Mexico Tourism Report Q3 2009

Q109 Tourist Arrivals Post Minimal Growth Data released by the Ministry of Tourism (Sectur) shows that tourist arrivals grew in the first three months of 2009, to 6.02 million, up from 5.6 million in the same period the previous year. This represented a 7.5% growth y-o-y, impressive given that Easter this year fell in April rather than March.

This level of growth marks an acceleration from 2008, when arrivals increased by 5.9% y-o-y.

However, such positive Q1 growth is likely to reverse rapidly in the second quarter, with figures for April falling. This is due to the outbreak of swine flu in Mexico in late April, which led to the cancellation of many tourist charter flights and package holidays, as well as a brief shutdown of Mexico's key infrastructure. While the government has sought to downplay the outbreak, stressing the preventative measures in place, and the fact that the rate of infection had dropped by May, the damage done will be significant. Although the infection rate was highest in Mexico City, tour operators and cruise lines cancelled operations as far as the southern Yucatan region, indicating that all of Mexico will be hit hard.

Although the rate of infection has slowed, the damage to Mexico's tourist profile will act as a powerful deterrent to potential tourists, weighing on tourist arrivals in the short term.

Swine Flu Hits Mexico In late April an outbreak of swine flu (H1NI) hit Mexico, rapidly spreading to other countries across the world. The virus is an A/H1N1 strain of influenza, and can be fatal for humans. As of late May, there had been 2,895 confirmed cases in Mexico and 66 deaths. The US had 4,714 confirmed cases and four deaths, while Canada had 496 confirmed cases and one death. Other countries affected include Australia, Brazil, China, India, Israel, Japan, Spain and the UK. Immediately following the outbreak, Mexico closed schools, restaurants and many public places and limited public transport services in an effort to reduce infection. Moreover, as the measures took effect and the infection rate slowed in May, the government launched a tourism marketing campaign, designed at reassuring tourists regarding the safety of visiting Mexico and encouraging them to return.

Mexicana Launches New Carrier Major Mexican airline Mexicana in March launched a new carrier on 16 March, known as Mexicana Link. The new airline is intended to complement the services provided by Mexicana and its low-cost airline Mexicana Click, by providing increased domestic services. The airline is based in Guadalajara and will therefore allow passengers to make regional connections without having to transit through Mexico City. Once fully launched, the new airline will service 25 domestic routes, using 13 leased Bombardier CRJ-200s, with capacity of 50 passengers each. These domestic routes will replace many of those previously operated by low-cost carrier Alma de Mexico, which ceased operations in November 2008, owing to financial difficulties. Mexicana's decision to launch Mexicana Link indicates that it views the global economic downturn as an opportunity to consolidate its presence in the Mexican market. With many low-cost operators suffering from a slowdown in passenger travel and high fuel costs, the group may seek to expand its services further in order to provide further competition.