Discounting has boosted Mexico demand

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Mexico tourist, Mayan ruins
A tourist visiting Mayan ruins in Mexico. Photo Credit: BlackDay/Shutterstock

NEW YORK -- With travel to Mexico down, hotels have been reducing prices to stimulate demand, and that tack has seemed to work.

During an Apple Leisure Group event here on Monday, Funjet Vacations president Ron Jacobs and Apple Vacations president John Tarkowski noted that resorts have been aggressively discounting. 

Hotel occupancy in Mexico is down 3% to 4%, Tarkowski said, and rates have dropped about 15%.

"We are starting to see the positives of those rates going down," Tarkowski said. "The last eight weeks or so, we are seeing Mexico bounce back, which is great news. I think all the [ALG] brands are starting to see that after a relatively tough winter."

Jacobs said Funjet's Mexico bookings are down about 5% this year, but he has started to see spikes. For instance, last week Mexico was up almost 20%, but that's compared to a soft period last year.

John Tarkowski
John Tarkowski

Jacobs said he often hears from agents that their clients want to visit a warm destination, but specifically ask for somewhere that isn't Mexico. He attributed much of that to negative reports that have appeared in consumer publications. 

Jacobs alluded to the wrongful-death lawsuit filed against the Iberostar resort where a young Wisconsin woman died in 2017. Her family alleges she was knowingly served tainted alcohol. Mexico has also been in the news for drug cartel violence near resort destinations and the migrant crisis at the U.S. border. 

While travel to Mexico has waned, other destinations have benefited. Jacobs pointed to the Dominican Republic, which is up 20% for Funjet. Europe is also booming. 

Competition from other destinations could become more difficult as the Mexican government has shuttered the Mexico Tourism Board, instead diverting those funds for a Mayan tourist train.

"That is concerning, because at a time where Mexico is struggling, they've pulled resources out of that to focus on infrastructure when, really, they still have to be doing promotions," Tarkowski said. "Because, let's be honest, you're competing against the rest of the world."

Ron Jacobs
Ron Jacobs

He said Apple Leisure Group is "disappointed" the board is shutting down, saying promotion shouldn't fall solely on the private sector. 

Tarkowski encouraged travel advisors to share the positive experiences they've had in Mexico with clients.

Jacobs suggested that advisors provide clients with a quote to Mexico even when they say they'd prefer not to visit Mexico -- the value could sway their decision.

Kate Murphy, president of Wings Travel Group in Blue Bell, Pa., suggested advisors visit YesToMexico for resources to share with their clients. According to the site, 94% of visitors said their Mexico travel experience exceeded their expectations. Murphy is on the nonprofit's advisory board.

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