Swine Flu Endangers Health of Mexico's Tourism Industry

Already Hurting From Drug Violence, Country Prepares to See Third-Largest Business Shrink

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NEW YORK (AdAge.com) -- First drug-cartel violence, then an earthquake in its capital city, and now a worldwide panic over swine flu is threatening Mexico's third-largest industry: its $13.3 billion tourism business.

Mexico's tourism industry is being hit hard due to drug-cartel violence, earthquakes and the latest panic over swine flu.
Mexico's tourism industry is being hit hard due to drug-cartel violence, earthquakes and the latest panic over swine flu. Credit: AP
By this morning, the swine-flu outbreak in Mexico was suspected in more than 150 deaths and more than 1,600 illnesses. There have been 50 confirmed cases in the U.S. and dozens more in Europe, Canada and Israel, among other countries. The U.S. Centers for Disease Control and Prevention issued a notice yesterday telling Americans to avoid travel to Mexico, and Canada has issued a travel advisory. No less an authority than Richard Besser, acting head of the CDC, said on CNN's "American Morning" program today, "If I had vacation plans in Mexico coming up right now, I'd look to postpone those." The European Union Health Commissioner made a similar pronouncement.

The Associated Press reported that Germany's biggest tour operator and Japan's largest tour agency both suspended charter flights and tours to Mexico through May 4 and June 30, respectively. The AP also noted that Acapulco's mayor has closed most bars and restaurants in the city.

Most major U.S. domestic airlines that regularly fly into Mexico, including American and Continental, are relaxing their policies on changing reservations. American said that anyone who bought a ticket to Mexico prior to April 25 can change it by May 6 without incurring a fee.

Bad timing
But it's the market closest to home that concerns Mexico, which shares a border with the U.S. and draws 80% of its tourists there. Mexico spent $40 million last year on tourism campaigns targeted to the U.S., according to TNS Media Intelligence.

The timing couldn't be worse for Mexico. Despite the weakened economy and the ongoing drug-cartel violence that has claimed nearly 2,000 lives, the country's tourism trade had been doing well. The Mexico Tourism Board reported a 2% increase in visitors in the first three months of 2009 compared with the same time period in 2008; for full-year 2008, visits were up 5.9% from 2007. Some of that is likely due to Americans pinched by the economy who were opting to travel to Mexico rather than take a more costly trek to Europe -- until now.

Efforts to reach Mexico Secretary of Tourism Rodolfo Elizondo Torres were unsuccessful. Gustavo Rivas, of the Mexico Tourism Board's New York office, did not respond by press time. Manny Machado, CEO of Machado Garcia-Serra Communications, which handles U.S. and Canada media planning and buying for the Mexico Tourism Board, told AdAge.com he has people on the ground in Mexico City right now who are "in conversation to determine the next step" to react to the crisis.

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