive.

By that measure it's worse for tourists.
Well, when I was in BA earlier this year I booked my hotel on Expedia with a $250 off coupon. Better deal than the blue rate

Originally Posted by mccomb
A stay at the Park Hyatt in January is U$S 540. Yesterday I could have paid U$S 378 with the blue.
True. But when the new higher hotel rates start to deter tourists from coming to BA, the hotel industry will be left with empty rooms. Which means lost income. Which may result in hotels actually lowering room rates to attract tourists back.
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Old Dec 17, 2015, 12:46 pm
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Buy: 1 USD = 13.75 ARS
Sell: 1 USD = 13.95 USD

Prices should go up quite soon, probably as of next month. There will also be rises in public utility bills (which in Buenos Aires are still extremely subsidised - my natural gas bill is 3 USD per month) and that will necessarily impact on prices as well.

That said, probably by March or so prices should stabilise.

I was on the phone with Amex Argentina yesterday on another subject and they told me the new conversion rate will reflect on anything bought from today onwards.
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Old Dec 17, 2015, 12:49 pm
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Originally Posted by Marambio
Today
Buy: 1 USD = 13.75 ARS
Sell: 1 USD = 13.95 USD

Prices should go up quite soon, probably as of next month.
Why should they? If people cannot afford higher prices, suppliers will hold the line or go bust.
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Old Dec 17, 2015, 1:00 pm
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Originally Posted by Dieuwer
Why should they? If people cannot afford higher prices, suppliers will hold the line or go bust.
Most industry supplies here are imported. Even if the product is Industria Argentina the machines that manufacture it are most of the time from abroad and any spare part is imported. A more expensive dollar impacts on prices in the first link of the supply chain.

The government is meeting with industries next month in order to create a plan to stop prices from going up (probably through tax breaks).
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Old Dec 17, 2015, 1:07 pm
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Originally Posted by Marambio
Most industry supplies here are imported. Even if the product is Industria Argentina the machines that manufacture it are most of the time from abroad and any spare part is imported. A more expensive dollar impacts on prices in the first link of the supply chain.

The government is meeting with industries next month in order to create a plan to stop prices from going up (probably through tax breaks).
The whole point of depreciation is to make domestic goods and service more competitive. No use with the government start meddling again with "subsidies".
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Old Dec 17, 2015, 3:02 pm
  #25  
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XE.com is now showing the new rate.
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Old Dec 17, 2015, 10:42 pm
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Originally Posted by Dieuwer
Prices are still set by supply and demand.
Maybe you should consider vacationing in Brazil instead
You are naive if you think that luxury hotels set their prices by supply and demand alone. Besides, currency factors do not affect business travel at all - and such business clientele is the bread and butter of better hotels. Ergo, they will see no reason to reduce their USD denominated rates.

And yes, the thought of indulging at a Brazilian churrascaria the next time I need a meat fix, did cross my mind

Originally Posted by Eastbay1K
How is the exchange rate worse for tourists? It is pretty much what it was, and 40 to 50% better than if you were exchanging at the official rate.
Elementary. Earlier, you changed your USD100 bill at a cambio and got a 40% more ARS than at the bank. Loaded with that local currency you marched into your hotel and effectively got a 40% discount on the bill, which was converted from USD at the official rate. Similarly, ANY other expense, taxi ride or restaurant, had a de facto discount. Now, with no premium, you pay the same posted price. Worse, most restaurants willl probably see this as an excuse to raise their prices.

I better go brush up my non-existent Portuguese!

Originally Posted by mccomb
This is not entirely true - hotels are priced in USD. They had to accept payment in pesos at the official rate, so the smart tourist could exchange at the blue rate and pay at the official rate saving themselves 40% or more. With no more blue, those rates are effectively more expensive.

By that measure it's worse for tourists.

A stay at the Park Hyatt in January is U$S 540. Yesterday I could have paid U$S 378 with the blue. Today it's $540.
Exactamente

Last edited by shonamac; Dec 17, 2015 at 10:52 pm
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Old Dec 17, 2015, 10:57 pm
  #27  
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Originally Posted by justforfun
Agreed. As a tourist this is great news. Now no need to bring lots of USD and no stress ofbfindong legit places to convert. If prices rise in the long run that's a different story, but I'm now less stressed about my trip to BA next week.
You pay 50% more for your hotels now compared to Dolar Blue discount.
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Old Dec 17, 2015, 11:47 pm
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Originally Posted by holtju2
You pay 50% more for your hotels now compared to Dolar Blue discount.
Ah, because hotels are quoted in USD. Gotcha. But everything else is still a savings without the hassle.
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Old Dec 18, 2015, 2:37 am
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Originally Posted by justforfun
Ah, because hotels are quoted in USD. Gotcha. But everything else is still a savings without the hassle.
Not so much. Argentina has had an inflation rate of 30-40% per year. The blue dollar provided a cushion against that. With no more blue dollar, tourists will get the same rate of inflation as locals.

Hopefully the new government is able to reign in inflation, but at this point, no one knows for sure.
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Old Dec 18, 2015, 9:38 am
  #30  
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Having talked to someone this morning who is in the computer and electronics industry it would seem that the goods mostly affected by recent price hikes due to the recent devaluation have been those which are imported.
He reckons it'll be a few weeks before things settle down and prices of those imported items may well come back down.
Which would indicate there shouldn't be any large increase in hotel rates.
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