Mexico Puts a Price on Border Crossing for Foreign Visitors

Mexicans have been squeezed for more than a year by their government’s relentless budget cuts and tax hikes. Soon, foreign visitors will start feeling the pinch.

On July 1, tourists who travel beyond the border region into Mexico will be charged a $15 entry fee, with revenue--conservatively projected at more than $120 million a year--going to pay for modernizing immigration systems and more aggressively promoting tourism.

All foreign visitors who arrive by plane, travel by land more than 16 miles into the country or come ashore from cruise ships for more than 72 hours will be charged the fee. Payment won’t be collected from the millions of day visitors and workers who move back and forth in the border economy.

Some hoteliers are howling that the government’s fee will strangle the golden goose.

“Since we have such a long frontier with the richest and most traveled country on the planet, it is absurd to close the door,” the hotel associations of six northern Mexican states declared in a joint letter this week to President Ernesto Zedillo.

Carlos Ortega, director-general of marketing for the Tourism Ministry, responded that Mexico is simply joining the majority of nations in charging tourists an entry fee. Indeed, the United States charges Mexicans $45 for a tourist visa application--even if it is rejected.

Ortega also noted that the $15 fee is a small percentage of the average $562 spent per visit by foreign tourists in Mexico and thus is unlikely to be a serious disincentive.

What’s more, he said, Mexico needs to find revenue to compete in an ever more competitive world tourist market where costly promotional campaigns are the norm. Yet the Tourism Ministry’s budget has been cut repeatedly in the past year, along with those of other government departments, as Mexico has reeled under pressure from the global financial crisis and the plunge in the price of oil, once this nation’s primary source of foreign currency.

Significantly, tourism overtook petroleum as the second-largest source of foreign earnings last year, with manufacturing exports now in first place. Tourism Minister Oscar Espinosa last month cited forceful promotion as one reason Mexico moved up from eighth to seventh place worldwide in the number of foreign tourist arrivals, and from 16th to 14th place in the value of foreign currency earned from tourism--$7.85 billion in 1998.

In fact, numbers tell the story of the critical role tourism plays in Mexico’s economy: 1.7 million jobs depend on tourism directly, and paychecks are 30% greater on average than in other sectors, according to Espinosa. With domestic tourism also recovering, the sector now accounts for 8.2% of the annual gross domestic product. And tourism has been growing faster than the economy as a whole, with investments in hotels and resorts worth $3.8 billion now under construction.

Foreign tourists--88% of them from the United States--numbered 19.3 million last year and are projected to exceed 20 million this year for the first time.

More than half of foreign tourists ventured beyond the border regions in 1998 and stayed overnight in the interior of the country. Those are the visitors destined to pay the $15 fee.

So while Tijuana will not be affected, cities and towns further inland, such as Ensenada and Monterrey, will. The state hotel associations complain that they are struggling to attract to such cities middle-class American tourists--typically a couple and two children, traveling in their own car.

“With this absurd tax, which would be $60 in such a case, the federal government has given a slap in the face to our good intentions,” the hoteliers said.

Ortega said details about how the fee will be collected are still being worked out, “but the most important thing is to establish mechanisms to make sure this doesn’t mean an additional administrative procedure for arriving tourists. It must be simple and quick.”

He said discussions were underway with airlines to see if the fee could be added to the ticket price. Mexico charges an airport tax this way, and earned $220 million from airport taxes in 1998.

Greg Brosnan in The Times’ Mexico City Bureau contributed to this report.