< PrevNext > Tumult in Latin America By Chris Davis / March 26, 2017 Share It was a turbulent 2016 across Latin America. Some countries were wracked by political instability and unstable currency while others were far more stable. While business travel per diems in some Latin American cities increased sharply, others declined steeply. Meanwhile, per diems in Canada generally increased, sometimes significantly.Brazil, Argentina and Venezuela have faced political challenges and recession, but Peru sported solid economic growth and a stable currency versus the U.S. dollar. Lima, Peru's capital and largest city, was the most expensive city in the Americas outside the U.S. Its per diem rose almost 18 percent from 2015 to 2016 to $303.61 in U.S. dollars, even though its currency, the sol, weakened slightly versus the dollar.Lima's average hotel cost also topped the non-U.S. roster of Corporate Travel Index cities in the Americas. The $193.40 represents a 13.4 percent increase from 2015. According to Advito, the number of hotels in Peru is growing, but most of the rooms are midscale. BTN's Corporate Travel Index tracks only upscale hotels in non-U.S. cities, and Peru boasts little in the way of upscale development. ArgentinaLima's per diem increase is hardly representative of its Latin America neighbors. In fact, only one city's costs in the Americas outside the U.S. exceeded it: Buenos Aires. There, the $260 per diem represented more than a 31 percent increase from 2015 to 2016.Under a new presidential administration at the end of 2015, Argentina removed currency controls around the peso, inflating local prices skyward. The Corporate Travel Index tracks hotel stays that occurred between January and November, so the 2015 numbers did not include that inflation. Even though the peso became far weaker against the U.S. dollar, prices nevertheless increased enough to raise per diems from those 2015 numbers.Argentina estimates its GDP declined 2.5 percent in 2016, but pointed to signs of improvement in the closing months of the year. Advito, too, considers an exit from recession possible, and forecasts a 2 to 4 percent increase in corporate hotel rates in 2017, the largest jump in the region. BrazilPer diems in only a handful of non-U.S. cities in the Americas declined in 2016. One is Rio de Janeiro's $212.50, which dipped 1.3 percent. Sao Paulo, the other Brazilian city in the index, increased less than a percentage point to $256.42.Many factors affected Brazil's travel prices: the Summer Olympics, Zika and the impeachment and removal of the president. Most relevant is the fact that Brazil remains mired in a recession, keeping demand for business travel low. Airfares have dropped significantly. While Advito projects Brazil's 2017 corporate hotel rates to increase 2 to 4 percent, the country estimates its GDP declined 3.6 percent in 2016, according to Reuters.CanadaThe largest per-diem decline in the Americas outside the U.S. belongs to Calgary, where oil represents a significant part of the economy. Low crude oil prices helped drive Calgary's per diem down nearly 11 percent to $251.54.Per diems in the other four Canadian cities in the Corporate Travel Index, on the other hand, all increased. In Vancouver and Montreal, they rose by double-digit percentages. Domestic air service and routes to the U.S. are on the rise, per Advito, so 2017 prices should again increase, and Advito expects hotel rates to increase 2 to 4 percent.OutlookA Note on CaracasPrevious editions of this index included the Venezuelan capital of Caracas. Given the difficulty of traveling there during the current political and economic crisis and the withdrawal of international air service, BTN has replaced it with Guayaquil, Ecuador's largest city.Given the economic malaise and unstable currencies of Latin America, Advito principal and VP Bob Brindley said travel prices there should remain soft in 2017, though pockets will increase. He also noted, though, that some Latin American hoteliers are pushing U.S. buyers to deal with them in U.S. dollars, a maneuver he recommended buyers resist. "Part of it is that [hoteliers are] showing an attractive rate to the U.S. corporation in dollars and it ends up getting accepted," Brindley said. "This is viewed as the less risky or more assured rate because of less fluctuation in the dollar."