Mr Americana, Overpasses News Desk
October 31st, 2017
Cancun, Mexico is the Spring Break capitol of the world, but the capital that usually comes pouring in from tourism is seeing a dramatic drop due to rampant cartel violence.
While Cancun has suffered a 10% drop in hotel occupancy this year alone. Meanwhile, in Los Cabos, on the tip of the Baja California peninsula, it’s far worse.
The airport serving Cabo San Lucas and its lesser-known sister city, San Jose del Cabo, is looking something like a ghost town these days. Tourists have canceled at least 35,000 hotel bookings for the next year reports the Houston Chronicle.
Normally the weaker peso would have American tourists pouring across the border for fun on the cheap,, many are staying away, spooked by a wave of violence that’s come dangerously close to tourist hot spots. Gunmen opened fire at a Cancun nightclub in November, and a cooler with two human heads was found on Cabo San Lucas’s main hotel strip in June.
The tourism industry suffered a crushing blow on Aug 22nd, when a travel warning by the U.S. State Dept warned tourists to avoid the area completely.
“Group tourism automatically went down the moment the warning hit,” said Carlos Gosselin, head of the hotel association for Cancun and Puerto Morelos. Many insurance companies likely won’t even consider offering coverage in areas under advisory, hurting conventions and events in the area, he said.
Desperate to get the State Dept to revise its warning, Mexico is scrambling to reinforce security in popular tourist destinations and companies including Hilton Worldwide and Marriott International are spending millions to make guests feel safer.
Their motivation is clear: Barclays estimates that a drop in tourism could wipe out as much as 0.5 percentage point from Mexico’s gross domestic product growth this year.
“Lower tourism activity will definitely have an impact on growth,” said Marco Oviedo, head of Latin America economic research at Barclays. “External tourism is one of the most important sources of income in the current account.”
With murders skyrocketing in Los Cabos and Cancun this year, $20 billion in tourist revenue is at risk, especially due to the fact that a full third of all the nation’s international tourists visit the region.
In Los Cabos, local and federal authorities are teaming up with hotels, time-share companies and the airport operator to step up the area’s security.
The group is spending $50 million to increase surveillance cameras to cover the 20-mile main stretch that includes hotels, restaurants and public beaches. A new military facility, paid for in part by the private sector, will be built near a highway to respond to any activity spotted on the cameras. It is set to open in the second quarter of 2018.
“We understand and appreciate that travelers are more concerned than ever about their safety and security and we have rigorous security procedures in place at all of our hotels in Mexico,” Marriott said in an emailed response to questions. “Mexico continues to be a desirable destination for visitors from around the world and we’ve had very few cancellations for Holiday season due to this matter.”
But the slowdown in Los Cabos since the travel warning is starting to show in other areas.
International passenger arrivals dropped 2 percent in September, the first decline in three years, and compares with a 20 percent average gain for most of this year, according to airport operator Grupo Aeroportuario del Pacifico SAB and the Los Cabos Tourism Board. Other factors such as hurricanes and earthquakes in recent months contributed, said Rodrigo Esponda, managing director of the tourism board.
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