Tourism and insecurity, where are we standing?

Published in Plaza de Armas, newspaper from Queretaro, March 7^th 2011

During the recent weeks, a lot has been said about the numbers announced by the Ministry of Tourism referring to the increase on international tourism in the country during 2010. There is a lot of incredulity because there are many cities where the arrival of tourists has dramatically decreased due to insecurity problems.

Are the numbers unreal? Let’s analyze the situation of this important sector that represents 9% of the country’s GDP and more than 2 million direct jobs.

First, a clarification of terms. International travelers are foreign people that get into the country, no matter if they stay for a few hours or if they stay the night. Mexican Central Bank (BANXICO) records all those visits, meanwhile Tourism focuses only on the people that stay the night in the country, since they receive the definition of tourists.

This difference is important, especially on the borders where there is a very important flow of travelers that don’t stay the night, and therefore, they are not tourists.

BANXICO reports a fall in the total number of travelers in 2010, precisely because the border travelers that don’t stay the night had a significant decrease (7.8 million less than in 2009).

The groups considered as tourists (border travelers that stay the night and those that get beyond the borders) increased from 21.5 to 22.4 million. This confirms the increasing trend announced by Tourism, with a little different numbers (Tourism announced that they were 22.6 million). A 4.4% increase will always be good news, but we are just reaching 2008 levels.

Then, how is insecurity affecting tourism? Let’s see some data that can give us more clarity.

First result: world tourism increased 6.7% in 2010. Mexico is growing slower, therefore we had a relative decrease that makes us stay with a smaller piece of the world pie.

Second result: the country stopped receiving $230 million dollars on the border zone this year due to the fall of travelers. Besides, many hotels on different cities on the north zone reported occupancy levels of 40% during 2010, against 70% in 2009.

Third result: 3 cruises lines recently announced a reduction or elimination of their travels to Mexico. This sector, classified also as travelers and not as tourists, had an increase in 2010 and represents 8% of international travelers and 5% of foreign currency inflows.

Fourth result: United States, that represents 40% of foreign tourism in Mexico, has traveling alerts for half of the country’s states. This is a big red alert (fortunately, Queretaro is not on that list).

Are there good news? Yes. For instance, foreign currency inflows increased 5% in 2010 (every traveler and tourist spent more money on average). Also, the big national centers for international tourism (Cancun, Mayan Riviera, Cabos) are still outside the alert zones for the United States.

Although the perspectives were positive at the end of 2010, we can’t overlook current risks. We still may have an increase in the number of tourist in 2011 as a consequence of the world dynamic in this sector, but if we don’t have positive changes in the short term, the growing rate will be lower again, and tourists will concentrate more in a few destinations, that are already the ones more visited, at expense of the rest of the country.

	2007	2008	2009	2010	2011 (estimated on Dec. 2010)
International tourists (million)	21.4	22.6	21.5	22.4	22.6 Tourist National Confederation
					26.0 Ministry of Tourism

2007 to 2010 are data from BANXICO

Tourism in Mexico in an uptrend

Tourism private organizations estimate that Mexico received 22.5 million foreign tourists in 2010. This represents a 4.6% improvement against 2009, and places the country near its peak in 2008 (22.6 million tourists).

These figures appear to be against the common assumption that insecurity is affecting this important economic activity for the country (according to the Ministry of Tourism, it holds for 7.5 million employments). What statistics show is that the effect of insecurity reflects on the destinations chosen by foreign visits. The 12 main destinations for foreign tourists according to hotel occupancy concentrate more of the national share this year (from 48% in 2009 to 50% in 2010).

More good news are that foreign tourists increased their per capita spending, being $450.80 USD, 2.5% more than last year.

Regarding local tourism, there are no precise figures of its volume. Some estimates are that it is around 5 to 7 times bigger than foreign tourists. Except for Mexico City, their main destinations are clearly different (Acapulco and Guadalajara for local tourism, and Cancun and Mayan Riviera for foreign tourists). Insecurity may appear to have the same effect, not to diminish local tourism, but to change its destinations. For example, Monterrey’s hotel occupancy dropped down 12% on 2010, and some estimates are that North and Northeast had a 30% decrease on its occupancy.

For 2011 there are positive perspectives, with big differences between private and public estimates.

	Millions of foreign tourists	Millions of USD
Touristic national confederation	22.6	$12,600
Ministry of Tourism	26	$15,500

It will be important to keep an eye on how the mix of destinations may change due to insecurity, and consider how the Panamerican Games in Guadalajara may influence this activity; however, it seems that tourism will finally recover the levels of 2008.