Mexico Feels Pinch of Missing Tourist Dollars

Surrounded by turquoise water, tan bodies and sugary sand, Domingo Gonzalez is a world away from the troubles in Iraq. Still, war has struck him squarely in the wallet.

The month of March typically finds the taxi driver busy hauling families and college students around this resort city. But an already sluggish global economy has been further slowed by the war, and that’s meant fewer visitors here and a lot more down time for Gonzalez’s aging Nissan.

“The tourists aren’t coming like they did before,” Gonzalez said. “The hotels say they’re getting a lot of cancellations because of what’s going on” in the Middle East.

Still recovering from the Sept. 11 terrorist attacks, which pounded the travel business worldwide, Mexi-co’s tourism industry once again is feeling the fallout from a distant conflict. Last year, Mexico played host to nearly 1 million fewer foreign tourists than it did in 2000. That represented a 5% slide from the 20.6 million who visited in 2000, and it was the second straight year of decline.

Now, as the drop continues, it is being felt keenly in a sector that accounts for about 10% of the nation’s gross domestic product, employs close to 2 million workers and is a crucial source of hard currency.

Thanks to Mexico’s proximity to the United States, its tourist trade has held up better than that of farther-flung hot spots. But hopes for a strong rebound this year have been damped by the bombs raining on Baghdad.

Hotel occupancies are slumping from the Pacific resort town of Cabo San Lucas to Isla Mujeres on the Caribbean. Ditto for Cancun, Mexico’s most important tourist destination, where spring break 2003 is turning out to be a bust.

“I’ve never seen it this quiet,” said Michael Torcello, a visitor from Nevada who has vacationed in Cancun 14 times. Particularly noticeable, he said, is that U.S. college students just aren’t packing local watering holes in the numbers seen in previous years.

Speaking of a popular Irish-themed bar, Torcello said, “I went by Pat O’Brien’s on St. Patrick’s Day, and the place was dead. That tells you something is going on.”

Before Sept. 11, more than 100,000 young people flocked to this Caribbean paradise each spring for a bacchanal of skin, sun, surf and suds. But tourism officials here say those numbers could be half that this season as students stick closer to home or opt not to vacation at all. That’s taking a toll on local workers and merchants who depend almost exclusively on tourist dollars to survive.

Alfonso Campos said business was off 50% at his father’s jewelry shop in downtown Cancun. Few visitors milled about the shopping district Saturday despite a long holiday weekend in Mexico.

“Just look around and you’ll see what I’m talking about,” said Campos, gesturing at the thin crowds and vacant shops. “The Mexicans are being cautious with their money, and the American parents are afraid to let their children come here with a war going on. They are worried about terrorism.”

So is the Mexican government. Fearful of an attack similar to the deadly bombings on the Indonesian island of Bali in October, officials beefed up security in Cancun this season, with more than 200 federal agents joining local police in patrolling the city’s streets and airport.

The security forces’ biggest job has been protecting “Los Springbreakers” from themselves. But even that duty has been lighter than usual.

The latest figures from the U.S. Consulate show that since early March, just more than 100 Americans have been arrested in Cancun, mostly for offenses involving too much alcohol and too little clothing.

That’s down from 360 arrests last year and 434 in 2001 -- a sure sign that fewer students made the trip this year, according to U.S. Vice Consul Scott Riedmann, who has been staffing the agency’s Cancun office during spring break.

“Last year, it was a river of students heading down the streets for the nightclubs. This year, it’s more like a stream,” said Riedmann. “It has certainly made my job easier. But it’s tough on the pocketbooks of the local hotel owners and merchants.”

Hoteliers have slashed rates in an attempt to drum up more business. And a weak peso has made Mexico more of a bargain than ever. But travel agents say security concerns have taken precedence over price for many would-be vacationers.

Noemie Cornelius, an agent with First Travel of California in Villa Park, said worried parents recently nixed a Mexican spring break holiday she was booking for a group of students.

“It’s not just Mexico. People aren’t going anywhere,” Cornelius said. “There are so many deals out there, and nobody is grabbing them.”

Still, Mexico is likely to emerge from this latest setback in better shape than some other tourism-dependent economies, travel experts say. About 70% of the foreign visitors arriving in Mexico each year come from the United States, and many of them consider a trip south of the border akin to visiting their own backyard.

Back in December, even as the U.S. was preparing for war, U.S. travel agents picked Cancun as the No. 1 vacation destination for 2003 based on their bookings at the time, according to a survey by Minneapolis-based Carlson Wagonlit Travel, one of the largest U.S. travel firms. Three other Mexican resort areas -- Playa del Carmen, Puerto Vallarta and Cozumel -- scored in the top 10.

“Mexico is close, and it’s considered a safe destination,” said company spokeswoman Becky Waller. “It’s still very popular” among those willing to travel.

The outbreak of hostilities in Iraq couldn’t keep Kevin Koch away from Cancun. A history major at Kent State University, the 24-year-old acknowledged having some concerns about being in a foreign land while his own nation was at war. The chilly Ohio weather proved a strong incentive to chance the trip.

Koch said the TV in his hotel room was tuned to CNN to help him keep abreast of world events. But he acknowledged that the topic of war hadn’t come up much at the freewheeling club he had visited the night before, where “shock and awe” had nothing to do with events in Iraq.

“I feel a little guilty,” he said, watching a beach volleyball game as waves tumbled against the shoreline under a perfect blue sky. “But you’ve got to keep living your life.”