Arnie Weissmann
Arnie Weissmann

They are among Mexico's most successful resort and hotel developers.

Jose Carlos Azcarraga's Posada group has almost 160 properties open, with another 52 under development.

Joe Martinez, with his wife, Delores, started the resort brand El Dorado. In addition, they run a significant inbound tour operation, Lomas, which moves 800,000 visitors around Cancun and the Riviera Maya each year.

Gibran Chapur's family's holdings comprise the Le Blanc brand and Palace Resorts, which includes the largest property in the Western Hemisphere south of the U.S., Cancun's Moon Palace.

And Juan Vela and his brother Eduardo have made their mark in Mexico hospitality with just five properties operating under the influential Grand Velas, Velas Suites and Casa Velas brands.

The four men traveled to Cancun last month for a panel I moderated at the Mark Travel Summit, and afterward they gathered for a post-panel roundtable to discuss the impact of challenges they face as they enter what should be their high season.

This group especially interested me because, as homegrown, family operations, they've successfully competed in a landscape where Spanish-owned all-inclusives have an outsized presence. For these four, challenges are personal as well as corporate.

All reported a worrisome deceleration in bookings in a year that started at full throttle.

They were enjoying a double-digit rise in business into the summer. Widespread allegations that tainted alcohol was served in resorts had some negative impact, the men agreed, but it was manageable, and it didn't significantly slow what, from all appearances, looked to be a very strong year.

Then came the U.S. State Department warning in August, which expanded previous advisories and included some resort areas, Los Cabos among them, that hadn't been mentioned before.

The impact was immediate and dramatic.

"We didn't see a big drop-down for FIT, but for us, the MICE [meetings, incentive, conferences and events] market is huge," Chapur said.

The meetings segment, in particular, was impacted because many U.S. corporate insurance policies won't cover travel to countries for which the State Department has issued a warning.

Azcarraga recalled a meeting on the topic with Roberta Jacobson, the U.S. ambassador to Mexico.

"There were two takeaways," he said. "She first pointed out that it was not a travel restriction, but we explained to her that it was being seen as a warning that Mexico -- Cancun and Los Cabos, in particular -- was unsafe to visit. She took note of that, and also that the group business was being hindered by insurance issues.

"The other point I thought was interesting was that usually warnings last for six months," Azcarraga continued. "But according to her, that is not the case; it could be changed earlier than that if [the State Department] understands what is being done to address the issues. While that is partly good news, and I believe her intentions are good, the bad news is that she had not been well informed. That hurt us. Hopefully, that has passed."

Changing perceptions is the "revolution" that will turn things around, Martinez said. And Juan Vela, who said things had reached the point where groups were canceling and walking away from large nonrefundable deposits, also worried about what he characterized as the lack of "a coherent response from Mexico as a whole, as we had in the past."

In response to previous challenges, Vela said, "the campaigns that Mexico did were of such high quality that the perceptions of people changed. I don't see that anymore. And that worries me because [today's issues] can have a long-term [negative] effect."

Having spoken with many of the 650-plus travel advisers who enjoyed the summit at the Moon Palace, I can confirm that perception is a big piece of Mexico's problem. The agents clearly enjoyed their time there, and no one mentioned feeling unsafe.

But I also believe the problem is twofold. Underlying issues of security must be addressed, or perception problems will simply recur on a regular basis.

I have previously reported on Los Cabos' concerted and high-profile efforts to address security, and I'm aware that significant steps are being taken in Cancun, as well, though with much less fanfare.

One could argue about the merits of broadcasting remedial activity or keeping the focus on good news. The jury is still out on the good-news strategy, and to Vela's point, that campaign has been largely muted since a new theme, "Mexico, a World of its Own," was launched in September.

But Los Cabos is already seeing results from its strategy: After responding aggressively and publicly in September to damage done by the August State Department warning, the destination revealed last week that the tide has already turned, with traffic in September and October returning to pre-warning levels, putting the destination back on course for a 17% annual rise in visitors despite the warning fallout.

Publicly or privately, the message has to get through to the State Department that action is being taken to address the concerns that sparked the warning. If the warning can be amended, the winter season will get a lift.

Azcarraga, who leans toward focusing on positive news, remains concerned but hopeful.

"Right now, we still don't know" how the year will end, he said. "Let me put it this way: The winter season will let us know what is working."


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