The exchange rate hits and the insecurity of national tourism

Mexico City– The strength of the peso against the dollar, lack of promotion and insecurity in the country led to a decrease in the competitiveness of foreign tourism in Mexico, especially from the United States, whose travelers mainly chose to travel to the Caribbean.

According to data from the Anahuac Center for Tourism and Competitiveness Research (Cicotur), foreign tourist arrivals accelerated between 2021 and 2022 and so far this year, only US traveler status is down 14 percent.

Between March and May alone, Mexico received nearly 430,000 fewer American tourists than during the same period last year.

Francisco Madrid, director of Cicotur, explained that the reasons range from issues such as budget cuts to promotion, to the strength of the exchange rate and insecurity in the country.

“The exchange rate has become more expensive, competition has returned to normal, lack of promotion as well as the issue of insecurity,” explained the specialist in the main reasons for the arrival of travelers to the country.

On the parity between the peso and the dollar, Braulio Ursuaga, President of the National Council of Tourism Business (CNET), indicated that the financial plans of the tourism companies were adopted as a reference at an exchange rate of about 20 pesos, which is why the fall of the dollar is already hitting the plans.

“The strength of the pesos has made the tourism product more expensive in our country. The budgets of a large part of the tourism companies have been set at 20 pesos and today we are at 16, 17 pira has been broken, and this difference in budgets is very large.”

And in terms of insecurity, according to the businessmen consulted, the levels are still high and even dangerous.

“The violent events that took place in a large part of the Mexican territory hurt the image and of course the number of tourists who travel and the amount in dollars.

“I maintain that the lack of promotion and insecurity are the main issues, but when we add these reasons that we have, such as increased competition and lack of promotion, it becomes exponential,” he said.

In the case of tourism promotion, Francisco Madrid explained that while destinations such as Las Vegas or the Dominican Republic, with a hotel offer less than that available in Mexico, the promotion budgets allocated here exceed.

For example, Mexico has a 30 million pesos budget for the federal government to upgrade, which includes salary payments. In the case of Las Vegas, with a fifth of the rooms located in Mexico, the overall promotion budget is $176 million.

“The lack of promotion is definitely starting to suffer,” Real Madrid warned.

Both spokespersons agreed that although the US economy remains mired in issues of inflation and economic uncertainty, travelers continue to look for better alternatives outside the country, especially the Caribbean.

“Americans are traveling more than ever before. We’re already seeing more tourists than at the best time before the pandemic, and the question is where are they going,” the specialist asked.