Contentious Mexico train revived as new president comes to office

Contentious Mexico train revived as new president comes to office

CANCUN, Mexico -- The Mexican Congress is expected to increase its tourism tax on airline tickets to $32 from $25 to help build an on-again, off-again, sometimes controversial, $6 billion-plus tourist train that would connect hot destinations across the Yucatan Peninsula.

President-elect Andres Manuel Lopez Obrador has said he is strongly committed to not only completing but also significantly expanding the tourist train route. The $7 increase was proposed after Lopez Obrador initially set off alarms among tourism suppliers by saying he planned to tap funds raised by the current $25 fee, all of which are earmarked for tourism promotion.

Reports about those plans prompted Apple Leisure Group (ALG) to launch a letter-writing campaign of protest to the new administration. They also prompted a series of meetings between business and tourism officials.

The latest word, according to Dario Flota Ocampo, director general of Mexico's tourism office in the Yucatan state of Quintana Roo, is that there is an agreement between Congress and the incoming administration to include the $7 fee hike in the federal budget being finalized in November.

The extra $7, he said, would be dedicated to beginning studies and planning for the train while preserving promotional funds.

Colette Baruth, senior vice president for global sales, marketing and distribution for AMResorts, which is part of ALG, said the proposed air ticket fee hike is "definitely a better resolution. ... But with any additional increase in tax there really should be a very good logistical and analytical view of what the consumer is going to be attracted by. What's going to bring [tourists] back?"

Baruth added, "In light of everything that's happening with tourism in Mexico currently, ... all of the mechanics of the travel industry need to be looked at. That's really where we are right now. We want to be able to maintain the amount of tourism that we had in 2016, which was the best year in a really long time, and grow from there. Right now, we are in a position where we are just trying to make it up."

Flota agreed that promotion is key right now. U.S. visits to Cancun and the Yucatan have slowed significantly since the State Department issued double warnings about the area in 2017, one related to cartel violence, the other referencing allegations that illicit, tainted alcohol was being served at some all-inclusives in the Yucatan.

In addition, the area's normally pristine beaches have seen recent infestations of sargassum, a smelly seaweed. 

The alcohol warning followed a report by the Milwaukee Journal Sentinel that a 20-year-old woman drowned in a pool after drinking with her brother. He ended up with a concussion and could not remember what happened. 

The report also detailed other cases of tourists who said they had blacked out at resort properties in Mexico after only a few drinks, furthering suspicions that the alcohol was tainted.

In 2017, Flota said, U.S. tourism growth to the Yucatan slowed from 8% to 1%. And while visits from other places are growing, he said that rates are higher for Americans than for visitors from other countries. And with 101,000 hotel rooms in the state of Quintana Roo, he said, just a 1% difference can be significant.

To help bring back U.S. visitors, Flota said, his office is working with travel agents to develop a website with helpful facts to help them address client concerns about safety. 

He asserted that no tourists have been impacted by drug violence and that it was never proven that the woman who drowned had been served tainted alcohol. She did have high amounts of alcohol in her system, he said, and the board is working with hotels to promote better education about overconsumption for both guests and bartenders.

The train, he said, will also help grow tourism in the area, making it easier for visitors to see more of the peninsula, while creating jobs and giving locals an easier way to travel to and from their villages to employment in the tourism sector.

Such a train was originally proposed in 2012 by Mexico's current president, Enrique Pena Nieto.

Opposition to that plan had also flared at one point, with hoteliers at a 2013 summit expressing concerns that it was linked to since-abandoned plans by Carnival Corp. to build a homeport in Calica, near Playa del Carmen. 

Hoteliers feared that cruise passengers would take all the air seats and that a train would then make it easy for cruise lines to ferry passengers to the peninsula's Mayan ruins and other sites, reducing demand for hotels.

The plan was eventually scrapped when oil revenues softened, but it was revived this year as part of the incoming president's ambitious tourism agenda.

Flota said the only opposition he has heard this time around revolves around the airline ticket fee, but he thinks that a $7 hike is small enough that it would have little impact.

The original plan called for a tourist train from Cancun down through Tulum and to the Mayan ruins of Palenque, which lie 520 miles to the southwest in the state of Chiapas, at a cost of about $1.5 billion.

The new plan would add a western leg that would reach Campeche, Merida and Valladolid before completing a 900-mile circuit in Cancun. The proposed track would take four years to construct, officials said, and would cost between $6 billion and $8 billion in what is envisioned as a public-private partnership.

Flota said it is his understanding that the money raised by the ticket fee hike would be dedicated to beginning economic, environmental impact and other studies necessary to prepare the project to be put out for bid to the private sector.

The incoming administration recently met with the governors of all the Yucatan states involved, he said.

"The idea is that on the first of December [when the new president takes office] they can start with the process of sending invitations to investors to be part of it," Flota said. "So they want to start soon."

The first stage, he said, would run from Cancun to Tulum. That would be the easiest to build, Flota said, as it would run alongside the highway where the government already owns rights of way and access to utilities.

Planning, he said, will get more complicated in more remote and environmentally sensitive areas, including the Sian Kaan biosphere near Tulum.


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