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@qc it depends on how the items is priced – if you’re looking at an internal flight that is priced at 200,000 ARS and you’re paying with a foreign card, then (for the moment at least) there has been no direct effect on the price due to the devaluation, it’s still going to cost you ~£200 (with the MEP rate of 1000 ARS to GBP)
However, if you’re looking at a U$S300 hotel which converts to ARS at the official exchange rate on the day, this suddenly got a lot more expensive (slightly more than doubled) since, as of today there are 800 ARS to 1 U$S.
As JDB has worded it in earlier posts, that gap between the official rate and the tourist MEP rate is now a lot narrower, so there is less of a benefit in paying with a foreign card (or indeed getting the ‘unofficial’ blue rate)
But shouldn’t that US$300 now be reduced to the conversion at the new rate when it is eventually applied – should I wait until that happens?
To add, what knock-on effect this will have on prices, I don’t know. When you consider that inflation is already 140%, then the longer you leave it, the more prices are likely to have risen in ARS terms, albeit this is usually balanced by depreciation of the currency.
And as per my earlier post, will the devaluation cause that 200,000 ARS flight to increase due to the airline wanting the same U$D amount they were getting previously? We need an economist to help with this 🙂
Typically, we got he ferry to Montevideo from BsAs yesterday, so will have to wait until we get back on Saturday to see how things change.
Prices were really great for us for the first few days, getting about 3USD/£ for the hotel we had at the weekend.
But shouldn’t that US$300 now be reduced to the conversion at the new rate when it is eventually applied – should I wait until that happens?
I wouldn’t envisage the hotel reducing that price as they want whatever amount of pesos is equivalent to U$S300. If you book a hotel today for 3 months time, to be paid at check-in, they don’t know what a peso will be worth then, so they lock in a dollar price today.
When there was a big gap between the official rate (that the hotel use for their conversion) and the MEP rate for tourists, then you could make a large saving. This benefit has now been reduced.
So is the trick to book in ARS now on the hotel’s website?
So is the trick to book in ARS now on the hotel’s website?
All the hotels I have seen (plus some shows and trips etc) price in US dollars and you only get it converted to ARS when you go to pay. In the hotel we were staying in at the weekend, they kept putting us off paying, I assume as it’d be more beneficial to them if the rate changed before I paid.
@qc if it’s a pay on arrival rate, be aware that many prices are shown in ARS for information only, but when you make the booking the confirmation will be in US.
If it’s an advance purchase rate then you know exactly how much you’ll be paying, but the trade-off is losing flexibility should plans change or if there is a beneficial change in the price (whether that’s due to FX or any other reason.)
@Scott – yes, they have gone for shock and awe with such a big devaluation in one go. We will have to see how things settle down. The MEP $ has traded over 1300 but ought to settle lower, although the inversion vs Blue has been going for over a week.
Curve have decided to decline all ARS transactions indefinitely:
We want to inform you of a temporary measure we’ve implemented to protect you due to challenges arising from multiple exchange rates in Argentina.
Effective immediately, we are temporarily declining transactions in Argentine Pesos. We do so to avoid customer harm from unexpected Fx charges.
Unfortunately, we cannot provide a specific timeframe for when transactions in this currency will resume. Rest assured, our team is actively working to resolve these issues and reinstate normal operations.
I need to make various bookings in Argentina – what is the advice now?
I need to make various bookings in Argentina – what is the advice now?
What kind of bookings, hotels or something else?
If hotels I think currently it still is best to pay at the hotel, as you will not have to pay the tax. Usually they will tell you the price in USD when you book and then convert into ARS based on that days exchange rate.
It is also now quite a good place to
Redeem ihg points if appropriate and you can do well buying them with today’s promo.I need to make various bookings in Argentina – what is the advice now?
While the exceptional gap between the official rate and the MEP has now narrowed, nothing else has changed for the purposes of card payments and the blue rate has barely moved.
The Blue rate was always the “real” exchange rate one should I be getting (the fair price of a currency can be computed using the difference in interest rates). It obviously also prices in scarcity and the fact it was somehow illegal but it was so widely available that was very low.
The official rate was some sort of made up number the government was producing based on fake statistics of their own.
The devaluation simply brings the official rate more in line with the blue rate.
I need to make various bookings in Argentina – what is the advice now?
What kind of bookings, hotels or something else?
If hotels I think currently it still is best to pay at the hotel, as you will not have to pay the tax. Usually they will tell you the price in USD when you book and then convert into ARS based on that days exchange rate.
I’m booking hotels and a couple of flights.
With the hotels priced in US$ the cost of hotels has basically doubled the ARS rate. I looked at the IC in BsAs as an example – the dollar amount hasn’t changed but the rate per night has gone from ARS89,000 to 190,000.
Previously I know that you paid with a credit card I wouldn’t pay the tax and you would get a rebate from the credit card company. I presume that no longer happens.
I realise we are getting a better exchange rate to start with but if the hotels have doubled their costs there doesn’t appear to be any benefits for tourists.
And can local people suddenly afford to pay double?@qc – with respect, I think you may have misunderstood how all this works. The doubling of the hotel’s ARS rate is a simple, automatic function of the devaluation from c.365 to 800 which will also now devalue a further 2% each month. There remains a gap between the official rate and the current MEP rate of 995 (less the large card company cut) so you will get a refund on your card as things stand today (but be aware it can all change significantly again) that will give you a better US$ albeit much less than before, but it was made clear above that it was totally exceptional before so to lock in then.
I’m perfectly certain that I don’t really understand it but with the example of the IC I quoted it’s evident that prices have doubled in some cases. How can this continue if Argentinians are priced out of staying in hotels.
IIRC correctly you have bookings made already so are you able to see how these compare to what you will pay now?
@qc – yes, it’s correct that for Argentinians, imported goods or anything priced in US$ has doubled in ARS terms but those who can afford international hotels didn’t keep any money in pesos and couldn’t buy (m)any dollars at the official rate as the central bank has none – not even to pay for new banknote printing. That’s why the whole financial and political/social situation will remain very fluid.
Also, locals don’t pay the international prices you see which is why I always advocate booking hotels directly and it’s particularly the case in countries like Argentina; hotels need local clientele.
For a UK based tourist, US$ prices haven’t doubled and you still get a better effective exchange rate plus the starting prices are much lower. It’s just not quite what it was, but the huge ‘discount’ was really so absurd that it was unsustainably high/too good to be true.
I have shortened our trip by 6 days in Argentina because of the increase in hotel costs. Last time we were in BsAs we stayed at the Alvear Palace for a couple of nights – costs now astronomic. We’ll spend most of our time in Chile where the hotels are cheaper.
Incidentally there’s quite a bit of AVIOS availability on IB in J to EZE next month if anyone wants to go.
Does anyone have experience of high end hotels in Argentina refusing to accept Peso? I have made a reservation online for a few months time and the hotel are insisting over email that the charge will be processed in USD as they do not accept Peso unless via transfer from an Argentinian bank account. I would like to figure out whether to push them further on this or if they are entitled to take this stance.
Does anyone have experience of high end hotels in Argentina refusing to accept Peso? I have made a reservation online for a few months time and the hotel are insisting over email that the charge will be processed in USD as they do not accept Peso unless via transfer from an Argentinian bank account. I would like to figure out whether to push them further on this or if they are entitled to take this stance.
I have never come across this nor heard reports of it in BsAs, although someone above did mention a hotel in the Bariloche area requiring US$ payment. I don’t believe a hotel is allowed to take payment in US$ as they are likely to be paid outside the country. Some smart shops do try to insist on US$ cash but will give a good discount for it and many restaurants will give a decent discount (or have a special menu) for US$ or even peso cash. It’s particularly odd if it is a high end hotel, so I think it’s possible there may have been a misunderstanding/miscommunication about how the process works.
Thank you JDB, much appreciated advice as always. I asked direct over email whether the USD rate will be converted at time of payment to ARS and then processed in ARS. They bluntly replied back saying the hotel does not accept Peso unless via bank transfer from an Argentinian bank account.
I may push them once again to check this is the official policy and perhaps ask for a copy of the booking and payment t&cs / policies.
If useful it is a relais and chateaux hotel in Patagonia.
@tblank19 – that sounds rather like the hotel someone mentioned before. Whatever it may or may not say in their T&Cs they will no doubt do exactly what they want even if it isn’t lawful for them to charge a card in US$. I hope they aren’t proposing to add IVA/VAT as well. At current rates, billing in US$ adds about 25-30% to the cost and you are on notice that the hotel is a dodgy clip joint.
@tblank19 – that sounds rather like the hotel someone mentioned before. Whatever it may or may not say in their T&Cs they will no doubt do exactly what they want even if it isn’t lawful for them to charge a card in US$. I hope they aren’t proposing to add IVA/VAT as well. At current rates, billing in US$ adds about 25-30% to the cost and you are on notice that the hotel is a dodgy clip joint.
It’s not the one I mentioned that charged me in US$ in El Calafate, and that one didn’t warn me or about the 15% extra they added on as a “card fee”.
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