Chile Tourism Industry Update Quarter 4 2010

• Publication date: September 2011

Tourism in Chile is getting back into its stride after the devastation and disruption caused by the earthquake in the early part of 2010. The significant potential for growth as a tourist destination and economic indicators reinforce our positive outlook in the short term. In light of data showing Chilean real Gross Domestic Product grow ing by 6.5% in Q210, the country continues to hold its position as a regional lynchpin of economic growth. ...

Tourism in Chile is getting back into its stride after the devastation and disruption caused by the earthquake in the early part of 2010. The significant potential for growth as a tourist destination and economic indicators reinforce our positive outlook in the short term. In light of data showing Chilean real Gross Domestic Product grow ing by 6.5% in Q210, the country continues to hold its position as a regional lynchpin of economic growth.
The main areas of tourist growth remain around Viña del Mar, La Serena and Pucón. Recent seasons have helped to establish these three disparate cities as key international destinations. Travel from Argentina continues to be the top source of foreign visitors, particularly driven by high inflation in the neighbouring country.
The tourism industry itself has experienced some change in recent years, with a more focused approach from the authorities that are attempting to highlight special interest destinations and non-traditional resorts in areas such as ecotourism. This has been led by a rebranding of traditional spa and thermal water centres.
As part of this drive, branding has focused on attracting foreign visitors from further afield, especially from Europe. There has been much success in recent years in raising the country’s profile through initiatives such as the system of certification and quality brought about by new tourism legislation. This has helped to differentiate the country from its neighbours, where tourism infrastructure is lacking.
Political Outlook
Chile’s stable political environment has been a boon to the tourism segment over recent years, enabling sustained growth. The election of a centre-right government in January 2010 that took office in March has led to a industry -friendly landscape and improved economic indicators. This is also a result of changing political affiliations that prize experience in the private segment over party loyalty, which traditionally dominated development.
In keeping with BMI’s long-held view, the Piñera administration is expected to reshape Chile’s policy to be more private segment -oriented. The cabinet is notable for the prominence of high profile business figures, many of which have had major positions at some of the country’s leading firms . A renewed dispute with Argentina over border rights at the Southern Patagonian region have lead to some issues, although these are unlikely to significantly affect tourist numbers.

Tourism Industry in Chile

Executive Summary 5
Industry SWOT Analysis 7
Chile Tourism SWOT .... 7
Chile Political Environment and Risk Analysis .... 8
Chile Economic Environment and Risk Analysis . 9
Chile Business Environment SWOT ...... 9

Market Projection Scenario ... 10
Arrivals .... 12
Data : Arrivals Data, from 2006 to 2014 13
Accommodation ....... 13
Data : Accommodation Data, from 2006 to 2014 ... 14
Expenditure ...... 14
Data : Tourism Expenditure & Economic Impact, from 2006 to 2014 ..... 15
Inbound Tourism ...... 15
Data : Tourism Arrivals By Region & Country, from 2005 to 2014 16
Outbound Tourism ... 16
Data : Outbound Tourism Data, from 2006 to 2014 (‘000, unless stated) ....... 17

Industry Analysis – Travel ...... 18
Commercial Airlines 18
World Oil Products Price Outlook .. 19
Data : Oil Product Price Data & Projections , 2010 (US$/bbl) ...... 20
Data : Oil Product Price Data & Projections , from 2007 to 2014 (US$/bbl) ..... 21

Industry Analysis – Hospitality ...... 22
Accommodation ....... 22
Tourism Infrastructure ..... 23
Ecotourism ....... 25
HidroAysén Dam Project . 26

Environment Overview Outlook .... 28
BMI’s Security Ratings .... 29
Data : Latin America’s Defence & Security Ratings... 29
Data : Latin America’s State Terrorism Vulnerability Index ....... 30
Chile’s Security Risk Ratings ... 30
Currency Projection . 32
Data : BMI’s Chile Currency Projections , from 2010 to 2011 .. 32
World Assumptions ..... 34
Data : World And Regional Real Gross Domestic Product Growth And Exchange Rates, from 2009 to 2012 ...... 34
Data : World Assumptions, from 2008 to 2014 ...... 35
Data : Developed States’ Real Gross Domestic Product Growth, from 2009 to 2012 ... 36
Data : Emerging Industry s’ Real Gross Domestic Product Growth, from 2009 to 2012 . 37
Company Profiles .. 39
LAN Airlines ....... 39
Panamericana Hoteles 41
Explora Hotels .... 41
Sky Airline .. 42
Diego de Almagro Hoteles .. 43
BMI Methodology .. 44
How We Generate Our Market Projections ...... 44
Tourism Market . 44
Tourism Ratings – Methodology . 45
Data : Tourism Business Environment Indicators ...... 46
Data : Weighting of Components 47
Sources .... 47