Argentina: when football and luxury defy inflation

Samia Tawil

By Samia Tawil20 décembre 2022

As Argentinians celebrate their World Cup title, the country wants to believe in a saving grace that will help turn around the economy, in crisis for years. However, some of the luxury sectors do not seem to have waited for this victory to find their audience, as some counter-intuitive consequences of inflation seem to abide by no rules.

Argentina's team, crowned world champions in Qatar, on December 18 at the Lusail Iconic Stadium. This third title was widely celebrated throughout Argentina as a breath of fresh air that the population had long hoped for. Hublot, a partner of the FIFA World Cup for the fourth consecutive year, also praised the victory (Julian Finney/Getty Images)

As Argentina wakes up as world champion, a title it has been hoping for since 1986, a wind of hope seems to be blowing across the country with a shattered economy. Since late 2019, the peso has been experiencing an exponential devaluation. While the exchange rate was at 70 pesos to the dollar at the beginning of 2020, it has now reached $170 AUD. In three years, the entire economy has been brought down, until the resignation of Economy Minister Martín Guzmán last July. This does not bode well for the man who had been the architect of the program to negotiate Argentina's colossal debt with the IMF, which reached $324 billion at the time. However, in the midst of a deeply destabilized economy, some luxury sectors seem to be doing well. From interior design to high-end hotels, demand remains solid. Sectors that will be able to capitalize on the recent World Cup victory.

Luxury hotels attract local customers again

During 2021, we changed our customer focus to local and then to regional when the flights reopened. This has made us competitive with this new type of clientele

Pablo Almar, director of the Madero hotel

The shutdown of large hotels in Buenos Aires during the pandemic resulted in heavy maintenance costs (Shutterstock)

During the period of lockdowns – which were particularly long in Argentina - the luxury hotel industry suffered, seeing its large hotels on the Avenida de Mayo empty of guests and staff. The closure of huge structures such as the Hotel Madero or the Hilton Buenos Aires to the public generated heavy maintenance costs, which the ATP (Asistencia de Emergencia al Trabajo y a la Producción) partially compensated in 2020, countering the risks of bankruptcy. In addition, there were costly reopening protocols ranging from 100,000 to 300,000 dollars. At the end of the pandemic, the Madero Hotel had an occupancy rate between 30% and 40%, a worrying and very unusual figure for such an establishment. Yet by the end of 2021, a national craze for its architectural treasures and tourist wonders had taken hold of the country's wealthy class. The director of the Madero Hotel, Pablo Almar, explains: "It was not until February 2022 that our business began to resume. During 2021, we changed our customer focus to local and then to regional when the flights reopened. This has made us competitive with this new type of clientele, both in the booking of our rooms and in our catering offer.  Today, local clients frequent the establishment much more than they used to.” Indeed, the numerous activities and online services devised by some of these hotels have made one of the most popular tourist destinations in the world accessible to all. Online cooking classes given by Chef Steven Jung himself from the Hotel Madero or tasting classes and gourmet delivery services have appealed to this new audience. Event rentals have picked up again, as María Eugenia Motter, marketing and communications manager for the Palacio Duhau, explains: "Our hotel has picked up again with high occupancy and reservations in our restaurants, but also many events, our grand salon is fully booked for the next three months." Weddings, symphony concerts, and even film shoots are bringing these prestigious venues back to life and anchoring them in porteña life.

Avenida de Mayo, which connects the historic Plaza de Mayo and the National Congress in Buenos Aires (Shutterstock)

The design world on the lookout

Galerias Pacifico, one of the most luxurious shopping centers in Buenos Aires (shutterstock)

The design sector is also on the upswing and benefiting from the post-pandemic fallout. The more affluent part of the population sought to improve their housing during the pandemic, even by building country houses. While this was a global phenomenon, the city of Buenos Aires is unique in that people from the upper socio-economic class are used to having two homes in Buenos Aires: an apartment in the city for the work week and a villa in the suburbs for the weekends. Many interior design firms have been responsive during the lockdown, opting for strategic campaigns to build loyalty among a wider audience that now responds to their in-person exhibitions.

This is the case of the Architecture Biennial of Buenos Aires, which made its comeback last month at the Faena Art Center, with no less than 1,000 studios exhibiting, 9 Pritzker Prizes present, 700 international conferences, and a total of 1,500,000 visitors. This event is one of the three major international events, along with the Venice Architecture Biennale and the São Paulo Biennale. The 38th edition of the design exhibition Casa FOA, was also full with a total of 62,000 visitors in the Retiro district alone, making it one of the most visited exhibitions in recent years. The choice this year to install the exhibition in the building of the Boarding School and Parish House Madre Admirable clearly reflected the desire to revive this monument and anchor it in the dynamism of the city. Throughout 35 pavilions where different brands were exhibited, customers were able to immerse themselves in atmospheres that were sometimes industrial, sometimes cozy, but always avant-garde.

The 18th International Architecture Biennial of Buenos Aires took place from September 29 to October 2 and included several conferences (La Bienal Arquitectura)

The choice of materials, from marble to Patagonian wood, also reflected a growing desire to reconnect culture to nature. This momentum is also reflected in the various artistic installations that punctuated the exhibition, combining plant walls and modern sculpture.

Argentinians are very keen on going out, and bars have been busy again over recent months

Josefina Simon, psychologist

This trend is confirmed at Johnson Acero, which combines the warmth of wood in vintage kitchen designs with sophisticated worktops worthy of the trendiest restaurants. Psychologist Josefina Simon explains: "Argentinians are very keen on going out, and bars have been busy again over recent months. Investing in high-end furniture with noble materials is more about aesthetics than utility, and a desire to bring rooms to life, such as kitchens, that are rarely used by city dwellers, and even less so among the wealthy.” It is rather a question of building bridges between the interior and the exterior, of blurring the boundaries between family life and festive gatherings, than of an intention to isolate oneself. This year's exhibition extended to the property's beautiful garden, offering a multitude of outdoor design options, including various sculptures and artworks.

The installation "Metamorfosis" by Martín Gómez Soto and Eva Gómez Soto, from Estudio GSem (estudiogsem)

From design to gastronomy, from hotels to art, and even to football, one thing federates: the desire to maintain a resilient Argentinian creative force in the face of the omnipresent political and economic challenges, an aesthetic of life, a pride today galvanized by the victory of the national team, which now carries hope for an entire people.

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