LATAM e-News – September 2017
Arturo García Rosa
President & Founder, SAHIC
SAHIC in hurricane season
Just one week before the tenth edition of SAHIC South America – for the second time in Buenos Aires since its first conference – one can see the industry’s renewed interest in meeting once again, as every year, on the occasion of this annual meeting, a classic already.
The subprime “hurricane”.
A lot of expectation has accumulated since the first edition of SAHIC was announced at the beginning of 2008. What no one could guess is that the well-known real estate bubble that began to be timidly known by 2005 will crash as it did on September 15 2008 when Lehman Brothers, founded in 1850, filed its formal bankruptcy filing.
Even earlier, in July 2008, the US Federal Reserve had been forced to rescue two of America’s top mortgage lenders, Fanny Mae and Freddie Mac.
The mentioned real estate bubble appeared as an inexorable reality and the so-called sub-prime crisis hit the US economy hard, because of the high-risk loans that had spread out hugely.
A series of events followed, all within a growing framework of despair to the point that the then-President George W. Bush came to realize that the United States was on the verge of financial panic and of a recession that put the country in a similar or worst situation than the famous crisis of 1929, the “Great Depression”, whose consequences extended until the end of the 30s. This could be defined as a “great hurricane”, by that time undoubtedly a grade 5 hurricane.
The first edition of SAHIC in Buenos Aires
Within this context, the final preparations for the opening of the first SAHIC edition- at that time: South American Hotel & Tourism Investment Conference- were taking place.
President Bush along with his cabinet, leading advisers and allies worked hard to seek a palliative to what appeared as the beginning of total collapse. For days they negotiated a rescue plan that was finally presented to Congress for approval on September 29, 2008. The plan was rejected the same day causing a stock market crash, the biggest crash of the last 20 years.
Under those circumstances, in the worst of scenarios, we inaugurated the first edition of SAHIC that same 29 of September.
Endurance and Survival Instinct
It is no secret that the human being has the capacity to overcome crisis, to fight, to bend their efforts, to renew their dreams and to go for them.
That was no exception.
The tenth edition of SAHIC South America
Buenos Aires was followed by Rio de Janeiro, Cartagena, Santiago de Chile, Lima (twice), Quito, Bogotá, Guayaquil, and now is back again in Buenos Aires.
Meanwhile, the first sign of growth, not without hard work and effort, but especially with the understanding and support of many people, last May, the first edition of SAHIC Cuba took place, the first event of investments in hotels and tourism in the largest island in the Caribbean.
As in 2008, there were high expectations for returning to Argentina, even in the context of understandable uncertainties. But as a reminder of the stinging experienced on the occasion of that first edition, in late August we got to know of the creation of the second hurricane this season, after the recent destruction caused by Harvey that mainly hit the state of Texas.
“Irma,” a giant hurricane, perhaps “the father of all hurricanes”
A few days ago it was confirmed that that storm that originated a week ago near Cabo Verde Islands had become a grade 5 hurricane, with winds of the order of 300 km per hour. A hurricane that announces itself as one of the most, or the most dramatic hurricane known so far.
At the time of writing these lines, Wednesday, September 6 at 6pm ET, we are informed that Irma has changed course and is heading straight to Miami Beach.
At this time it has begun to cause the first damages and it is sadly expected through Puerto Rico, Dominican Republic, Haiti and Cuba, among other destinations in the Caribbean.
The irritation of comparing facts of different kinds. Totally different kinds?
Comparing this real hurricane with that financial crisis may be a bit irritating. Irma’s capacity for damage, including the missing and dead that the storm will very unfortunately bring, not to mention the tremendous damage to personal property, infrastructure works and other non-minor consequences, is far more concrete to people, with a much more direct impact than that of the consequences of the above called “subprime hurricane”.
Apart from the differences that each of us, and specially affected people, can assess in the impact of the damages of one and the other, there are some similarities.
Both cause a lot of grief and great uncertainty about what will come.
We still have to know if there are no similarities in the fact that both could have been prevented or at least mitigated by decisions that are in our hands, or at least, are in the hands of a good few.
See you next week in Buenos Aires.