By SILVIO CANTO, JR.
Down in Mexico, the government is talking about reopening the economy.
But not so fast in Cancun. According to Mexican news reports, Cancun just isn´t ready for its previously projected June 1 reopening.
One English-language daily reported: “Quintana Roo Tourism Secretary Marisol Vanegas Pérez burst a few bubbles when she said that ‘it’s not true that they’ll be able to reopen, since the companies themselves don’t determine that, nor the market. It will be the federal and state governments.’ She added that the only hotels that should be open for the foreseeable future are those providing service for people carrying out activities deemed essential during the coronavirus pandemic.”
This is more than a health story for Cancun and for Mexico as a whole. It is a huge economic story because Cancun is a major source of hard foreign currency for Mexico.
In 2017, according to Statista, 6 million international tourists visited Cancun. That figure has been growing consistently ever since and was expected to hit 9 million in 2025.
In fact, according to the World Tourism and Travel Council, Cancun is the world’s most tourist-dependent city.
The economic impact of Cancun not reopening soon is considerable. If tourism, for example, was cut in half, the country would lose $7 billion in revenues.
How big is that? As a benchmark, consider that Mexico’s total GDP is about $1.2 trillion, and overall, tourism generates about 17 percent of that figure, more than in any other emerging country other than Thailand.
Add to all this the fact that Mexico was already in an economic recession long before the covid-19 pandemic hit, having contracted in 2019 for the first time in a decade, and rating agencies are projecting even more losses in 2020. Also, the Mexican peso is now one of the worst-performing currencies in the world.
The International Monetary Fund has warned that Mexico’s GDP will contract by at least 6.6 percent, which will make it the most economically vulnerable nation in the Americas save Venezuela.
So. yes, tourism is a big deal and Cancun’s notorious spring-break getaways are a key source of revenues.
About 70 percent of all international tourists to Mexico are from the United States, so how U.S. vacationers view Cancun’s safety record will be key in determining the resort city’s economic future.
Cancun does have a huge advantage. Most of the major hotels, or at least the ones that get U.S. tourists, are members of international chains.
Tourists know these names and have stayed there before, and are more likely to trust that the sanitary practices will meet international standards.
Cancun’s big problem will be convincing tourists to travel, period.
It may be a while before covid-shy tourists will be willing to hop on a plane in Dallas and spend a long weekend or honeymoon in Cancun.
And health authorities and hotel chains are going to have to bend over backwards to convince these potential vacationers that they are going to be safe.
Finally, it does not help that there is so much confusion about the virus numbers in Mexico.
According to some sources, the Mexican government is underreporting cases by as much as 2,500 percent.
The Mexican government is going to have to rev up its testing and come clean on its infection rates if it wants to get international tourists back to lying in the sun at Xcaret.
For now, the Quintana Roo government is taking a wait-and-see approach, before testing the waters of reopening for tourism.
And that means that Mexico is just going to have to wait for the much-needed revenues of foreign tourist dollars, at least from Cancun,
Silvio Canto, Jr. is a Cuban-born U.S. citizen who teaches English at a north Texas college. He is the author of the book “Cubanos in Wisconsin” and has a daily online radio program and blog dealing with U.S. and Latin American politics, as well as sports and historic events, and is a regular contributor to American Thinker.
…May 22, 2020