SECTORAL ROUNDTABLE

SEPT 13TH, 2016

Tourism

AGENDA

15 min. Introduction: Global and Regional Context

Presented by Jean-Claude Ramirez, Managing Partner,

Bain & Company

30 min. The Government’s Agenda

Presented by Gustavo Santos, Minister of Tourism

25 min. The Private Sector Perspective

Panelists include:

Isela Costantini, Aerolineas Argentinas

Francisco Gutiérrez de Arrechea, NH Hotels

Daniel Reigl, Howard Johnson Argentina

20 min. Q&A

Introduction

Presented by Jean-Claude Ramirez,

Managing Partner, Bain & Company

GLOBALLY, TOURISM IS GROWING AT 4.6%

4.6%

Worldwide

Note: In volume of trips; nominal value’s CAGR is 3.8%

Source: Euromonitor

Outbound trips(Millions)

GLOBAL TRENDS DRIVING TOURISM

• Asia Pacific growing

at 7.5% (outbound

tourists; 2011-2015

period)

- China 16.4% (2015:

76M trips)

• Latin America growing

at 6.4%

• Within developed,

middle classes also

gaining share

• Global growth of

4.4% in 2015 and

positive outlook for

2016 despite

terrorism – Tourism is

“resilient”

• Shift to safer

destinations - i.e. Med

region: Spain, Italy,

Croatia vs. North

Africa

• Average spending per

trip falling ~2%*, but

there is

+premiunization

• Growth of low cost-

airlines (also in

emerging countries)

• New business models

– i.e. Airbnb

• Growth of online

distribution, and social

media

• In Leisure off-season

city travel (Europe),

cruises …

• … And ecotourism &

adventure/active

travel, examples in

Latam:

- Machu Pichu

- Amazonas

- Patagonia

- Antarctica, …

(*) Real terms, 2011-2015 CAGR

Source: UNWTO, Euromonitor, IPK

Worldwide

TOURISM IS RELEVANT FOR ARGENTINA

ARGENTINA IN SOUTH AMERICA

• Revenues of 3.8% GDP*

(US$15B)

• Represents 5.4% of

employment*

• 53.4M of trips

- 47.7M Domestic

(~65% of spending)

- 5.7M Inbound

(~35% of spending)

In 2011 used to

be #1 with 25%

Figures as of 2015; except (*) from 2014; Argentina Domestic using EVyTH survey (extrapolated to total population). Source:

Ministry of Tourism, Euromonitor, EIU

Share in %(2015)

ARG. HAS LAGGED VERSUS THE REGION

DOMESTIC INBOUND OUTBOUND

3% 5% 6%

Note: Argentina Domestic using EVyTH survey (extrapolated to total population); Source: Ministry of Tourism, Euromonitor

Argentina & S. America

Domestic trips(Millions)

Inbound trips(Millions)

Outbound trips(Millions)

LOWER GROWTH IMPACTED INVESTMENT

Argentina & S. America

CAGR 2011 vs. 2015

CHANGE IN HOTELS CAPACITYDEVELOPMENT OF DOMESTIC

AIR TRANSPORTATIONAs a proxy

for hotel

investments

Source: Euromonitor; Indec (ARG); ANAC (BRA); Junta Aeronáutica Civil (CHL); UAEAC (COL); Ministerio de Transporte y

Comunicaciones (PER)

CAGR 2000 vs. 2015

1.5% 7.0% 6.8% 6.3% 8.4%

Increase in hotel beds(2011-2015 variation, ‘000s)

Passengers / 100 inhabitants

ARGENTINA HAS STRONG FUNDAMENTALS

Argentina

Humahuaca

Dakar

Source: Ministry of Tourism, EIU, United Nations, OVUM

Iguazú

WineriesSki resorts Tango Barbecue

Perito Moreno

Ecotourism FishingHeritage Jesuit

Ushuaia

STRONG & DIVERSIFIED PRODUCTEXAMPLES

Argentina

ARGENTINA’S FUTURE PERSPECTIVES

Recover #1 Inbound position in South America

Return Domestic to growth in

line with South America

Better

connectivity/

Eliminate

bottlenecks

Improve

Competiti-

veness

Develop

transportation

and Tourism

resources

Promote

Argentina

The Government’sAgenda

Presented by Gustavo Santos,

Minister of Tourism

INTERNATIONAL DOMESTICAnnual tourist arrivals Annual tourist arrivals Annual tourist expenseAnnual tourist expense

These targets imply increasing jobs by +300,000 (or +28%)

TOURISM GOALS FOR 2019

50%

90%

47%58%

WE HAVE CLEAR GOALS BY REGION

Inbound trips

2015-2019 growth by market

North America Neighbor countries Rest of the world

EuropeBrazilRest of America

INITIATIVE STATUS

USA Reciprocity Fee elimination +18% of arrivals in 1st

semester Done

Cross-border integration In progress

Proposal to China to improve bilateral trade balance through Tourism In progress

Electronic travel authorization for Chinese tourists who have USA or

Shengen visaDone

VISA Reciprocity with Brazil and Chile In progress

Accommodation tax return (21%) for foreign tourists To be started

1

6

2

3

4

5

WE ARE WORKING TO MEET THESE TARGETS

WE ARE DEVELOPING NEW DESTINATIONS

National plan of touristic investments

Eco-sustainable municipalities

Strategic investments to be financed

International financing

• Iguazú

• San Ignacio

• Moconá

• Iberá

• Impenetrable

• La Estrella

1

2

National plan of touristic investments

Eco-sustainable municipalities

Strategic investments to be financed

International financing

• NATIONAL

PARKS

• ROUTE OF THE

JESUITS

• INCA

PATHWAY

• RIVER CRUISES

NEA ECO-TOURISM CORRIDOR

OTHER DESTINATIONS

PUNA CORRIDOR

• North of Argentina

• Chile

• Bolivia

International Flights(New routes and frequencies)

ARGENTINA IS INCREASING CONNECTIVITY

2XDomestic

flights

PLAN: INCREASE AND RECOVER STRATEGIC MARKETS

• Countries from the

region

• USA

• Europe

• Middle East

• Africa

• Asia (China)

• Oceania

INVESTMENTS IN ARGENTINA

Argentina

US$ +1,000Minvestments already being executed

US$ +2,000Minvestment opportunities in new destinations

The Private Sector’s Perspective

Moderated by Jean-Claude Ramirez,

Managing Partner, Bain & Company

THE PRIVATE SECTOR’S PERSPECTIVE

ISELA

COSTANTINI

AEROLINEAS

ARGENTINAS

CEO, Argentina

DANIEL

REIGL

HOWARD JOHNSON

ARGENTINA

Director of Operations,

Argentina

FRANCISCO

GUTIÉRREZ DE ARRECHEA

NH HOTELS

Director of Projects,

America

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