Arnie Weissmann
Arnie Weissmann

Last August, Jorge Islas Lopez, a tenured law professor at Universidad Nacional Autonoma de Mexico, was a student again. He was taking an intensive online course in, of all things, tourism promotion.

Islas is best known in his country for writing both Mexico's equivalent of the U.S. Freedom of Information Act and separate legislation outlining class-action lawsuits. That he would be studying the ins and outs of tourism is one of the many unexpected outcomes following the election of Mexican president Andres Manuel Lopez Obrador, popularly known as AMLO.

The president dissolved the Mexico Tourism Board last year and moved the responsibility for international tourism promotion into the foreign ministry.

The secretary of tourism would focus solely on domestic tourism; Ignacio Cabrera, named director-general of international tourism promotion, would report to the foreign secretary.

Cabrera was tasked with creating a blueprint for "diplomatic tourism," with promotion of international tourism falling to Mexico's consulates and embassies worldwide.

Which is where Islas comes in. He was tapped to be consul general of Mexico's consulate in New York, thus responsible for overseeing tourism promotion in that jurisdiction, coordinating with Jacobeth Hernandez Mendoza, the consul for economic affairs.

When I interviewed Cabrera in Mexico City last May, he made clear that AMLO viewed tourism not only as an engine of economic importance but also of social justice, the latter being the central theme of his campaign and administration. One of Cabrera's first tasks was to devise a plan that would look for ways to put more money and services into poor communities adjacent to resort areas, beginning with Los Cabos.

Islas' focus in law had been on expanding democratic reforms that were seen to benefit the poor and working people. That alone made him an ideologically compatible choice as consul general in a location as significant as New York.

The plans Cabrera shared with me sounded challenging and complex. I was curious to get a status update and so arranged to interview Islas in New York last week.

Islas appears to take his role in tourism promotion seriously. In addition to finishing an intensive online course, he attended the New York Times Travel Show and worked with Hernandez in outreach to consumers and trade. He said the consulate received tourism-related updates weekly.

I shared with him some recent numbers from the hospitality research firm STR that raised concerns that tourism was faltering since the tourism board had been dissolved: In 2019, RevPAR in Mexico dropped 6.6%, average daily rates were down 3.8% and occupancy was down 2.9%. The stats for the first two metrics were significantly worse on the Yucatan Peninsula, where Cancun and the Riviera Maya are located.

I also pointed out that Apple Leisure Group had said it would cut back $600 million in hotel investments.

Islas countered that "diplomatic tourism" was working. As evidence, he shared numbers showing that arrivals and spending each increased 9% year-over-year in 2019. And, he said, many investors had been sitting on the sidelines, awaiting details of the United States-Mexico-Canada Agreement.

Assuming all the statistics above are accurate, where is the disconnect between an increase in arrivals and drops in key hotel metrics?

I can think of two factors that might be involved: The sargassum invasion over the late spring and early summer months certainly had a suppressive effect on rates and occupancy and would explain why the Yucatan Peninsula was hit particularly hard. But perhaps of equal importance, hotel inventory rose 3.2% last year. If supply has finally outstripped demand, it could also explain the drop in key stats and the pullback on additional investment.

It's too early to look at possible changes in Mexico's market share among destinations, another key metric, but the rise in visitation suggests that the lack of a national tourism board is not the flat-out disaster some had predicted. (It certainly helped that several Mexican state tourist boards stepped up activities.)

But what's unknowable is if demand might have been higher still had there been greater promotion through a national tourism board. While room supply increased last year, it's also true that hotel inventory has been growing steadily for more than a decade, typically accompanied by greater demand.

Islas pointed out that AMLO's administration is betting on sustainable tourism payback later by the reassignment of tourism board funds to the Mayan train project, which will spread tourism and jobs into parts of the country where there is currently very little.

A more fair assessment of diplomatic tourism may have to wait another year, though Islas' reference to the Mayan train suggests a longer timeline might be needed to evaluate AMLO's overall strategy. In the meantime, hoteliers have statistics that give substance to their concerns about filling rooms in a country where tourism promotions are not spearheaded by tourism professionals, and the government has data to suggest those concerns are unfounded.

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