With Mexico Tourism Board closing, private sector seeks promotion options

After months of rumors, the Mexico Tourism Board has confirmed that Mexico's federal government plans to shutter the bulk of its operations and use its $300 million annual budget to build a train connecting tourism hot spots and villages across the Mayan Peninsula.

What remains unclear is what kind of inbound tourism promotion body, if any, will replace it. That uncertainty has travel companies scrambling for alternatives to keep from losing years of momentum in building Mexico into the destination it is today.

"The promotion for tourism is like fuel for a car -- indispensable," said Alex Zozaya, CEO of Apple Leisure Group, which is one of the world's largest sellers of travel packages to Mexico and the owner of AMResorts, which has multiple properties in Mexico. "Without good and sufficient promotion, the tourism will slow down until the only way to recover the volume lost will be by continuing to lower the rates to the point where quality and profitability would be gone. Next, the volume would be gone as well. It's a vicious cycle."

Mexico currently is the sixth most visited country in the world, according to the World Tourism Organization, and the second most visited country in the Americas behind the U.S.

Still, it has had its challenges in recent years, ranging from widely publicized drug gang violence to reports of tainted alcohol being served at resorts in the Yucatan Peninsula.

Zozaya said promotion of Mexico needs to increase rather than decrease and should be done through a public-private partnership.

Pablo Azcarraga, chairman of both the Mexican hotel chain Grupo Posadas and the Consejo Nacional Empresarial Turistico (CNET), the voice of Mexico's private tourism sector, said he is in the process of negotiating the creation of such a joint entity to manage advertising and promotion funds.

He said he is scheduled to meet with Mexico's new secretary of finance "to discuss the urgent need for the funds and the impact that tourism has in the Mexican economy."

Alfonso Sumano Lazcano, head of the tourism board's New York office, confirmed the shuttering of the decades-old tourism ministry, or Consejo de Promocion Turistica de Mexico, last week.

He said only three of the tourism ministry's 21 international offices -- New York, Tokyo and Berlin -- will remain open, and their operations might be folded into embassy operations under Mexico's minister of foreign affairs.

Sumano Lazcano said the tourism board's final event will be the annual Tianguis Turistico trade show in early April.

After that, he said, he hopes there will be more clarity on what the new administration plans to do with the money it collects on a $15 tax on inbound airline tickets, 70% of which went to fund the tourism ministry.

Until then, the only thing that seems certain is that whatever entity replaces the tourism ministry will be operating with a lot less, if any, federal money.

Meanwhile, tourism promotional bodies representing Mexico's states said they are discussing alliances to fill the gaps.

Oscar Alejandro Morales, promotion manager for the Jalisco Ministry of Tourism, said ideas include promotions based on travel types, including potential alliances among beach destinations and among culturally focused destinations such as Guadalajara, Guanajuato and Aguascalientes.

"We're going to rebuild everything," Morales said. "We're going to be [making] some sacrifices in order to start thinking as a team."

Last month's Fitur tourism trade fair in Madrid was the last international event supported by the Mexico Tourism Board, according to Richard Zarkin, public relations manager for the Riviera Nayarit Visitors and Conventions Bureau. While there, he said, representatives from tourism areas around Mexico discussed how they might continue to attend such events, such as next month's ITB Berlin, without federal backing.

"As destinations, we're getting together to promote ourselves without the Mexico Tourism Board," Zarkin said. "It's going to be challenging, because those funds helped a lot, especially for the branding. We need to rethink the way we do promotion -- not just [the states of Jalisco and Nayarit] as two neighboring destinations, but getting Los Cabos on the bandwagon and Quintana Roo and other big destinations, and promote each other together."

Luis Villasenor, public relations director for the Puerto Vallarta Tourism Board, said, "It is clear to all our destinations when we travel abroad: We don't sell Cancun, we don't sell Puerto Vallarta, we sell Mexico. The message is to sell Mexico."

He said that once the Mexico Tourism Board offices close, "we don't know how much budget [the board] will have, how they will invest it. They said there will be some funds [for] branding, but we don't know how much."

On the Record

Alfonso Sumano Lazcano, head of the Mexico Tourism Board's New York office, talked about the Mexican government's plan to shut down the board.

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Nevertheless, Villasenor and others, who were attending the Gala Vallarta-Nayarit conference in Puerto Vallarta last week, said they are prepared to make do with less.

"We need to do with two pesos what we used to do with three," he said.

The private sector is also looking to increase alliances with state entities.

Ray Snisky, chief commercial officer for Apple Leisure Group's vacations sector, one of the largest U.S. sellers of Mexico travel packages, said, "Based on feedback pertaining to the new strategy, we are working closely with all of the state tourism offices in an effort to ensure whatever the new process is will be executed effectively. We remain committed to driving the best outcome from whatever strategy is ultimately deployed by the Mexican government."

He added that working only with state tourism offices, however, "loses some of the cohesive leverage we were able to gain previously by engaging consumers and travel counselors with the entirety of the destination of Mexico in a singular campaign."

Even so, he said, "We welcome the opportunity to create a new public-private collaboration that leverages the strength of both. Mexico tourism desperately needs a robust promotional strategy."