Mexico New Government Priorities for tourism

mexico

The question has bounced through the travel industry for months now: What is Mexico doing?

News that the new administration of Andrés Manuel López Obrador planned to disband the Mexico Tourism Board, shift promotional duties to embassies, and redirect money to build a train that visits some popular tourist areas has been out since late last year.

“Everybody’s got their eye on it,” said Bill Geist, CEO of DMOproz, a consulting firm in Wisconsin that caters to destination marketing organizations. “It’s one thing to cut a budget, but to eliminate it is just…it’s a head scratcher.”

There have been few details about what will happen moving forward, even as international offices shutter and continued security concerns make the need for a cohesive communications strategy more acute.

Tour operators and hoteliers in Mexico are fearing for future business, especially as they see a leveling off or decline in bookings this year, and planning ways to take their own action. Foreign visitors spent an estimated $22.5 billion last year in the country.

In the meantime, other warm-weather destinations and tourism insiders are watching to see if the a rollback in marketing dollars will equal increases elsewhere.

“I think it’s terrible,” said Alex Zozaya, CEO of travel, hospitality, and leisure management company Apple Leisure Group. “One thing is to fix what is not working, but leave alone what is working and improve what is working. Because there are some things with the [board] that are not working, let’s shut it down? That’s a big mistake.”

MEXICO’S STRATEGY

Secretary of Tourism Miguel Torruco Marqués revealed the plan in December, following through on the president’s platform that promised social change.

The money that funded the board— it’s not clear how much — is supposed to be moved to an infrastructure project to build what is known as the Mayan Train.

The government also revealed additional priorities late last month, including spreading tourism around the country by encouraging development off more regional attractions; increasing domestic tourism; drawing more high-income visitors from markets including the United States, India, United Arab Emirates, China, Korea, and Russia; and boosting the number of Mexican-American visitors on heritage trips.

Notably, the government’s statement said, some of those programs will move forward with marketing support from the country’s consulates and embassies. Most of the international tourism board offices were expected to close by the end of February.

Carlos Gerardo Izzo, a spokesman for the Mexican consulate in New York, told Skift last month that the government believes the message can spread more efficiently through the existing network of consulates and embassies.

“That doesn’t mean in any way that we are going to promote less our country,” he said. “We’ll keep our effort to show the world that Mexico is a wonderful place to visit for tourism, for business, or for any purpose.”

What’s not clear is how, or through what programs, and how they will maintain relationships in the travel industry. Another question: what will happen to the assets and training materials provided through the tourism board’s Visit Mexico site.

Alfonso Sumano, who heads up the board’s New York office, didn’t have many answers when he spoke to a group of travel insiders at the end of February.

“To be honest with you, at this point I do not have a total certainty what the plans are going to be executed in the future,” he said in response to an audience question. “The tourism board is going to close as it is now. … They have to solve a couple of very interesting issues. First the funding and then the strategy.”

Sumano said he had been writing nine or 10 different papers with suggestions, and was urging the government to keep its online training resources live. He said he expected to hear a more clear strategy soon, with the private sector playing a bigger role.

He said it’s crucial for someone from the country to stay in touch with travel partners, distribution channels, associations, and travel agent groups; keep lines of communication open; and continue the digital presence of VisitMexico.com, as well as training tools that live on the site.

 

VistMexico.com will continue to be a marketing tool for Mexico tourism despite the decision to close tourism offices worldwide.

“We understand that there are sometimes other priorities, but we need to keep on going,” Sumano said. “We don’t need $300 million to promote Mexico. We just need a few tools and the resources to do our job and specifically be in communication with all of you.”

Employees of several global offices could not be reached for comment; officials with the board, known in Spanish as the Consejo de Promoción Turística de Mexico, also did not respond to questions.

POTENTIAL FALLOUT

Sumano and others said they expected not to see any direct impact from the decision to eliminate the tourism board immediately. The government said 41.5 million people visited the country last year, up from 39.3 million in 2017.

“If they stop and shut down the promotion or we decide not to do it proactively as we did in the past, it will have an impact in the mid to long term,” Sumano said.

Already, there are signs of pressure.

Zozaya said Apple Leisure is seeing a significant decline in Mexico, where it does about half of its business.

Cancun and the Riviera Maya, he said, have been down 14-16 percent compared to a year before, with about 70 percent of winter business on the books. Every destination in Mexico is down, he said, some in the number of passengers and rate and some just in terms of the quality of visitors.

Jamaica, on the other hand, is up 20 percent, the Dominican Republic is up 12 percent and Costa Rica is up 25 percent compared to the previous year.

“Clearly, Mexico is losing market share,” Zozaya said, citing “a perfect storm” of factors.

Aside from the reduction in money for marketing and promotions, Mexico is still struggling with crime and violence in some areas and the negative perceptions that come with that; seaweed that has been washing on popular beaches; and increasing hotel room supply.

The U.S. State Department issued a recent security alert for travelers heading to Mexico for spring break, making fresh headlines. That’s on top of earlier warnings to “exercise increased caution” in the country and avoid some sections altogether.

“With the travel advisories that are out, they need to get control of that message. And there’s nobody to control that message,” Geist said. “I think that’s the biggest issue. There’s no way to control the brand, no way to control the message. There’s nothing coherent.”

With a reputation as a good value for Americans, at least in some popular spots, Mexico could suffer if other countries make targeted offers to draw budget-conscious travelers.

“Any destination that is a direct competitor to Mexico right now should be saying thank you to the Mexican government if they go through with this,” said Amir Eylon, president of tourism consulting firm Longwoods International. “The Mexican beach destinations obviously compete with other beach destinations in Central America and the Caribbean and even the U.S. Do I go to a Florida beach or do I go to Cancun?”

Geist, of DMOproz, said he expects Caribbean and Central American destinations to benefit, with one poised to gain in particular: “I think Puerto Rico’s the winner,” he said. “The beauty of Puerto Rico is if you’re American, you don’t need a passport.”

The destination has also made changes to its own marketing efforts, launching a new tourism board last year.

“We go where we’re invited,” Geist said.

Discover Puerto Rico Chief Marketing Officer Leah Chandler declined to weigh in on the Mexico decision. But, she said, “We believe international representation with local expertise is very important to the success of tourism promotion abroad.”

Hugh Riley, secretary general of the Caribbean Tourism Organization, shared that sentiment. He said he couldn’t comment directly on Mexico’s decision since he wasn’t clear on the circumstances surrounding it. But he said he is still a big believer in the power and necessity of tourism boards.

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