| | |  Business News | June 2009 
Cancun’s Swine Flu-Idled Workers Miss Free-Spending Tourists
 Thomas Black - Bloomberg
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 |  | Mexico’s foreign tourism revenue may fall by $4.5 billion this year because of the flu epidemic and global recession.
- Rodolfo Elizondo |  | | |
Tourists scared away by swine flu are back on the beaches at Mexican resorts, led by bargain- hunting locals snapping up offers for half-price hotel rooms and $1.25 beer.
“People are returning, yes, but they don’t spend much money,” said Monica Pedroza, whose business braiding hair in Cancun for $20 a head has dropped to one customer a day from five. “Everybody wants a discount.”
Cancun, Cozumel, Los Cabos and other destinations have seen few foreign tourists since the swine flu outbreak that began in April and has killed 108 people in Mexico, the Health Ministry said. To fend off unemployment, the government rolled out a $91 million campaign urging Mexicans to vacation at home and encouraging hotels and restaurants to cut prices.
Some waiters, bartenders and hotel clerks who took unpaid leave last month say they’re making less money back on the job with fewer visitors from abroad. The government also needs those tourists, as its third-biggest source of foreign currency.
“They’re offering packages so cheap that it’s attracting a different kind of tourist,” said Marisol Mercado, 39, purchasing manager for 23 Mexican souvenir stores. “The locals don’t buy like the foreigners.”
Cancun’s hotel occupancy plunged as low as 20 percent in May, when 13 inns with 5,200 rooms shut down. It rebounded to 45 percent in the first week of June and is forecast to reach 60 percent next month, said Rodrigo de la Pena, president of the Cancun Hotel Association. That’s still down from 80 percent last July.
“We’re recovering quicker than we thought,” de la Pena said. “The hotels have almost all their workforce back and tourists are arriving.”
First Cancun Visit
Josefa Olvera opted to vacation in Cancun for the first time instead of going to Huatulco, Oaxaca, the beach closest to her home. The 2-for-1 promotion at the Hotel Fiesta Americana Villas Cancun allowed her to invite her mother for the week for 7,000 pesos ($515), said Olvera, one of few tourists occupying green lounge chairs at the hotel’s beach.
“There are a lot of promotions to visit Cancun,” said Olvera, 32, a lawyer in Tuxtla Gutierrez for the Chiapas state attorney general’s office. “There’s not many people, and you can enjoy everything more.”
Tips for Fredy Moo-Pool, 25, a waiter at Carlos’n Charlie’s restaurant in Cancun, plummeted as low as 150 pesos a shift from 700 pesos on an average day and as much as 1,200 on crowded weekends.
“It has picked up some, but not like it was,” he said.
Cruise Ships Return
Cruise ships returned to Cozumel at the end of May after almost a month. Tourism workers had to dip into savings or head back to their hometowns to wait out their absence, said Luis Cruz, 47, a waiter at the Plaza Leza restaurant.
“The tips have dropped to nothing,” said Cruz, who used to get about 300 pesos in tips on an average day and more on weekends. “I’m getting 50 pesos, maybe.”
David Ramirez is keeping his Cancun souvenir store open until 9 p.m. again after “just terrible” sales forced him to keep shorter hours last month and put one of his two workers on furlough.
“There are more customers, but they’re not buying as much,” said Ramirez, 50, standing by duffel bags with Corona beer logos, stacked on the sidewalk under leather sandals hanging in front of his shop.
Foreign tourists spent $13.3 billion in Mexico last year, about 1.5 percent of the $900 billion economy, said Salvador Moreno, an economist with the Mexican unit of ING Groep NV. It’s the biggest source of foreign currency after oil and remittances from citizens living abroad.
Pinched by Recession
International tourism already was in decline because of the global recession, before the swine flu outbreak was disclosed April 23. Foreign visitors spent $3.62 billion in Mexico in the first quarter, an 8.8 percent drop from a year earlier.
Mexico’s foreign tourism revenue may fall by $4.5 billion this year because of the flu epidemic and global recession, Rodolfo Elizondo, tourism minister, said in an interview last month.
Airport operators Grupo Aeroportuario del Sureste SAB and Grupo Aeroportuario del Pacifico SAB, the most actively traded Mexican stocks linked to tourism, have risen in the past three weeks on expectation of a pickup in both domestic and foreign passengers.
Share Performance
Grupo Aeroportuario del Sureste, which operates nine airports, said passengers to Cancun plummeted 63 percent in May. Its shares fell 17 percent to 38.74 pesos in the three weeks after the government announced the outbreak of swine flu. The stock has rebounded to 51.32 pesos.
Since April 23, Grupo Aeroportuario del Pacifico, which operates airports in Puerto Vallarta and Los Cabos, has dropped 2.4 percent to 28.67 pesos.
The beauty of Cancun and Cozumel’s jade-green ocean and sugar-white beaches will lure foreigners back even with the recession and threat of swine flu, said de la Pena of Cancun’s hotel association.
Kelly Deveau, 47, an executive assistant with the Bell Aliant unit of BCE Inc. in Halifax, Nova Scotia, said she wasn’t concerned about contracting swine flu during her cruise ship’s stopover in Cozumel.
“I believe the health authorities have it well taken care off,” said Deveau, who was given a brief health check before boarding the 15-deck ship.
To contact the reporter on this story: Thomas Black in Cozumel at tblack(at)bloomberg.net. |
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