March 19, 2015 
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In This Week's Issue:

Currency Volatility in Latin America

Latin Trade's latest index shows major currencies more volatile than they've been in more than a decade

 

By José Luis de Haro, Latin Trade

 

It is a crucial time for currencies around the region. While the U.S. Federal Reserve is ready for its first rate increase since the financial crisis, crude oil prices have dropped more than half since June last year. Those headwinds are taking a toll in many countries around Latin America, in particular those that depend on commodities and have not implemented enough reforms to confront the fiscal and macroeconomic challenges ahead.
 

Region's Main Currencies Falling Against U.S. Dollar

At the end of January, the main currencies in the region continued their devaluation against the U.S. dollar, with the Argentine peso losing around 19% of its value, while the Colombian peso lost more than 17% when pegged to the U.S. currency. By mid-March, the Brazilian real had fallen more than 14% against the U.S. dollar during this year, and the Mexican peso fell to levels not seen since 1993.

 

Argentina, Venezuela Show Most Currency Exchange Volatility

Latin Trade's Latin American Currency Volatility Index, calculated by factoring in the exchange rates (monthly averages) of Latin America's major currencies against the U.S. dollar from their starting points on January 31, 2010, has reached its highest levels in 15 years. This reflects  the risk posed by regional players and international companies with exposure to these countries.

 

Argentina and Venezuela remain the countries with the most volatility related to their currency exchange, while the region's biggest economy, Brazil, is also notable for the real's ups and downs, which are making it difficult for its central bank to tame inflation.

 

Some Stabilization Relative to January 2014

Looking at the same index, but factoring in the exchange rates of the region's major currencies against the U.S. dollar starting January 31, 2014, there is some stabilization. That said, according to the latest survey published by Bank of America Merrill Lynch, investors seem to have become increasingly more bearish on Emerging Markets currencies.

The consensus is that the U.S. dollar will continue to gain against other currencies, as 92% of survey participants expect the currency to appreciate this year, with more than half expecting a 5% to 10% appreciation.

 

Expect Increased Volatility if U.S. Dollar Continues to Gain

If the dollar continues to gain, expect increased volatility for some Latin American countries, since fiscal challenges in the region, mixed with slow growth and rising rates in the U.S., could pose significant challenges to overcome.

 

LatinTrade.com subscribers: Click to read the full article and download the entire Latin Trade Currency Volatility Index.


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Best of Travel: Share Your Picks

Help Latin Business Traveler and Latin Trade choose the Best of Travel 2015. This month, we're asking our readers about general bests in the region. Next month, we'll ask about your favorites in specific cities.

Click to email and share your opinions on any of the following - or other important "bests" that we haven't asked about:

 

GENERAL:

  • Best Convention Center in Latin America
  • Most accepted Credit Card
  • Best mobile communications provider
  • Best mobile hardware for business travel
  • Best regional travel agency
  • Best travel Internet engine/solution
  • Best travel insurance service
  • Best airport in the region

HOTELS:

  • Most impressive hotel expansion in Latin America
  • Best loyalty program
  • Best hotel app
  • Best Website
  • Brand to watch

AIRLINES:

  • Most improved in Latin America
  • Best loyalty program
  • Best overall route network
  • Most impressive airline expansion
  • Best global alliance/partnerships
  • Best food and beverage
  • Best airline app

RENTAL CARS:

  • Best overall in Latin America
  • Best pan-Latin presence
  • Rental car company on the rise
  • Best luxury/exotic car option
  • Best VIP/loyalty program

 

 

Travel News

Entry/Exit Requirements

The Mexican peso fell to a record low, depreciating 0.6% to 15.5672 per dollar on March 9.

 

Security and Safety Updates

After a March 10 earthquake in Colombia, the there are warnings against all travel to the ports of Buenaventura and Tumaco, and against all non-essential travel to the departments of Putumayo, Arauca, Cauca, Caquetá, Guaviare, Guainía, Vichada and Norte de Santander as well as Choco, Narino, Meta, La Guajira, Cesar and Boyaca.

 

New Airline Routes and Route Changes

South America

Azul will launch three daily flights between Brazil's Belo Horizonte/Pampulha and Vitoria airports on April 1.

 

Addis Ababa Bole International Airport

Ethiopian Airlines will begin nonstop service between Addis Ababa Bole International Airport in Ethiopia and Sao Paulo Guarulhos International Airport on April 25.

 

Azul will expand service between Sao Paulo Viracopos/Campinas airport and Fort Lauderdale-Hollywood International Airport (Miami area, Florida) from seven weekly flights to 10 beginning April 27.

 

Mexico and Central America

United Airlines will begin once-a-week service between New Orleans (Louisiana) International Airport and Cancún International Airport on May 9.

 

Vacation Express will launch seasonal nonstop service between Birmingham-Shuttlesworth International Airport in Alabama (U.S.) and Cancun International Airport from May 20 through August 2.

 

Caribbean

Seaborne Airlines will add nonstop service between San Juan Luis Muñoz Marín International Airportin San Juan, Puerto Rico and Anguilla's Clayton J. Lloyd International airport on April 30.

 

Sunwing will offer weekly summer flights between Alberta, Canada's Edmonton International Airport and Cayo Coco, Cuba; Grand Bahama Island; and Los Cabos, Mexico.

 

International Connections

South African Airways has resumed nonstop daily service between O. R. Tambo International Airport in Johannesburg, South Africa and New York-John F. Kennedy International Airport.

 

Philippine Airlines has resumed service between the Philippines'' Manila International Airport and New York-JFK. The flights will run four times per week via Vancouver, British Colombia, Canada.

 

QATAR Airways will increase capacity on its five weekly flights between Hamad International Airport in Doha and Miami International Airport by introducing the Boeing 777-300ER into operation as of May 2. Service will increase to daily flights on November 18.

 

Air China will begin nonstop service between Los Angeles International Airport (California, U.S.) and Beijing Capital International Airport on May 2. The flights will run four times per week through July 1, after which they will increase to daily service.

 

Airline Alliance News

Turkish Airlines and Azerbaijan Airlines will begin codeshare service between Turkey and Azerbaijan.

 

United Arab Emirates-based Etihad and Malaysia Airlines expanded their codeshare, adding six domestic routes with the Etihad code out of Kuala Lumpur.

 

KLM and WestJet will expand their codeshare, adding five new flights out of Edmonton, Alberta, Canada on May 5.

 

QATAR Airways and JAL (Japan Airlines) will expand their codeshare, placing the QR code on 28 routes out of Tokyo Haneda airport.

 

Virgin America

Other Airline News

Virgin America has announced it will match rival prices on nonstop fares to Dallas Love Field (Texas, U.S.) and will offer a 2-for-1 deal for travelers to the airport who refer three friends to Virgin's Elevate program.

 

Airport News

Houston's Hobby Airport welcomed its first international flight since the 1960s on March 7, when a Southwest Airlines flight from Aruba touched down on the runway. The airport has plans to serve cities in Mexico, the Caribbean, Central and South America.

 

Castellón-Costa Airport in Castellon, Spain will see regular flights for the first time since it opened in 2011, via European discount airline Ryanair.

 

Loyalty Program News

American Airlines will consolidate the US Airways Dividend Miles program into the AAdvantage program by April 15.

 

AAdvantage members can earn quadruple miles through August 31 for car rentals of one to four days and sextuple miles for rentals of five days or more on qualifying Hertz rentals in the U.S., Puerto Rico, Mexico, Canada and a number of countries in Europe.

 

Delta will update its SkyMiles program to include 10,000-mile one-way award travel to select U.S., Mexican and Caribbean markets; the awarding of elite-qualifying miles for flights on partner airlines since January 1, 2015; and the addition of China Eastern, China Southern, China Airlines and Gol to the list of airlines that can be booked online for award travel.

 

Alaska Air has discounted select award travel,with the redemption required for shorter flights going down by 60% and redemption for longer flights down 40% between April 21 and June 11 (blackout dates May 21-25).

 

Between now and May 15, Alaska Airline Mileage Plan members can earn double miles on select flights out of the U.S. cities of Salt Lake City, Utah and Seattle, Washington.

 

United has announced plans to upgrade all 49 United Club lounges to include new complimentary food offerings, facility renovations and a new training program for lounge staff.

 

Sonesta Hotel San Antonio

Hotel News

The Sonesta Hotel San Antonio opened in Chile in the heart of the coastal area. The 70-room hotel is divided into Standard, Executive and Jr. Suite accommodations and has 3,500 square feet of meeting space, a full-service business center and easy access to cultural destinations, Valparaiso and Santiago.

 

Circa 39 reopened in Miami Beach after undergoing a two-year, multi-million dollar renovation to guest rooms, lobby areas, on-site dining and pool deck.

 

Ground Transportation Services

Rental Car companies including Hertz, Budget, National and Avis are offering seasonal one-way rental rates out of Florida for as little as $10 per day.

 

Travel Services

Trippeo, a web-based travel expense application, recently launched. Using the app, business travelers can sync their calendar to get automatic flight and hotel suggestions as well as automatic expense tracking via a link to a specified credit card. The app can also track miles for gas expenses, as well as allows users to snap and annotate images of receipts.

 

Apple watch users will be able to access the Starwood SPG app, a Marriott app that allows Apple Pay at 11 properties, services from Uber and Accorhotels and mobile boarding passes for many airlines.

 

MEDIGO launched as a medical tourism search feature, working with internationally accredited hospitals to give users free access to clinics around the world. Clinics are searchable by price and reviews; users can message clinics directly through the website for more information and share health records securely over the system. Once chosen, the clinics will help facilitate travel arrangements.

 

Entry/Exit Requirements

Departure tax is now included in the cost of airline tickets to St. Kitts and Nevis.

 

Addis Ababa Bole International Airport by Vob08 via Wikimedia Commons; Virgin America by airlines470; Sonesta Hotel San Antonio, courtesy of Sonesta Hotel San Antonio

 
Latin Business Traveler

 Resources from Latin Trade Group  

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