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Mexico 2014 | TOURISM | REVIEW: TOURISM

While more tourists are visiting Mexico in 2014 than ever before, the real story is a multiplicity of institutional and infrastructural developments that are being implemented to ensure that Mexico's success is lasting.

Tourists of all stripes poured into Mexico over the year, prompting Secretary of Tourism Claudia Ruiz Massieu to predict double-digit growth during a press conference held in May 2014. Secretary Massieu pointed out that while international US travel increased by 6%, the rate of Americans arriving in Mexico had risen by 15.6% over the same time period in 2013. Three months later, numbers released by the Bank of Mexico revealed a 19.6% increase in international tourists over the same period in 2013. Driven by a relentless influx of Americans fleeing an unusually brutal winter, Mexico's tourism industry hauled in $8.4 billion over 1H2014, a 17.6% increase in YoY terms thanks to the arrival of 14.2 million vacationers. Tourists arriving in 2014 also had more liberal spending habits, with per-capita spending rising 9.5% to $944.5, compared to the average of $862.9 for January-June 2013. The first half of 2014 also saw a 10.7% uptick in overall international arrivals, putting the total at 8.8 million. Mexico's impressive numbers run the risk of overshadowing the real story, which is the diversity of infrastructural and institutional developments taking place around the country, which will ensure that the numbers for 2014 are part of a long-term trend in growth and development.

THE SMART MONEY

In July 2014, the Secretariat of Tourism and the Inter-American Entertainment Corporation announced plans to host the 2015 FIA Formula One World Championship. In addition to enhancing Mexico's international profile with motor sports aficionados, the races are expected to bring in up to $2 billion with organizers hoping for 180,000 to attend over the three-day event. Mexico's hospitality business is also revving its engines. After less than $100 million in hotel transactions in 2009, the figure topped $600 million in 2013. According to property consultancy firm JLL, hotel acquisitions in 2014 are forecast to rise by another 15% to over $700 million, making it the highest annual transaction volume on record. In July 2013, Starwood Hotels & Resorts announced plans to expand its Mexico portfolio by 30%, emphasizing the country's role in its Latin American growth strategy. Even noted philanthropist and billionaire Bill Gates got in on the action with his purchase of the Four Seasons Punta Mita Resort for $200 million.

BACK IN BUSINESS

Passengers of cruise ships represent another important share of Mexico's tourism industry. After meeting with heads of major cruise operators in March 2014, Secretary Massieu predicted growth of up to 20% in 2014. This is due in large part to aggressive measures by local governments to ensure the comfort and security of visitors. In 2011, reports of rising crime and economic downturn caused five cruise lines to pull out of Mazatlán, on Mexico's western coast. Local leaders responded decisively, and reduced crime rates by 90% over the next two years. By 2013, a total of 300,000 passengers had returned to Mazatlán. Now five lines—Princess Cruises, Carnival Cruise Lines, Holland America, Norwegian Cruise Lines, and Azamara Club Cruises—have returned, bringing with them an estimated 200,000 passengers annually. Other Mexican ports are experiencing similar success through public-private cooperation. The port of Ensenada expects a 50% increase in arrivals, thanks to a new Carnival Cruise line stop that will disgorge up to 4,000 visitors on a bi-weekly basis.

ON THE ROAD

While the private sector steams ahead, Mexico's government is leaving nothing to chance. In addition to promoting Mexico as a world-class tourism destination, the government is working hard to direct tourism dollars to indigenous communities. Mexico was selected as the official partner country for the Internationale Tourismus-Börse (ITB), the world's largest travel trade show, which was held in Berlin in March 2014. The event attracted more than 10,000 exhibitors from nearly 200 countries and regions, and as official partner country, Mexico was able to leverage its role into a unique promotional opportunity. Mexico is also participating in similar publicity events in other countries across Europe, South America, and Asia. In June 2013, Secretary Massieu and her Spanish counterpart José Manuel Soria Lopez signed a cooperation agreement to promote environmentally friendly tourism between the two countries. Another agreement signed in July 2014 with Peru promised joint activities to develop the economic and tourism potential of the two countries.

Throughout 2014, state governments across Mexico combined forces with the Secretariat of Tourism to lure vacationers into areas of high indigenous populations. In spite of their proximity to natural and cultural assets, many of these regions remain underdeveloped; however, this is set to change. In June 2014, the secretariat announced almost $2 million in funding for 26 projects targeting indigenous communities. Another $1.5 million project announced in July 2014 aimed at building up the basic infrastructure, and providing nutritional programs and education to communities in Yucatan, Quintana Roo, and Campeche. According to the Secretariat of Tourism, which provides the funding, basic improvements are necessary in order to attract tourists. By building up communities, the government is making a long-term tourism investment.

GET ME A DOCTOR

With prohibitive medical costs to the north, and inferior services to the south, Mexico is quickly becoming a leading destination for medical tourism. Speaking with TBY, Monterrey Mayor Margarita Arellanes, explained that, “hospitals, in both the public and private sectors, have the latest technologies and some of the most talented professionals. Our proximity to the border with the US has attracted many citizens from Texas." To the west, Baja California is expecting huge demand for medical services by Americans as well. According to the Tourism Observatory of Baja California, during the winter of 2012-2013, Baja attracted 840,000 American visitors who arrived for health-related purposes. Many of these visitors crossed the border in order to buy prescription drugs at discount prices. The tourism secretary for the state of Baja California estimates that 500,000 medical tourists will avail themselves of actual medical or dental services in 2014 alone. In 2013, medical tourists in Baja California spent an estimated $89 million, and the state is working to develop this market through a $15 million advertising campaign that targets Latinos living in the US. Dentistry is also attracting tourism dollars as Americans opt for procedures south of the border that run at one-third the cost of US clinics. Mexican dentists are able to charge less because they are not saddled with the same student loans and high malpractice fees as their American counterparts.

SEEING GREEN

Ecologically minded holidaymakers now have more options in Mexico as the government and hospitality sector compete for a piece of the growing global eco-tourism market. In August 2014, FONATUR, the government agency responsible for the development and planning of tourist destinations in Mexico, signed an agreement to partner in developing world-class eco destinations with EarthCheck, the tourism industry's leading sustainability program. Mexico's Federal Agency for Environmental Protection (PROFEPA), and the Secretariat of Tourism have also rolled out the National Environmental Audit plan. The program is designed to promote sustainable development and environmental preservation in line with President Peña Nieto's plans for sustainable economic growth.

EYE TO THE FUTURE

The tourism industry in Mexico is already the nation's fifth largest source of revenue, but by 2018 it could move up to third place according to government officials. With over 7 million people employed in 2013, and more jobs being added every day, Mexico's leadership is not taking chances. And while security issues remain in some parts of the country, the upswing in tourism dollars is evidence that Mexico's cultural and physical assets factor most strongly in the minds of vacationers around the word.