Political Instability, Drug-Related Violence, Hurricane Wilma Hurt Mexican Tourism Industry in 2006

SourceMex Economic News & Analysis on Mexico, November 29, 2006 | Go to article overview

Political Instability, Drug-Related Violence, Hurricane Wilma Hurt Mexican Tourism Industry in 2006


Mexico's tourism industry suffered a downturn in 2006, in part because of concerns about drug-related violence and political instability at some of the country's more popular destinations and the lingering effects from Hurricane Wilma in 2005. In a report published in early November, the UN's World Tourism Organization (UNWTO) reported Mexico's tourism activity for the first eight months of the year was down about 3.8% from a year ago. This is in contrast to a 4.5% increase in tourism globally. Tourism activity was strong in other areas of Latin America in January-August, with Central America up 8.7%, the Caribbean increasing by 5.1%, and South America reporting growth of 8.1% relative to a year ago.

The Secretaria de Turismo (SECTUR) estimates that the number of foreign visitors to Mexico in January-August was down about 350,000 from the same period in 2005. Tourism Secretary Rodolfo Elizondo said security concerns--including political instability and drug-related violence--accounted for at least half of that decline.

Mexico received more than 22 million foreign visitors in 2005, resulting in US$12 billion in revenues. The industry's revenues for 2006 are projected at about US$10 billion.

Travelers warned not to visit Oaxaca

The UNWTO and SECTUR data were published before the US and some European governments issued travel warnings to their citizens to stay away from certain areas of Mexico because of political instability, particularly in the colonial city of Oaxaca. A coalition of civil organizations (Asamblea Popular de los Pueblos de Oaxaca, APPO) took over portions of the city to support demands by the local chapter of the teachers union (Sindicato Nacional de Trabajadores de la Educacion, SNTE) for higher salaries and the ouster of Oaxaca Gov. Ulises Ruiz (see SourceMex, 2006-08-02 and 2006-09-13). Federal law-enforcement personnel regained control of some areas taken over by APPO, but tensions remained high.

"US citizens should avoid any travel to Oaxaca City, and, if they must travel there, they should exercise extreme caution throughout the state of Oaxaca until the government of Mexico restores order to the area," US Ambassador Tony Garza said in a prepared statement in late October.

Garza's warning followed the murder of US journalist Brad Will, a documentary filmmaker for the media organization Indynews (see SourceMex, 2006-11-01).

The US warning elicited a response from President Vicente Fox's administration, which called the travel advisory exaggerated. "The presidency of Mexico contends that the city of Oaxaca is open to visitors," said presidential spokesperson Ruben Aguilar. "All its streets have free access, and department stores, movie theaters, banks, markets, and gas stations are open."

Aguilar went on to say, "We hope that the US government does not issue any more of these alerts."

Still, the conflict in Oaxaca has caused significant losses to the local tourism industry, prompting the government to approve new financial support. Magdalena Carral, director of the Consejo de Promocion Turistica de Mexico (CPTM), said her agency has allocated US$5 million for a campaign to promote tourism in Oaxaca.

Mexico City, another popular destination for US tourists, has also seen its share of political instability. In early November, several bomb blasts rocked the Mexican capital, targeting a commercial bank affiliated with Canada's Scotiabank, a branch of the popular retailer Sanborns, and the headquarters of the electoral tribunal (Tribunal Electoral del Poder Judical de la Federacion, TEPJF). A handful of leftist guerrilla groups took credit for the bombings and demanded the removal of Ruiz.

"This [incident] fuels the mood of uncertainty," analyst Sergio Aguayo said, "because it is another reminder that political conflict is evolving into social conflict."

The bombings were just the latest problem affecting Mexico City, which saw one of its major boulevards blocked by post-electoral protests during the summer. …

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