Wednesday, January 8th 2020

Tourism to Mexico Fell in 2019 – Predicted to Keep Falling

Written by

Rafael Bracho

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Mexican tourism fell in 2019

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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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