Mexico Promotes Value in Face of Setbacks

Tourism sees a glimmer of hope in the fourth quarter

By: By Mark Rogers

Mexico Promotes Value in Face of Setbacks // (c) 2009


These days, the pendulum swings widely when discussing the current state of tourism in Mexico, with some experts remaining relentlessly pessimistic as others express a head-in-the-sand optimism. The truth lies somewhere in the middle, a view taken by many of the participants at the recent Mexico Travel & Real Estate Tele-Symposium. The symposium took on the trio of challenges facing the destination: the spate of media coverage on violent crime in Mexico, the recent swine flu epidemic and the continuing economic recession in the U.S.

“Mexico will come back, but it will take a lot of effort,” said Pat Butler, CEO of Club Acquisition, which has properties in Mazatlan and San Felipe.

Butler noted recent figures from an industry survey showing Mexico hotel occupancy down 50 percent in 2009 and a statement from Rodolfo Elizondo Torres, Mexico’s secretary of tourism, which said that revenues from tourism are down $5 billion for the year.

“Airlines overreacted in cutting flights,” said Alejandro C. Yberri III, CEO of Costa Baja in La Paz and former CMO for Aeromexico. “Those that didn’t cut flights are seeing full flights into Los Cabos. So, those airlines that did cut flights may now have second thoughts.”

“Sophisticated travelers know the geography of Mexico and are aware that the dangerous areas are far from the resort areas,” said Ralph Aruzza, vice president of sales for Rosewood Hotels & Resorts. “But the swine flu warning did create fear in these same sophisticated travelers — although the fear was short-lived, and we’re seeing an uptick in bookings.”

The H1N1 U.S. government warning was lifted on May 15.

Aruzza noted that, in May, Rosewood saw a precipitous fall-off in its Mexico bookings and occupancies were tremendously affected. However, postponed bookings shifted to a later time frame in July and August.

“We forecast a six-month time period for recovery,” said Aruzza. “November and December and 2010 first quarter bookings seem to be as healthy as bookings in 2008.”

Rosewood manages Las Ventanas al Paraiso Resort in Los Cabos and is currently developing the Artesana Rosewood Residences in San Miguel de Allende.

“Initially the H1N1 influenza outbreak had an immediate and large impact when the travel restrictions were announced,” said Eric Calderon, COO for Auberge Resorts. “Many of our guests postponed their travel immediately, especially for May and June. But thankfully, many rescheduled their travel for late summer. Christmas bookings and fourth-quarter advance bookings are picking up and 2010 will be an improvement over 2009.”

Calderon observed that safety has never been an issue with Auberge, since the resort is in Los Cabos, far from the border violence.

Addressing the economic recession side of the equation, Calderon observed, “The slowdown is slowing down.”

When asked about the benefits of traveling to Mexico at this time, the majority of participants agreed that the destination offers great value, convenient accessibility from the U.S., a wonderful climate and a culture of hospitality that continues to have great appeal for travelers.

“Currently there are incredible fares to Mexico from the airlines,” added Aruzza.

When asked if travel agents can expect Mexico’s hotels and resorts to offer tremendous bargains and promotions, Calderon said there was no doubt about it.

“Absolutely we’ll see promotions,” said Calderon. “We’re holding on to rates and offering added value.”

Calderon also noted that now is an ideal time for potential guests to ask questions about added-value propositions.

“We’re reaching out through our database and to our travel agent partners about added-value offerings,” noted Aruzza.