Tourism in Mexico: a wasted opportunity

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On May 6th, and with the attendance of President Enrique Peña Nieto, the 39th Tourism Expo was inaugurated in Cancún. This event has the purpose of promoting and commercializing tourist destinations, products and services that Mexico has to offer. The Expo intends to form business links between the sector’s suppliers and potential investors from around the world. However, despite this type of activities and beyond the political discourse, it is necessary to point out that tourism has had a lesser impact in the economic growth than previously expected. For instance, between 1999 and 2009, the temporary accommodation services in the country were increased by the economic unit of almost one more employee; however, labor productivity decreased by 2 percent. Likewise, a worrying case is Quintana Roo – a state with one of the highest tourist potential – where it had almost 7 more employees as economic units, but presented a 24 percent decrease of labor productivity. In other words, Quintana Roo, as many states before, increased employment inefficiently and unproductively during the past decade. All of the aforementioned leaves Mexico into a weaker condition when compared with the U.S. and Europe. What can be done to exploit the gigantic potential of the country in the tourism sector?
There are several tourism problems in the country. At least four come to mind: (1) the inability to counter the negative perception of the country due to the insecurity (thereby, affecting promotion); (2) the focus on only one type of tourist destination and tourism kind (overlooking market opportunities); (3) a poor reordering and sector transformation and (4) the amount of corruption and increasing lack of transparency in public expenditures – particularly regarding construction permits. Despite all of this, 2013 the tourism balance led a profit of 4.76 billion dollars, while the expenses of foreign visitors attracted 11.71 billion dollars (almost 500 dollars per tourist). In addition, although it remains the least developed area in the country, the three states in the Yucatán peninsula, along with Chiapas, Guerrero and Oaxaca received 27 percent of the tourists that stayed in the country in 2012. This high touristic demand can be explained due to the multiple “sunshine and beaches” destinations. It should be mentioned that the weekly hotel occupancy rate (as of the first half of April 2014) on beaches was 68 percent, higher than the 58.3 percent in the national aggregate. This implies that boosting tourism represents a development opportunity for states with a relative weak industry (as are the cases in southern Mexico). These states lack competitive advantages in the manufacturing sector and a limited development of their human capital, which is why the promises of development in the secondary sectors remain an illusion, at least in the short term. However, opportunities are to be found somewhere else.
Firstly, there is a need for stronger policies that aim for a productivity reconversion. On that regard, the National Tourism Policy has established the “Sectorial Planning and Transformation” as its first guideline. More than a bureaucratic reconversion or a transition towards new types of tourism, reconversion implies designing policies with incentives to migrate workers from low productivity sectors – such as the retail trade – to jobs in the tourism sector (considering a dynamic sector that will provide such jobs). Secondly, there is a need for strengthening the accommodation capacity in the “sunshine and beaches” destinations by introducing touristic sub-products and new infrastructure for connectivity and transportation – such as the expansion of airline routes, ever since Mexico City remains the largest interconnection point. As the consulting firm Mckinsey has argued, the creation of “destination themes” in order to form “Unique Selling Points”. For instance, despite the creation of the program “Colonial Treasures” – whose target is to show the touristic offering of eight states in central Mexico with Colonial cities -, Durango remains relatively disconnected given a limited road infrastructure as well as the insecurity that exists in current roads. This is only a way to show how tourism has been overlooked in cities throughout Mexico as well as the so-called “magical towns”, which had a mere 47 and 32 percent occupancy rate in 2013, respectively.
In an increasingly competitive world, where visitors seek more than a place that has more to offer than “sunshine and beaches”, it is essential to enhance and promote ecotourism, cultural, health, business and luxury types of tourism. An efficient boost for the sector can increase the income, both in the short and medium term, of an area that is the most economically disadvantaged but richest in natural resources in all of Mexico.


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