Rebuilding Cancun

This resort city was built on crystalline beaches, turquoise waves and people like Margarita Rojas, who has seen once-sleepy Cancun become one of Mexico’s fastest-growing regions.

Born in northern Mexico, Rojas vacationed here in 1993 and decided to stay, making a career of assisting tour groups for some of the area’s swankiest hotels. She and her musician husband, Javier, have forged a good living. Visitor dollars have paid for their spacious home, a couple of cars and private school for their two young children.

But last month’s Hurricane Wilma dealt a ferocious blow to Mexico’s most important tourist destination. The Category 4 storm packed 145-mph winds that smashed hotels, pounded restaurants, bars and shops and obliterated miles of Cancun’s world-famous beaches.

Some of the damage could take months, even years, to repair. That’s a huge worry for Rojas and the 750,000 people of Cancun, virtually all of whom depend on the tourist trade.

“People come to Cancun for the beautiful beach and the sun, and now there’s no beach,” Rojas said. “Who is going to pay hundreds of dollars a night to look at this?”

A lot is riding on the answer. Tourism is one of Mexico’s most important industries. It’s the nation’s third-largest source of foreign currency, behind petroleum and remittances from Mexicans living abroad. It’s one of the few reliable engines of job growth. And it’s largely powered by Cancun.

Nearly 40% of the $11 billion spent by international visitors to Mexico last year came from Cancun and the so-called Riviera Maya immediately to the south, which includes smaller resort cities such as Playa del Carmen and the Mayan ruins of Tulum.

So crucial to Mexico’s prosperity is this sparkling 75-mile stretch of Caribbean coastline that analysts say fallout from Wilma could trim as much as a quarter of a percentage point from the nation’s fourth-quarter economic growth. Based on 2004 data, Mexico is losing an average of $11.5 million a day in foreign visitor spending.

Restoring Cancun has become a priority for President Vicente Fox, who is coordinating rebuilding efforts with state and local officials. The government is cutting reconstruction red tape, extending small-business loans, deferring taxes for entrepreneurs who suffered property damage and marshaling armies of public utility workers to repair the shredded infrastructure.

In contrast to Hurricane Gilbert in 1988, when portions of Cancun remained without basic services for months, water and power were restored to many areas within days after Wilma. The speedy response was a reflection of Mexico’s growing experience in handling big disasters, as well as a recognition of Cancun’s economic clout, according to Felix Gonzalez Cantu, the governor of the southern state of Quintana Roo, where Cancun is located.

“We called in the cavalry this time,” said Gonzalez Cantu, who said that 4,400 electricity workers arrived within days to repair downed power lines in the region.

Thousands of locals as well as workers from across Mexico are pouring in to Cancun to assist with the cleanup, transforming this laid-back tropical paradise into a humming construction site. At the Plaza Zocalo shopping area in the hotel zone, vendors spruced up their battered souvenir carts on a recent afternoon while perspiring Navy troops patrolled in the 88-degree heat. Dusty construction workers streamed in and out of a neighboring convenience store, searching for a quick snack amid the clatter of hammers and buzzing drills from nearby buildings. Up the road, squadrons of waiters, cooks, maids and bellhops swabbed moldy hotel rooms and carted away debris.

Only about 12% of Cancun’s 27,000 hotel room are currently inhabitable, a figure that Gonzalez Cantu predicts will jump to about 80% by Dec. 15, given the flurry of construction activity.

The Riviera Maya, which was spared the worst of Wilma’s wrath, has 60% of its 24,000 rooms intact with nearly full recovery forecast by the end of the year. Tourism authorities are planning a media blitz next month to announce the area’s comeback just in time for the winter high season.

But some insurance experts and tourism veterans say that those estimates appear too rosy. Lisa Hoehn, a regional vice president with Michigan-based Passageways Travel Inc., one of the Midwest’s largest travel agencies, recently returned from a visit to Cancun. She said she won’t be recommending that her clients stay in the city’s hotel zone until at least spring of 2006, and she said she would book only select resorts in the Riviera Maya.

Hoehn said travelers to Cancun wanted pristine beaches, greenery, good shopping and vibrant nightlife in addition to spiffy hotel rooms.

“It’s hard to find a palm tree with a top....My gosh, Senor Frog’s isn’t even open,” she said, referring to a popular Cancun watering hole.

Hoehn said she was shopping for sites to relocate a business group of 400 that had planned to meet in Cancun in late February. She’ll be flying to Puerto Vallarta on Mexico’s Pacific coast soon to check out some resorts there. She said other warm-weather destinations such as Cabo San Lucas, Aruba and Jamaica were competing for such business as well.

“The competition is intense,” agreed Eduardo Paniagua, who owns a Cancun travel service catering to Japanese tourists. “There are a lot of places that are looking to take advantage of our situation.”

By some estimates, rebuilding in Quintana Roo would cost about $1 billion. The bill for repairing the beachfront along Cancun’s hotel row could reach $250 million and take as long as three years, though many believe that some serviceable repair can be done more quickly and cheaply.

But the work almost certainly won’t be completed in time for the first flocks of so-called snowbirds to nestle themselves in warm, fine sand this year.

That has the Rojas family looking to tighten its belt over the next few months.

Unlike tens of thousands of unionized hotel and restaurant workers in Cancun who have kept their jobs, albeit at greatly reduced pay because of the loss of tip income, the Rojases are contract employees who haven’t worked since Wilma hit.

Javier, a classical and jazz guitarist who played five days a week at the Ritz-Carlton and also performed at corporate events and weddings, counted a dozen canceled gigs, worth about $3,600, on his calendar .

“We’re lucky. We have some savings and we can survive for a few months,” Javier said. “But what about the others?”

Said Margarita: “Everyone needs money. Everyone needs to eat. The stress is building.”

The sense of frustration was palpable among the hundreds who gathered at a state office building in downtown Cancun last week to fill out forms to get assistance to repair their homes. Thousands of Cancun’s poorest workers live in houses cobbled together out of wood, plastic and tin. The government is providing them a thick cardboard-like material known here as “lamina” to patch their roofs.

Among the crowd was Roberta Arzate, who later burst into tears when she showed a visitor her ravaged home in a tough neighborhood called Region 102. Arzate, her husband and their three children are currently sharing a house with 14 other people. The tiny concrete-block home has a single bathroom.

Arzate’s husband works on commission helping to promote time shares to tourists, and probably won’t have a paycheck for weeks. Arzate, 36, sells rat poison in a local street market.

That would seem to be a lucrative business, given the mountains of hurricane debris piled on virtually every corner of her neighborhood. But Arzate said her customers -- waiters, taxi drivers and maids whose jobs depend on tourist income -- are more worried about putting food on the table.

“There are more rats, but less money,” Arzate said.

Still, there is an entrepreneurial hustle to this beach city where people have learned to adjust to the ebb and flow of the tourist trade.

At the Black Coral Flea Market in the hotel zone, Misael Salas Lopez attracted a crowd of locals by tossing T-shirts, skirts and other clothing on the sidewalk and slashing prices to as low as 15 pesos, or $1.40. His family owns five gift shops that support 15 people. He said cash flow was more important now than profit.

“We have to settle for this until the good ones come back,” he said, referring to big-spending foreign visitors. “At least I can buy a few tacos for 15 pesos.”

Cancun’s rebuilding is an opportunity for workers such as Gilberto Cruz Sanchez, whose southern state of Chiapas was pummeled by Wilma. The skinny 24-year-old arrived in Cancun on a bus last week with little more than the clothes on his back. He hoped to secure cleanup work that he heard would pay $140 a week, a small fortune in his rural village of Los Cristo Rey.

Despite the destruction around him, Cruz appeared dazzled at the luxurious resorts, the sparkling ocean and the prospect that he too could rise with the rebirth of Cancun.

“My dream is to find enough work here that I can stay,” he said. “There is nothing to go back to.”