Tourism in Uruguay generated an estimated US$300 million in 1989, equivalent to 22 percent of merchandise exports. The tourist industry depended mainly on visitors from Argentina. Thus, not only were tourist receipts seasonal (peaking in the warm summer months, January through March), they also fluctuated along with economic conditions in Argentina and relative exchange rates. In 1989 about 85 percent of the 1 million tourists were from Argentina; an additional 10 percent were from Brazil, and smaller percentages came from Paraguay and Chile. Many of the visitors from Argentina owned property in Uruguay, especially in the resort area of Punta del Este, which drew half of all summer tourists.
In 1986 the Sanguinetti government created the Ministry of Tourism to regulate hotel and resort prices and to promote Uruguayan tourist attractions at international exhibitions. The ministry also developed programs aimed at attracting visitors and conventions to Uruguay during the low season, but with limited success. At the same time, the government supported the improvement of hotels, marinas, and camping facilities. To protect the beaches, a key tourist attraction, the Montevideo sewage system was being upgraded in 1990 so that it would discharge more than two kilometers offshore. Despite such efforts, tourism was expected to remain mostly regional because of the long distance from Europe and the United States, lack of services (Uruguay had no five-star hotels), lack of promotion, and restrictive transportation policies (for example, charter flights were difficult to get).
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