Punta Del Este Case Study
Punta del Este is a small town with few inhabitants, making their main source of profit from tourism and real estate investments. Its main consumer is the Argentinian public; representing seventy percent of vacationers who every year visit the beaches in this small town. Since 2009, Argentina adopted a series of economic obstacles, for example, the information exchange treaty that hindered tourism in Punta del Este, together with the Argentine peso monetary devaluation. These measures impacted negatively in Punta del Este, as the Argentinian vacationers stopped coming, and with it, economic and social problems multiplied. Since tourism is the economic mainstay of the city, it is essential to gain tourists from other parts of the world. The truth is that in Latin
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America all changes happen to be slow; however, if nothing is done quickly then the consequences will be immeasurable. The mistake was that the growth the city over the years was not a product of the city itself but of the Argentine private capital investment. In order to go back to the golden years, it is necessary to outline points of how Punta del Este can enlarge its tourism base and recover its market segment, by pointing current problems and promoting key areas of the city such as transportation, sports and special interest events.
The city, known for its famous beaches and marvelous summer, does not count with the same prestige in the rest of the year, mainly because it settled into a situation that was not real and could bring potential harm in the future.
It is striking that the city is still in this situation, given that this is not new; looking at the tourism history of the country, we can see that Punta del Este has always been severely affected by the economic and political problems of Argentina; this happened in 1953 because of the opposition that the Peron’s government faced from Uruguay, and finally in 1981 because of the monetary devaluation of the local currency. The mistake of Punta del Este was not having achieved their independence from Argentina and the lack of direct substitutes available for when the situation turns bad. The city is facing a negative scenario with no prospect of improvement in the short term, and with the lack of foreign investment, the situation only tends to get worse. Today there are more than eight thousand properties still waiting for an owner. In recent years, local people only thought about square feet, and the sad reality is that now they need to start focusing again in
tourism.
As of today, tourists do not come to seek other options than to enjoy the beaches because there are no other options. This narrows the time of tourism because there are only three beach months in a year that match the same summer period of the region which opposes the northern hemisphere. However, the safety and calmness that Punta del Este offers differentiates its product portfolio from other beaches in the region: Brazil, Argentina, and Chile. The climate also helps; water in Punta del Este is usually warmer than in Argentina and Chile, and the weather is nicer than in Brazil. Leaving aside the beach, which is not always available and depends in the good weather, the city lacks the infrastructure to make possible multiple services be offered. There is a lack of activities in the city and shopping is really limited with almost no stores to promote local shopping. From a recent interview, the City Mayor admitted that the alternatives for the beach were limited and that they are working not only on this but also to promote year-long activities in the city to attract more people. He thinks that Punta del Este is a wonderful place with a dazzling nature, making of it a unique place, and bets that it will not take long for tourists to start coming again leading the city back to its normal situation.
Punta del Este has only a permanent population of approximate nine thousand people, during the summer, this number grows exponentially up to around four hundred thousand. The lack of investment can be accounted to the fact that it would not be profitable having seen how many people live on a year base in the city; however, an increase in the infrastructure may also lead to even more profitable and crowded summers. One way to work on this is by improving the transportation. Currently, there are limited ways on how to access the city; the majority of international flights arrive in the capital city, Montevideo, which makes people arrive in lower frequencies. The city airport is nothing else than a vague figure and the port has no use at all. From the same interview mentioned above the City Mayor stressed the important of this matter and that they are working exhaustively to improve the connectivity of the city; he mentioned a recent meeting that took place in Panama in an attempt of uniting Punta del Este with Central America to attract more tourism into the region. It is impossible to deny that that this will be positive for Punta del Este; however, this only has to be the beginning and work needs to be continued.
America all changes happen to be slow; however, if nothing is done quickly then the consequences will be immeasurable. The mistake was that the growth the city over the years was not a product of the city itself but of the Argentine private capital investment. In order to go back to the golden years, it is necessary to outline points of how Punta del Este can enlarge its tourism base and recover its market segment, by pointing current problems and promoting key areas of the city such as transportation, sports and special interest events.
The city, known for its famous beaches and marvelous summer, does not count with the same prestige in the rest of the year, mainly because it settled into a situation that was not real and could bring potential harm in the future.
It is striking that the city is still in this situation, given that this is not new; looking at the tourism history of the country, we can see that Punta del Este has always been severely affected by the economic and political problems of Argentina; this happened in 1953 because of the opposition that the Peron’s government faced from Uruguay, and finally in 1981 because of the monetary devaluation of the local currency. The mistake of Punta del Este was not having achieved their independence from Argentina and the lack of direct substitutes available for when the situation turns bad. The city is facing a negative scenario with no prospect of improvement in the short term, and with the lack of foreign investment, the situation only tends to get worse. Today there are more than eight thousand properties still waiting for an owner. In recent years, local people only thought about square feet, and the sad reality is that now they need to start focusing again in
tourism.
As of today, tourists do not come to seek other options than to enjoy the beaches because there are no other options. This narrows the time of tourism because there are only three beach months in a year that match the same summer period of the region which opposes the northern hemisphere. However, the safety and calmness that Punta del Este offers differentiates its product portfolio from other beaches in the region: Brazil, Argentina, and Chile. The climate also helps; water in Punta del Este is usually warmer than in Argentina and Chile, and the weather is nicer than in Brazil. Leaving aside the beach, which is not always available and depends in the good weather, the city lacks the infrastructure to make possible multiple services be offered. There is a lack of activities in the city and shopping is really limited with almost no stores to promote local shopping. From a recent interview, the City Mayor admitted that the alternatives for the beach were limited and that they are working not only on this but also to promote year-long activities in the city to attract more people. He thinks that Punta del Este is a wonderful place with a dazzling nature, making of it a unique place, and bets that it will not take long for tourists to start coming again leading the city back to its normal situation.
Punta del Este has only a permanent population of approximate nine thousand people, during the summer, this number grows exponentially up to around four hundred thousand. The lack of investment can be accounted to the fact that it would not be profitable having seen how many people live on a year base in the city; however, an increase in the infrastructure may also lead to even more profitable and crowded summers. One way to work on this is by improving the transportation. Currently, there are limited ways on how to access the city; the majority of international flights arrive in the capital city, Montevideo, which makes people arrive in lower frequencies. The city airport is nothing else than a vague figure and the port has no use at all. From the same interview mentioned above the City Mayor stressed the important of this matter and that they are working exhaustively to improve the connectivity of the city; he mentioned a recent meeting that took place in Panama in an attempt of uniting Punta del Este with Central America to attract more tourism into the region. It is impossible to deny that that this will be positive for Punta del Este; however, this only has to be the beginning and work needs to be continued.