"Argentina had got used to printing as much domestic currency as it liked. It now had to earn dollars with an economy that had forgotten how to export. It also required public spending to be controlled.
It required, in fact, Argentina to stop acting like Argentina."
Alan Beattie
Update December 17th 2015: Following the election of Mauricio Macri as President, the Argentinian government has lifted controls on the peso; on the first day of trading, the peso lost around 30% of its value. Essentially, this means that the 'blue dollar' will cease to exist and travellers no longer have to enter the country with US currency to benefit from the black market exchange rates. Travellers can also take advantage of using their credit cards and ATMs as they would in any other country.
Further inflation remains a possibility and the value of the peso may fluctuate dramatically. We'd advise you to keep abreast of developments and exchange rates prior to travel.
Update January 2020 | After another few crazy years for the economy in Argentina - making it really cheap for travellers in South America - it sounds like things are back to how they were when we wrote this article.
Economic crisis has become as synonymous with Argentina as Maradona, Messi, Evita and the tango; but it wasn't always that way.
In France, some still use the phrase "riche comme un argentin" to describe the wealthy and the decadent. Its etymology stems from the early 1900s when, due to its position as a significant exporter of beef and grain to Europe, Argentina was an economic powerhouse. The subsequent wealth, concentrated in the hands of the few, was flaunted by those who crossed the Atlantic for travel and business in Europe.
Fast-forward to the second half of the 20th century however, and the economic fortunes of Argentina could not have taken a more divergent path from that gilded age. Protectionist, isolationist and weakened due to political instability, the country faced periods of hyperinflation, excessive borrowing and a failed currency. Such travails resulted in the "the largest government bankruptcy in history".
From its fleetingly bright, commodity-driven period in the ascendancy, "a century of decline" ensued. Recovery from the 2001 bankruptcy, which saw five presidents come and go in the space of a few weeks, has occurred but, for a number of reasons, the country's economy remains a complex, problematic and bewildering beast.
But what does this mean for travellers in 2015? How much can systemic macro-economic capriciousness actually affect your personal experience of the country?
The truth for these two seasoned Latin America travellers was that we experienced our toughest travel moments on this two-year trip whilst in Argentina. We were well aware of the economic history and the necessity to come into the country strapped down with bundles of US dollars. We were also fully aware that we'd probably have to travel leaner and meaner than in other countries.
However, the reality was a shock to the system. For reasons we'll outline below, we both decided after our first four days in the country that our travel plans for would have to drastically and rapidly change. Instead of two months discovering wine country, photographing gauchos and wandering through less-known towns, we could barely afford to stay two weeks.
We weren't the only ones. A number of backpackers were also making the decision to hasten their departure from the country which they were most excited about when planning their trips.
Therefore, we feel it's important to prepare other budget backpackers for what they may face when travelling here in 2015 and early 2016. This post is not to warn people off visiting the country but rather to make sure you plan for some of the realities of travelling on a budget in Argentina.
#1 PRICES ONLINE AND IN GUIDEBOOKS ARE IRRELEVANT
Visit any hostel in the world and you'll find backpackers bemoaning the accuracy of the Lonely Planet when it comes to prices. However, in Argentina we're not talking about the books being a dollar or two out; instead their prices are pretty much redundant. Need a few examples?
The public transport which brings you on a three-hour round trip from El Calafate to the Perito Moreno Glacier. In our 2013 South America Lonely Planet, this round-trip is listed as AR$120 per person.
We had to pay AR$400. This was the cheapest option we could find in town as it left later than all the other buses - one of those would have cost AR$450 per person.
Entry to the Glacier? AR$100 for a foreigner in the book, $160 from a blog post in early 2015.
What did we have to pay? AR$260 each, an increase of 160% in less than a two-year period.
This was the case for everything in the country. Transport, food, accommodation and every single entry fee had increased by at least 35% from the prices we had researched. As bloggers, we naturally do a lot of our travel planning on-line. More often than not, someone's blog or a Trip Advisor post will have relatively up-to-date information on transport and entry fees. With Argentina, it became clear that this wouldn't be the case.
Of course, in a country which has "one of the world's highest inflation rates", at 28.2% in 2014, it shouldn't be too much of a surprise that prices are increasing. What did shock us was the sheer rate at which costs were going up, it wasn't just year-to-year, but month-to-month.
Something which sums the unpredictability of budgeting for travel in the country is our entry ticket to Punta Tombo National Park. Our hostel informed us that the price had increased again a few weeks previously, from $130 to $180 for a foreigner (a local pays $70). When we got to the park, they hadn't even wasted the ink on reprinting the tickets - instead a black marker was used to score out the old price. After all, what's the point in printing tickets with the new price when you have no idea how long that will be around for and inflation rates are running between 25-40%.
#2 OFFICIAL EXCHANGE RATES ARE AWFUL
Throughout Latin America, we have become used to putting purchases on our credit card. In Argentina, we wouldn't dare.
The reason? The Argentine peso is officially overvalued. You'd need an economics degree to get to grips with the reasons for this but, for us travellers, the short story is this: never pay for anything in Argentina with your credit card and never take money out of the ATM.
Go against this advice, and you will be paying up to 40% more than you need to be. It's broken our hearts to see and talk to so many travellers who haven't been aware of this and have been blissfully putting everything on plastic or paying for their Argentina trip with pesos taken out of the ATM. Paying for anything on-line listed in Argentine pesos, such as flights or bus tickets, is also going to be charged at this exchange rate.
So what's the alternative? Paying with hard cash whenever and wherever you travel.
#3 bring US dollars, use the blue dollar
$1 USD = AR$9.5 | $1 USD = AR$16.3
Which exchange rate would you prefer? Well, the one on the left is what you'd receive from the ATM on October 25th 2015. The rate on the right? That's the 'blue dollar' conversion which can only be found on the black market, a market which has become the de-facto national bank for many Argentineans and any sensible tourist.
In response to government controls, the overvaluation of the peso and the fear of lifelong savings being wiped out, the 'blue dollar' was established on the streets as an alternative exchange market. Wander down any main street in Buenos Aires and small groups of men shouting out 'cambio, casa de cambio' is a common sight. It may seem dodgy to a first-timer here but these arbolitos have become a lifeline for travellers. By exchanging your $100 bill with them, you'll receive 653 pesos more than if you took out the equivalent amount from the ATM, which uses the official rate.
Of course, you are only able to take advantage of the unofficial rate if you are in the position to have hard foreign currency to exchange (dollars or euros are best). So, as you may have guessed, to travel economically in Argentina, one must go against all received wisdom about travel safety and security, and try to bring a sizeable stash of cash into the country.
This is what we did. On our first day after crossing form Chile, we found a ski-wear shop listing very decent blue exchange rates in their window and changed a big chunk of our USD there and then. If we hadn't done this, then those horrendously expensive first few days would have cost us about 35% more.
Note that the best rate and easiest methods for changing to the blue dollar will be in Buenos Aires and other large cities; more remote and less touristy locations will more difficult to navigate and have an inferior rate; be aware of this before travelling. Further, a number of hostels, restaurants and tour companies will be willing to accept USD as payment, but you need to ensure that they are charging you close to the blue rate, not the official.
If you however decide to visit a cueva or store to change your currency in person, prepare yourself by checking the current blue dollar rate on the Dolar Blue Twitter account. This is updated daily and, although you won't be able to exchange at the 'pure' price it notes, it should act as a marker to ensure you don't get ripped off on the street.
For more information on how to travel with the blue dollar, we've linked to two articles at the bottom of this post. Do remember that this is still an illegal black market practice, despite being commonplace, and due caution and diligence should be exercised before you try to change money as it is not an entirely risk-free process.
#4 on-line services can make life easier
If you are not able to bring a lot of hard currency into the country, or you run out of the funds you did bring, don't despair. There are three on-line services available which allow you to get close to the blue dollar exchange rate, minus a small commission, without the need to carry all your cash with you. Sign up, transfer money from your bank account and pick up your pesos from a designated office (note that these offices are limited to the major cities).
The companies to use are Xoom, Azimo and Ria, with Azimo being the best for UK travellers (the official rate is £1 = AR$14, but you can get AR$22 by transferring money on-line).
#5 the harsh reality of budget travel in 2015
Even if you follow the above steps, it's also necessary to face the truth that budget travel in Argentina in 2015 is near impossible. Taking advantage of the blue market may make the country 'cheaper' to travel in, but, given the already high price point, continuing inflation and the inconvenience of actually obtaining pesos, it will never seem 'cheap'.
Followers of our journey will know that we budget about $1400 USD between us for each month and, aside from our time in Belize and part of our time in Peru, we haven't really struggled to have a fantastic time whilst sticking to, or even beating, our budget.
This is impossible in Argentina.
In our first four days, which encompassed sleeping in an eight-person dorm, finding the cheapest transport to Perito Moreno, eating only one extremely cheap hostel-cooked meal and taking the cheapest overnight bus to Puerto Madryn, we still ended up spending $400 USD. And that was using the blue conversion rate, not the official.
It was this chastening period, plus a depressing afternoon researching the current cost of travel elsewhere in the country, which led to us both agreeing we couldn't stay for long in this beautiful country. People had told us that Chile and Uruguay would be the most expensive countries to travel in but, take our word for it, in 2015 that simply isn't true. In one hostel, a receptionist told us that Argentineans were now travelling to Chile to spend their money as it was cheaper there than in their own country; it used to be the other way round.
When we arrived in Puerto Madryn, we were almost moved to tears and had a few expletive-laden tirades when we discovered how much basic tours and national park entry costs had increased this year. We were hungry all the time, felt trapped and couldn't believe how much the country was ripping us off. The cheapest activity in town was to cycle to a whale-watching spot but we couldn't even afford that because the country deemed $25-30 for one half-day rental acceptable (by far the most expensive bike rental we've seen on the entire trip, contrast it with $5 for a full day in San Pedro de Atacama, Chile). Instead, and determined to have at least one under budget day, we walked part of the 32 kms in the hot sun and got lucky with kind locals responding to our hitch-hiking signals.
Next up? A horrendous 25-hour ride on the most expensive bus we've taken in two years (but was actually the cheapest option available to us out of the six companies on offer). The bus looked like it should have been scrapped in 1992 and was lightyears behind the excellent cheaper long-haul equivalents in Peru and Chile.
The only saving grace from our Argentine experience? We found an AirBnb apartment in Buenos Aires for £16 per night (for which we could securely pay on-line in GBP without having to bother about pesos or blue dollars). This allowed us to actually be able to enjoy the 'Paris of the South'. Perhaps not in the manner that those Argentinians enjoyed France in the 1920s, but at least we might be able to stop worrying about how travelling for more than a couple of weeks in this country was going to bankrupt us for the rest of this trip and enjoy a couple of empanadas.
Don't cry for us Argentina, it's you we feel sorry for.
Due to the likelihood of further price fluctuations, and an unclear political outlook with a new round of presidential elections taking place, please let us know your own experiences in the comments so that we can keep this post current and relevant to help travellers plan their Argentina travel budget. For example, if the entry prices for Perito Moreno, Punta Tombo or Valdes National Park go up, tell us so we can update and amend the article.
Further reading on the blue dollar and how best to approach it on your trip:
The Argentina Independent: Inside Argentina's Blue Dollar market
Gringo in Buenos Aires: How to get the best exchange rate when travelling to Argentina.
Buenos Tours: Getting the best exchange rate for your dollars
