Tourism in Mexico

The impact of COVID-19 on tourism

Close to 10% of Mexico's GDP is handed over by tourists. This has left the country between a rock and a hard place, determined to avoid a third wave of the pandemic, while whole communities are desperate to welcome in those prepared to venture abroad.

The impact of COVID-19 has been so monumental as to prompt talk of a societal reset. Time alone will reveal the longevity of the so-called the “new normal.” Some sectors have experienced a boom. Telcos have seen record profits, as have those online services that piggyback on digital platforms.

This, clearly, was not the case for the tourism industry. Tourism accounts for a vital 9% of national GDP.

Yet, for some areas of the country, that figure is around 10 times higher. For example, the city of Quintana Roo’s 6 million visitors of 2019 had halved in 2020, although officials forecast 5 million for 2021. Clearly though, the impact on the local economy has been comprehensive.

The numbers

Mexico’s pandemic experience is grim, registering the world’s fourth-highest death toll, when in March 2021, the government confirmed a death toll far higher than previously believed. Mexico has turned to multiple sources to fuel its vaccination drive but has yet to achieve President Andrés Manuel López Obrador’s goal of 200,000-300,000 injections per day, with around 6 million shots in total having been given as of late March.

Setting accountability

One link in Mexico’s tourism value chain is Guanajuato State.

In a TBY interview, Secretary of Tourism Juan José Alvarez explained a step taken ahead of the pandemic and some crucial ones taken once it struck. Back in 2012, “the congress of Guanajuato approved the tourism law, which includes the installation of an advisory board formed by the public and private sector. […] Guanajuato is the only state in Mexico with a tourism observatory that has been strengthened and upgraded.”

Moreover, sector training on health and safety supported by a vigorous digital strategy has resulted in the state being the first in the country to receive the WTTC Safe Travel certificate.

Turning to Baja California Sur, Secretariat of Tourism Luis Humberto Araiza López confirmed to TBY that tourism accounts for two-thirds of GDP, whereby travel restrictions cost MXN30 billion and 22,000 jobs.

Since the lockdown of April, May, and June, the authorities have ensured that all tourism activity carries a protocol of safe operation. In consequence of this, the World Travel & Tourism Council (WTTC) has granted a safe seal of travel, making Baja California Sur the “first destination in the Pacific to receive this seal from the WTTC [whereby] we are allowed to have 50% capacity in commercial businesses, hotels, and restaurants.”

Meanwhile, with more people today favoring less populated destinations, Baja California Sur boasts among the lowest population density in Mexico.

Early to the party?

Spring break is a well-established rite of passage with many US teens, with Mexico a notable part of the equation. Add to that the proximity to the US and the ban on international travel, and it becomes an obvious choice for those insistent on a foreign getaway.

Indeed, in March, Mexico was inundated to the point of growing concerns over a possible third wave, the fear being that the dollar would prevail over precaution. Indeed, there has been some regrettable evidence of this, as reportedly certain tourists’ negative COVID-19 results before coming to Mexico had been falsified, with some testing positive upon their return home.

Overall, Mexican hotels have largely been operating at reduced capacity. Mexico has also introduced a four-stage stoplight system where colors indicate safety levels, determining which facilities can and cannot be opened.

What’s on the cards for the coming year?

Official figures show that in 2020, Mexico received 23.3 million international tourists, a leaden 50% YoY drop. Mexico was late to the table in imposing restrictions during the pandemic.

Yet, having got its act together subsequently to international recognition, barring any unforeseen twists to the already sorry tale of COVID-19, this year Mexico stands to be the largest host of international tourism after Italy and France.

The Ministry of Tourism (SECTUR) in late 2020 issued a realistic range of expectations. Accordingly, international arrivals could reach 42.7 million, up 65% YoY just shy of 2019’s 44.7 million. The conservative and pessimistic forecasts put the number at 34.5 million (up 33% YoY) and 26.3 million (up 1.6% YoY).

In the same three scenarios, tourist spend is optimistically forecast at USD17.4 billion, a more conservative USD15.6 billion and a pessimistic USD13.1 billion. With the pandemic still very much with us, as we said before, only time will reveal all.