Fën Group for Hotel Management Investors :

The perspectives for the hotel sector in Argentina could not be better.

Are you interested in investing in hotel management in Argentina? nvesting in Hotel management in Argentina is an excellent business opportunity. The hotel industry is one few industries in the country with a solid base that guarantees growth and a profit on an investment in the medium and long term. The potential of the hotel industry is due to both the supply and the demand.

The demand for hotel is determined by tourism and corporate trips. Both areas have an enormous growth potential in Argentina.

The high rates of tourism in Argentina in the last few years (higher that 10% a year since 2002) is due to the beginning of a long term tendency and not to the devaluation as some people believe. An example of this is Calafate, where tourism grows at a rapid rate despite the dollarised tariffs, the only limitation for tourism in Calafate is not the demand but the lack of available flights to get there. Tourism growth in Argentina has several explanations:

• Worldwide constant growth of tourism at phenomenal rates mainly due to a great amount of people with high incomes and free time.
• The joint effort of the public and private sectors of Argentina to promote the country as a tourist destination in international conferences has been fruitful since Argentina is gradually becoming one of the favourite destinations for tourists from all over the World.
• The international tendency towards "natural " tourism makes Argentina a unique and highly competitive destination.
• Facts like terrorism and the Tsunami have turned alternative destinations into mainstream ones.
• In the future, if Argentina signs the agreement with China, the amount of tourists that visit Argentina may be twice as much in a few years.

On the other hand, there has been a significant increase in the demand due to the considerable amount of business trips after Argentina's emergence from default which generated an increase in the investments and in the growth of the country.

To sum up, analysing the hotel demand it is possible to say that the total volume of the hotel business can be doubled in the next 5 to 7 years with variations according to the city.

Hotel demand also provides more opportunities of growth and an increase in profitability of the local hotel industry:

• LMost of the local hotel industry is made up of independent hotels that are old-fashioned and inefficient. There are possibilities of maximising the potential of the existent hotels and providing customers with a better service.
• The development of trademarks in the hotel industry in Argentina is very limited. While all over the world 75% of the hotels use a recognised trademark, in Argentina only 15% do so. There are greater possibilities of attracting clients by providing them with a solid service and taking profit of the advantages of having a regionally recognised trademark.
• Compared to other parts of the continent the tariffs in Argentina are still very low. There is a chance of considerably improving the incomes of hotels.
• There is a global tendency to use the internet as a way of advertising goods and services. The internet has the potential of significantly improving the tariffs that a hotel can charge for the rooms.

To summarise, the potential of the demand and the possibilities of improving the supply show that the hotel industry is unique. Investing in well managed and developed hotels which used recognized trademarks is an excellent alternative to do business in Argentina these days.

How to invest in the Argentinian Hotel Industry- Services provided by Fën Group

Investing in the hotel business requires a detailed know-how from the business, architectonical and operational viewpoint. Fën group can provide the investor with a comprehensive service during the investment process.

Defining and Evaluating the Business

The first step in a hotel investment consists in detecting the business opportunity: What is the best location for the hotel (city/neighbourhood/block)? Is it better to build a new hotel, remodel an existent structure or buy a hotel that is already working? In the hotel business, it is not easy to find opportunities. As in Fën group we are actively involved in the hotel market, we always know of investment opportunities in the different areas of the country. We offer our investors the chance to select the business opportunities and take part in or conduct the negotiation process with the owners.

At the same time, the investor has to develop a business plan to evaluate the profitability that he expects to achieve from his investment. This is generally difficult since the hotel market is not transparent and the official information is scarce. Many investors are met with unpleasant surprises when the hotel is already working (cheaper tariffs, higher costs). In Fën Group, we help the investor develop a business plan to help project the tariffs, possibilities of occupation and costs using the information of our hotels and our most important tourism operators.

At this point, it is also important to define the type of hotel and its trademark. What is better, a superior four star hotel, a standard four star hotel or a Boutique hotel? Is it better to have a few ample rooms or more rooms but smaller? How should the rooms be furnished? A bad decision at this point may make the difference between a good or a bad business. In Fën, we offer our three regionally recognised trademarks and formats to the investor (Dazzler, Dazzler Tower y Esplendor) so as to make sure that the hotel is immediately recognized and occupied once it is open. We also advise the investor about the important aspects of the product: architecture, design, furniture, service areas, etc. As we manage more that eight hotels in cities and holiday resorts and we have carried out more that 10,000 surveys to our guests, we know exactly what each customer wants and what the requirements that a hotel has to comply with are.

Planificación y Pre-Apertura

Once the trademark and the type of product have been defined, the construction and pre-opening stages begin. The job positions have to be defined, the personnel has to be selected and trained, the computer system has to be installed, advertising campaigns have to be launched, the essential elements have to be bought, etc. This is not an easy task. A medium sized hotel; for example, requires that purchase of more that 700 items and to do so it is necessary to know the characteristics and specifications, which suppliers are reliable and so on and so forth. In Fën, we offer pre-opening management to the investors and they have the guarantee of counting on the most experienced company in the hotel business since we have done more that 8 openings in the last 3 years and 3 more during 2005.

Operating the Business When it is already Working

Once the hotel is open, it is necessary to operate it efficiently to give a high quality service that compiles with the international standards and also to generate and increase in the profitability of the investment. In Fën, we count on the best Argentinian team in Hotel management. If you let Fën manage you hotel, it will have:

Higher Sales

• Regionally recognised trademarks
• High sales in the corporative and tour & travel sectors
• Loyalty programs (e.g. Secretaries Club )
• Use of electronic channels (Internet, GDS)
• Advertisements in national and regional media

Better Service Quality

• Rigorous operative standards and quality control
• More experience and operative know-how
• Permanent surveys to evaluate customers' satisfaction and "mystery shopper" programme
• Attraction of the best talents due to the offer of a more hotel career

More Profitability

• Joint negotiation with the suppliers
• Experience and knowledge of most of the local hotel suppliers
• enchmarks to compare your hotel with8 hotels in the country
• Centralisation of administrative tasks

To summarise, we give all the services that are necessary to have an efficient investment in the hotel business and we are the best option in Argentina.

Contact us sending an e-mail to business development.