Tourism to Mexico Fell in 2019 – Predicted to Keep Falling

Tourism to Mexico Fell in 2019 – Predicted to Keep Falling

 

If you’re an expat in Mexico, then you likely long for the throngs of tourists to decline—and you might just get your wish. Tourism to Mexico fell in 2019, and it’s predicted to keep falling. And as much as you would probably like those idyllic pueblos and beaches to yourself, this could spell trouble for the Mexican economy.

 

Tourism to Mexico Fell in 2019 – A New Study:

 

A comprehensive study by a hotel data analyst STR in 2019 found a steady decline in tourism in the first 11 months of 2019 (before picking up in the final month at the start of the tourist season).

 

Measured on several variables, this in-depth analysis has concluded that there will likely be challenges ahead for the Mexican tourism industry. 

 

STR found that in all of Mexico:

 

  • The Revenue per Room (RevPAR) decreased to $69.11 USD (a fall of 6.6%)
  • Occupancy levels declined to 61.6% (a fall of 2.9%)
  • Average Daily Rate fell to $112.17 (a fall of 3.8%)

 

STR found that in the Yucatan Peninsula (including the Riviera Maya):

 

  • The Revenue per Room (RevPAR) decreased to $111.94 USD (a fall of 12.9%)
  • Occupancy levels decreased by 2.5%
  • Average Daily Rate fell to $163.28 USD (a fall of 10.6%)

 

Many reasons have been put forth contributing to the decline of Mexican tourism. Some point to the increase in cartel violence as a likely contributor to the fall in hotel figures. In addition, American political rhetoric is also having an effect on the tourism decline.

Mexican tourism falling

Tourism to Mexico Fell in 2019 – Hotel Rooms are Increasing:

 

To make matters worse, the number of hotel rooms in Mexico increased by 3.2% during this 11-month period, while the demand for these hotel rooms increased by .01%—in effect staying stagnant in 2019.

 

In an interview with Travel Weekly, Jennifer Dohrmann-Alpert, the Vice President of Advisory Services at HKS (a global design firm) stated, “There is certainly a threat of oversupply in Mexico. . . We’ve seen tons of developments entering the pipeline—especially in places like Riviera Nayarit and Cabo, and many of these projects are opening between 2020 and 2025. If there’s an economic slowdown, I think we could see a definite impact from oversupply in the next three to five years.”

 

Tourism to Mexico Fell in 2019 – More Reasons for Falling Figures:

 

– Disbanding the CPTM –

 

One of the biggest fears in the future challenges that tourism to Mexico faces is that AMLO disbanded the Tourism Promotion Council (CPTM). This funding was in order to finance his vision for the Mayan Train Project (a controversial 1,500-kilometer high-speed rail connecting Mayan sites from Palenque to Merida, to Tulum, to Chetumal).

If you have forgotten, the CPTM is responsible for the Pueblos Magicos Program which was overwhelmingly successful in drawing tourism to rural communities and thus spurring the local economy from the ground up.

 

– Investing in All-Inclusive Tourism –

 

Much of Mexico has followed the path that was laid before it by the Riviera Maya, and it has created a lot of all-inclusive hotels. But Millenials seem to be attracted more to experiential tourism rather than the classic all-inclusive experience.

 

– Sargassum on the Caribbean Coast –

 

The red algae called sargassum has been a plague on the ecosystem of Caribbean tourism which is affecting tourism. At the time of this article, it has subsided, yet even its reputation has left a stain on tourism to the Riviera Maya. 

 

– Cruise Tourism is Up –

 

The fact that cruise tourism seems to have drawn the attention of the aging Baby Boomer population is likely hurting the hotel numbers because cruises provide lodging of their own.

 

Tourism to Mexico Fell in 2019 – Conclusion:

 

This downturn is already putting off major investors. Apple Leisure Group put over half a billion US dollars worth of investments on hold until the market picks up again. Other companies are scaling back their expansion investments, offloading half-completed projects, and even ditching plans for future projects. 

 

This could affect the Mexican economy because a vast amount of its income comes from tourism. Time will tell if the tourism economy can pick up, but you can likely expect people in major tourist destinations to take a hit in the coming years. 

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Comments (20)

  • fred

    hotels going down is a global trend.
    as the biggest hotel operator in the world does not even own one hotel room. hotels who do not adjust will go away fast.
    this ‘study’ is lying. mexico’s tourism is booming. look at the airport passenger numbers: plus 10% year over year.

    Reply
    • Fred Peters

      You nailed it Fred. As a rental agent I see people trending away from hotels and towards private condo rentals and Airbnb. More USA propaganda to get people to stay home and spend money!

      Reply
  • John Chambers

    I’d like to see more tourism directed AWAY from the (corporate-owned) all-inclusive resorts, and TOWARD locally owned facilities. Mexico has a treasure-trove of small hotels and restaurants that are not only less expensive, but offer a REAL Mexican experience, frequently with local flavor. Mexico is so much more than what tourists (I hesitate to call them that) see in a resort full of other gringos.

    I believe AMLO made a huge mistake ditching the tourism authority. It now falls on the shoulders of LOCALS to promote their own localities and amenities. There should be a way to support that effort.

    Reply
    • Raf Bracho

      We appreciate your thoughts John! Thanks for commenting 🙂

      Reply
    • BOB SWEET

      I, on the other hand, hope that the tourists stay in the all inclusives! Myself staying at a small fishing village think it was great! Now over the last 5 years the influx of tourists has made my experience not as good as I used to enjoy! The town has become crowded, and the prices have escalated and the culture is disappearing, becoming more north americian! Time to look around again and find a place that is much quieter and more enjoyable for me!

      Reply
      • Raf Bracho

        Between you and me Bob, I fully agree. I find the type of tourism that Mexico is attracting is not what it used to be. No longer is it focused on appreciating a new culture. It seems to be geared toward young partygoers.

        We hope this message finds you well. Thanks for commenting!

        Reply
  • J. Angela Corelis

    No mention of the large number of condos being built which compete with hotel lodging.

    Reply
  • Nigel Ferreira

    I believe also they are out pricing themselves out of the market. Many tourist are beginning to complain about the prices of the hotels. The cost of living in Mexico has increased drastically within the last two years especially with gas prices constantly rising

    Reply
    • Raf Bracho

      That’s true Nigel! Especially when AirBnBs are so cheap. . .

      Reply
  • William Hevener

    The problem is airbnb. People are renting condos like crazy and not staying in hotels. Its not the cartel. Its cheaper condo prices that are killing the hotels in mexico

    Reply
    • Raf Bracho

      Mexico has a reputation that it has to overcome. However, you are right. AirBnB is changing the face of tourism! Good point William. 🙂

      We hope this message finds you well.

      Reply
    • Victoria Ide

      I totally agree with all those who mention AirBnB as the biggest challenge to the hotel industry. That’s s why forward thinking hotel groups have added AirBnB sections to their selections, like Paseo 60 in Merida. And as long as those responsible for tourism in Mexico won’t realize that the concept of all-inclusive hotels has changed to eco-tourism and accommodation relating to media ambiente, tourist numbers will be dropping. This is my humble opinion. Victoria

      Reply
      • Raf Bracho

        Agreed Victoria! I have personally seen several hotel rooms on AirBnB.

        Thanks for commenting!

        Reply
  • Val McKenzie

    I know our small town experience is booming! Hotels are building bigger units, new condos and expansion on the all inclusive. The hotels in the Guayabitos area are typically booked year in advance. If you don’t , you loose your place!

    Reply
    • Raf Bracho

      Oh well, if you are happy for this, then that’s great! I’m sure it’s good for the local economy. 🙂

      We hope this message finds you well.

      Reply
  • Gary

    It’s always going to cause huge a change in the economy when the big hotel chains try to move in with higher prices. That causes huge problems for Mexican people that rely on tourism for their income. The all inclusive hotels don’t really encourage tourists to mix with the local people and spend their money where it is really needed and appreciated by those most deserving. Go local spend local and meet the local people is my opinion.

    Reply
    • Raf Bracho

      That’s a great point too Gary. People tend to stay in the all-inclusive hotel eat soggy chilaquiles and drinking as much liquor as they can. I’m not a fan of that experience.

      Thanks for your input! We hope this message finds you well.

      Reply
  • John S Temple

    The cost of living has increased drastically in the USA and with that debt too. Living wages are none existent, meaning there is little disposable income to travel anywhere. We have been noticing tourist arrival seems to be latter than the year before. Trade war with China and many other countries have also stifled income further discouraging travel. Travel to the US has dropped drastically also. Corruption on both sides of all borders around the world has increased reflection of income being sought from crime is on the rise. That is why living wages over tax breaks for the rich has taken a huge toll on the working families world wide.

    Reply
    • Raf Bracho

      I very much agree with you John that it is becoming harder to travel as an American. However, there was a time when Mexico attracted people from all over the world. . . Obviously, Mexico greatly depends on American and Canadian tourism because they are so close by, thus your point is still rather good. 🙂

      We hope this message finds you well. Thanks for your input!

      Reply

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