Mexico is one of the most visited tourism country in the United States. Its beautiful beaches, low priced commodities, and warm citizens encourage a large number of tourists from nearby countries to spend their vacations in different places of Mexico. Mexico’s tourism agency estimates that approximately 18. 3 million tourists visited the country during 2008 for various purposes. The most visited destination is Cancun with about two million tourists spending their vacation in the town’s wide beaches (Karantzavelou).
Other tourists prefer to stay in Mexico’s border regions while spending their leisure activities. Next to oil industry, tourism industry is the second major source of income in Mexico which account for more than $10 billion revenue. In 2008, Mexico’s revenue from tourism industry reached 13. 2 billion, which is 3. 5 percent higher than tourism revenue in 2007 (EFE). As reported by Paterson in Americas Program Report: In Mexico tourism rakes in about $83 billion annually and helps support 2. 4 million jobs, according to the federal Secretariat of Tourism.
Foreign travelers account for nearly $13 billion of the tourist revenue, so fewer foreign travelers translates into economic pain. Tourism generates more money than the maquiladora export industry or remittances sent home by U. S. -based migrants. Recently, there have been issues that Mexico’s hospitality industry has declined due to drug-related crime and violence that became prevalent in the country. News about kidnapping, killings, and drug wars has caused tourists to be wary of traveling and staying in Mexico. U. S.
Travel advisories caution citizens from nearby countries about the crimes and violence that are rampant in Mexico. Businesses such as hotel services, restaurants, and other tourist related enterprises purportedly shut down their operations because of drug cartels’ extortion and the decrease in revenue from the tourism business. Thus, the purpose of this paper is to analyze the impacts of drug wars on Mexico’s hospitality industry and to examine the responses made by the republic and tourism industry to address the drug-tourism related problem. Mexico’s Profile
Mexico is located in the Middle America, neighboring the Gulf of Mexico and the Caribbean Sea, amid United States and Belize and adjoining the North Pacific Ocean, connecting Guatemala and the United States. It has a total area of 1,972,550 square kilometers composed of 1,923,040 square kilometers land area and 49,510 square kilometers water area. The land area is composed of mountains, plateaus, coastal plains, and deserts. Oceans and beaches surround most of Mexico’s land, making it the most visited country during summer. The country’s climate varies from tropical to desert.
The country’s estimated population is at 111,211,789 which is divided into young population aged 0 to 14 at 29. 1 percent, adult population aged 15 to 64 at 64. 6 percent, and old population aged 65 and over at 6. 2 percent. People living in Mexico are known as Mexicans. The country’s ethnic groups include 60 percent American-Spanish mestizo, 30 percent Amerindian, 9 percent Whites, and 1 percent for a mixture of other races (Central Intelligence Agency). Composed of 31 states and one federal district, Mexico is a federal republic.
In terms of economy, Mexico employs a free market economy dominated by different industries and agriculture mostly owned by private businessmen. Food and beverages, consumer durables, clothing, textiles, mining, tobacco, steel and iron, motor vehicles, chemicals, and tourism comprise Mexico’s industries. The countries agricultural products, which are marketed locally and internationally, are rice, wheat, corn, coffee, cotton, beans, soybeans, tomatoes, fruits, dairy products, poultry, beef, and wood products (Central Intelligence Agency [CIA]) Developments in Mexico
Earlier, Mexico was perceived to have difficulties promoting their country as a tourist destination. Infrastructures are not tourist-friendly. Transportations are inaccessible in many places of the country. Tourism activities and projects are scarce not until the National Tourism Fund was established. In addition, inflation and recession are among the common economic problems of Mexico. In the past years, peso always performed short against the U. S. dollars, thus making it hard to build more industries, create more jobs, and advanced export products.
In the 1940s, Mexicans saw the transformation of their country from revolutionary reform to economic modernization and industrial transformation. Private investment in construction, textiles, steel, electricity, and tourism considerably contributed in the achievement of such transformation. In 1950s and 1960s, the political leaders welcomed the establishments of automotive plants like Ford and General Motors. Chalco, Texcoco, and Toluca Valley became industrial zones. The agriculture sector also flourished thus attracting some foreign investments.
The complete urbanization of Mexico occurred during the last years of the twentieth century. The growth in industries created more jobs for Mexicans (Coerver, Pasztor, and Buffington 289). Infrastructures such as roads, railroads, and airlines had developed to help boost tourism. The National Tourism Fund allocated financial support for variety of tourism projects and activities. The government also sponsored resort development projects to enhance tourism which would generate job opportunities for Mexicans (Coerver et al. 505-506).
Currently, the tourism industry of Mexico is experiencing growth and expansion as many tourists prefer to spend their holidays in the beach country. Many foreign businessmen found Mexican real state a good business investment. They focused on building hotels in nearby beach resorts wherein tourism is the major source of profit. As Michael Owen wrote, “Numerous opportunities exist for construction or renovation of hotels, office buildings, and shopping centers located in commercial centers in the interior away from the principal attractions of Mexico.
” To encourage tourism and to boost the economy, the present administration headed by President Felipe de Jesus Calderon implemented different development projects in the areas of telecommunication, airports, railroads seaports, natural gas distribution, and electricity generation. Due to the imposition of free trade agreement, Mexico’s trading with the United States, European nations and some Asian countries enclosed approximately 90 percent of trade under the accord which in turn provides more profit for the country (CIA).
At present, the country is facing many issues and problems (including the issues of drug wars and swine flu spread) which continuously hurt the country’s economy. In spite of these, the administration is generating different programs to upgrade the country’s infrastructures, boost tourism, encourage private investments, and modernize labor laws. President Calderon stated that among his economic priorities include job creation and poverty reduction (CIA). Mexico: A Drug Producing Nation
Mexico is known as a “major drug-producing nation” (CIA). In 2007, an increase in opium poppy cultivation was observed. With 6,900 hectares allotted for its cultivation, estimated production yielded to more of less “18 metric tons of pure heroin, or 50 metric tons of black tar heroin” (CIA). In the same year, marijuana cultivation also escalated to 8,900 hectares, producing approximately 15,800 metric tons (CIA). Moreover, approximately 90 percent of the cocaine movements from South America towards United States find its stopover in Mexico.
With such production, Mexico has been regarded as the “transit route for illegal drugs” wherein a significant number of illegitimate businessmen continuously conduct illicit activities such as drug trafficking, kidnappings, and killings. Numerous drug syndicates are controlling the bulk of drug trafficking all over the State through money-laundering and extortions from different business enterprises. These syndicates are the major ecstasy producer and distributor both locally and internationally.
As the CIA wrote, Mexico’s syndicates are the “major supplier of heroin and largest foreign supplier of marijuana and methamphetamine to the US market. ” Travel Alert: Crime and Violence in Mexico Over the years, Mexico has been known for its “export paradise. ” The government utilizes the country’s beaches, ruins, cities, people, and weather to encourage tourists which could lead to job creations, regional progress, foreign exchanges, and economy development (Clancy 1). On the other hand, Mexico has also been regarded as a drug producing country (CIA).
Recently, news releases about drug war activities in the country’s border regions are perceived to hurt Mexico’s hospitality industry. In fact, the United States’ Travel Advisory, which was released in February 20, 2009, warns all the U. S. citizens who travel and live in Mexico to be extra careful and take more precautionary measures while staying within the country. The travel alert was drawn due to increased incidences of crime and violence believed to be connected with drug cartels’ activities.
An excerpt from travel advisory states the following: “U. S. citizens traveling throughout Mexico should exercise caution in unfamiliar areas and be aware of their surroundings at all times. Mexican and foreign bystanders have been injured or killed in violent attacks in cities across the country, demonstrating the heightened risk of violence in public places. In recent years, dozens of U. S. citizens have been kidnapped across Mexico. Many of these cases remain unresolved. U. S.
citizens who believe they are being targeted for kidnapping or other crimes should notify Mexican officials and the nearest American consulate or the Embassy as soon as possible, and should consider returning to the United States. ” (U. S. Bureau of Consular Affairs) U. S. citizens who take this alert seriously will automatically not pursue their travel to Mexico for leisure, business, and other purposes. Aside from the travel alert, hyped media reports about crimes and violence in Mexico are also believed to discourage foreign citizens to stay in the country.
As for most Mexicans, the media had worsen the fear of tourists from other countries thus preventing them to visit or stay in Mexico’s numerous tourism destinations to spend holidays, vacations, and other leisurely and business activities. Drug Wars and Violence in Mexico There have been numerous reports about the drug wars situation in selected areas of Mexico. Most of these are presented in the news media. Chris Bury of ABC News reported that in Nuevo Laredo, approximately 6,000 trucks bound to United States carry marijuana, cocaine, and methamphetamine packed inside most of Mexican export products.
Thus, it is likely that drug wars and drug-related violence are prevalent in this Southwest border of Mexico. Bury also reported that around 170 people were killed in Laredo in 2005 which include 13 police officers, a city’s police chief , a city councilman, and a newspaper reporter. There are also reported kidnapping and ambush incidences where most victims were American tourists and local citizens. As a consequence of these incidents, Laredo’s shop owners shut their business; bars and cafes are empty, and tourists are nowhere to be seen (Bury).
In Acapulco, beheadings, shootings, and killings by alleged drug smugglers are reportedly rampant in 2007 according to the Associated Press (AP, “Drug Violence”). In one of the shooting incidents at two different police stations, two secretaries and five police investigators were killed. Another reported incident involved firing of bullets at two Canadian tourists who were staying inside a hotel lobby. In addition to this, the Associated Press reported six beheadings in Acapulco wherein the victims were mostly police officers.
Investigators identified that most of the violent activities in the city are related to drug cartels disputes (AP, “Drug Violence”). To summarize the reports, it has been identified that among the places where drug wars and violence are prevalent include Ciudad Juarez, Nuevo Laredo, Mexicali, Rosarito and Tijuana (Bock). These Mexico’s border territories are believed to be the drug routes that producers and distributors used not only by those inside the country but mostly by those in the nearby countries, particularly the United States. Other affected cities and towns include Acapulco, Michoacan, Chihuahua, Durango, Nogales, and Matamoros (U.
S. Bureau of Consular Affairs). In 2005, there were more than 1,300 victims executed in drug wars and related violence (Bock). Two years later, the number of casualties more than doubled, with approximately 2,700 cases of killings, beheadings, shootings, and executions related to drug disputes between cartels and other drug gangs (Bricker). However, the year 2008 was identified as the worst period of drug wars wherein more than 6,200 cases of drug-related killings were recorded which account for twice the figure in the 2007 reported cases.
Murder incidents during this year include the assassinations of top police commanders while holding an Independence Day celebration. In a report by the U. S. Bureau of Consular Affairs, recent confrontations of Mexican police and army against drug syndicates are indicated to have worsened the drug-related incidents. Drug cartels resorted to employing grenades and other automatic weapons to combat the officials. Large firefights between combatants and drug cartels occurred in cities and towns such as Ciudad Juarez, Tijuana, Mexico City, and Chihuahua City (U. S. Bureau of Consular Affairs).
As a result of these incidents, the Bureau restricts U. S. citizens to stay in those areas. As stated in the travel alert: The US Mission in Mexico currently restricts non-essential travel within the state of Durango and all parts of the state of Coahuila south of Mexican Highways 25 and 22 and the Alamos River for US Government employees assigned to Mexico. This restriction was implemented in light of the recent increase in assaults, murders, and kidnappings in those two states. The situation in northern Mexico remains fluid; the location and timing of future armed engagements cannot be predicted. (U. S.
Bureau of Consular Affairs) In addition to this, the Consular also reported a dramatic increase in crime activities such as car jacking, thefts, homicides, and robberies in towns of Mexico particularly in Tijuana. Public shootouts during day hours are notable in Nogales, Ciudad Juarez, and Tijuana, particularly in shopping centers and other public establishments. In addition, criminals are reportedly harassing tourists traveling in their cars along Tijuana, Matamoros, and Nuevo Laredo (U. S. Bureau of Consular Affairs). The Bureau particularly pointed Ciudad Juarez as the most dangerous town where crimes are rampant.
In the town alone, approximately 1,800 people were murdered; over 17,000 car thefts were reported; and an estimate of 1,650 car jacking incidents were identified in 2008. Moreover, the U. S. Consulate General heightened the warnings for holders of U. S. visas. The Consular stated that “U. S. citizens should pay close attention to their surroundings while traveling in Ciudad Juarez; [they should] avoid isolated locations during late night and early morning hours and remain alert to news reports. A recent series of muggings near the U. S. Consulate General in Ciudad Juarez targeted applicants for U.
S. visas” (U. S. Bureau of Consular Affairs). Effects of Drug Wars in Tourism and Business Enterprises During the past years, many economic analysts perceived that investments and tourism revenue in Mexico had declined. The two major reasons of the decline are blamed to increasing incidents of drug wars, crimes, and violence and to the negative publicity made by the media. In some of the Mexico’s borders where drug cartels are rampant, many business establishments had shut down due to these drug cartels’ extortion. As reported by Reuters (“Drug War Strikes Blow”): Some U. S.
investors have pulled money out of Mexico worried that drug cartels are overwhelming security forces, and a recent study by the United States Joint Forces Command said Mexico could be at risk of a “rapid and sudden collapse. ” In Mexico's border states, where violence has been the most intense, business people say that on top of a collapse in exports to the United States and falling domestic sales, some are forced to pay protection money to gangs. Among the businesses affected include travel enterprises (which book tourists’ flights, hotel accommodations, and other services), hotels, nightclubs, and restaurants.
Even the local markets of the tourist-towns in Mexico are found to have decreased in sales because of the decline in the number of tourists visiting the market. Travel Business One of the affected industries due to violence along Mexico’s borders is the travel business. Debra Fassold, owner of a travel agency that serves tourists who wish to travel to Nuevo Progreso, Matamoros, and Mexico cities, disclosed that the company’s revenues decreased by approximately 40 percent due to the drug wars and the negative press releases about the country.
As Fassold stated, “Any time that the government posts one of those advisories, the warning flags go up for the traveler” (San Antonio Express News). Hotels and Resorts As one of the top tourist destinations, Mexico is packed with numerous hotel establishments where tourists can settle to enjoy the country’s beaches, nightclubs, restaurants and other tourist spots. During the years when drug wars were not yet as rampant today, these hotels were fully occupied during the spring months. In 2005 and 2008, hotel occupancy declined due to reports of rampant drug wars, violence, and crimes.
Guelaguetza, one of the most occupied hotels in Mexico, reported that during the periods of violence, hotel occupancy fell by 70 to 80 percent during the Easter holidays which is quite low compared to the quiet years when occupancy was full especially on Easter holidays. Karisma Hotel, with seven branches in Mexico, shared that their business was down by 20 percent due to travel alert and the threat of drug-related violence (Writers Write, Inc. ). Resorts like Westin Puerto Vallarta and St. Regis noted that their bookings had dropped by 15 percent after the release of the U.
S. travel advisory warning the citizens about the rampant violence and crimes in Mexico. Securities in many resorts and destinations were implemented; thus, tourists are often confronted with military checkpoints and police check (Writers Write, Inc. ). Nightclubs and Restaurants Due to the warnings that spending night activities outside hotels, dormitories, and houses is more dangerous, the nightclubs where college partygoers often spend their leisure time have also been affected by drug wars activities, travel alert advisories, and bad media publicity.
Nightclubs located down the Avenida Alvaro Obregon which often attract a large number of college spring breakers (“approximately 20,000 to 30,000 each March”) reported a considerable decline in the number of college visitors. Valelie Pizzuto, Mexico Chamber of Commerce tourism representative, stated that in 2007, there were more or less 1,000 college tourists who visited nightclubs located in the said area (San Antonio Express News). According to some business owners, restaurant revenue coming from tourists has declined by 50 percent.
Tourists who used to go out at night to eat in different restaurants located in Ciudad Juarez, Tijuana, and other border cities have decreased dramatically. This is due to warnings that nightlife in these locations is more dangerous as drug wars, shootings, and killings are widespread (Emmott; Reuters, “Drug War Strikes Blow”). Tourism representatives in San Antonio Express News add, “Tourism growth by number of visitors in Mexico has been flat in recent years. Total international tourists peaked at 21. 9 million in 2005 but have hovered around 21.
4 million each of the past two years. ” Government and Popular Responses to Drug War and Tourism Problems Knowing that Mexico had been tagged as major-drug-producing nation, the past administrations had taken different actions to eradicate the cultivation of illegal crops such as marijuana and cocaine. The Mexican government allocated billions of budgets for the implementation of “illicit-crop eradication program” (CIA). Military and police security agents were deployed in many areas of Mexico with a great number positioned in the country’s borders.
The local government also advised local residents, travelers, and tourists to avoid staying out during nights as much as possible. This advice was made based on the observation that crime and violence are rampant at night since drug transactions usually take in place during such hours. In addition to this, President Calderon urged the United States to take responsibility on the incidents of drug wars since most of the drug consumers come from America. Also, the president strengthened the campaign against money laundering of drug cartels to Mexican officials. As expressed in one of his interviews:
The goal now is to turn what is a national security problem into one that can be handled by law enforcement. That alone is a tall order since the cartels have infiltrated governments and police forces throughout Mexico, paying officials to protect their illicit business. (qtd. in Lacey) In the part of the United States, many U. S. universities prohibit their students who want to spend spring breaks in Mexico (Tourism-review. com). As Ken Ellingwood wrote, “The University of Arizona has warned students to take extra care if traveling to Mexico during spring break because of a marked increase in violence recently.
” The State even issued travel advisory (together with Germany, Italy, France and Canada) which alerted citizens about visiting Mexico where drug wars and other related crimes killed a large number of people (Rodriguez). Since the drug wars and other related violence gave negative publicity to the country, Mexican officials have been employing different activities to counter the bad image that has hurt the tourism industry. They continuously draw and disseminate advertisements and press releases promoting the country’s resort cities and other tourist destinations.
As Mexico Tourism Board Director Martin Gonzalez expressed in an interview, “The effort has mainly been a P. R. effort. We have been trying to explain the situation and try to portray not only the bad things but the good things that are happening there” (AP, “Tourism Strong Despite Violence”; Chronicle). They also started promoting Mexico’s tourism destinations in countries like South America, China, and Russia (Paterson). Political leaders together with tourism officials developed more tourism theme parks to draw attraction from visitors.
They also carved new travel routes such as Green Coast, heart of Mexico, Route of Gods, and Magic Pueblos which turned out as “colorful-sounding itineraries” (Paterson). Moreover, the state government has allocated tourism budget for an activity offering free rides on selected modes of transportation where visitors can have free trips in Mexico City’s tourist spots. The state government also upgraded traditional facilities in leisure parks and carnivals that are sites for most fairs.
In addition, Mexican officials have promoted festivals such as guitar festival in Acapulco to push hotel occupancies (Paterson). Businessmen, particularly hotel and resort owners, have appealed to the public through the use of news media that Mexico’s tourist destinations are safe for travelers and visitors. Jorge Apaez, president of Inter-Continental Hotel in Mexico, said that although they recognize the issues relating to drug violence in the country, generalization of such event would really hurt the tourism industry.
He has appealed to foreign tourists that tourist destinations in Mexico are safe, and hotels and resorts have securities to safeguard visitors (Chronicle; Karantzavelou). In Cancun, image promoters have employed a novel tactic with this catchy statement: “Don't mention what country it’s in. Officials say they will downplay Mexico in advertising the beach zone, which has been relatively untouched by the violence” (Ellingwood) Meanwhile, Mandy Chomat, marketing vice president of Karisma Hotels and Resorts, has communicated with college students through TravelAgentCentral.
com in an effort to reduce their worries about the conditions in Mexico. In an online article, Chomat expressed that Mexico, particularly Acapulco, has strengthened security measures to protect tourists visiting the country. In addition, the Acapulco Destination Marketing Office announced that an agreement was drawn between Acapulco City Hall, Mexico Attorney General, and Guerrero State Government which ensures the safety of students and other visitors who want to spent spring vacations in the city (Yancey).
These measures seem to be effective as the number of tourists visiting the Mexico’s beaches and ancient ruins rose to 4 million for the months of January and February 2009, which is 13 percent higher compared to recorded tourist visits last year during the same period. Increase in visits despite travel alerts by neighboring states is regarded with high importance by the country’s tourism industry (Reuters, “Tourism Strong Despite Violence”; Trotta). One of the identified reasons for choosing Mexico as a tourist destination despite drug violence is attributed to the U.
S. recession. One of the tourist officials exclaimed that since Mexico is a cheap tourist destination, neighboring citizens would prefer to spend holidays here than in other destinations which could be more expensive. The weakening performance of peso against U. S. dollar has encouraged tourists to carry out their traditional visits in Mexico (Trotta). If the government and tourism industry’s campaign, tourism promotion, and other related activities would continue, more and more tourists are expected to visit the country this year. Summary and Analysis
Tourism is indeed one of the major sources of profit for local businessmen and source of revenue for a country. It is a source of profit for local businessmen, for tourists are additional customers who happen to be better spenders compared to local consumers. It is a source of revenue for a government since tourism could encourage investments from visiting foreign investors who are looking for feasible business sites. In the case of Mexico, the State regards tourism as the second source of revenue since tourist destinations in the country encourage 13 million to 20 million tourists per year.
This is relatively huge as compared to other tourist destinations around the world. Thus, it can be inferred that Mexico highly depends on North American market, for if the number of tourists visiting the country declines, then it could be detrimental to the country’s economy since Mexico is earning up to $83 billion from the tourism industry. During the first years when the news about the increase in drug wars, crimes and violence alarmed the neighboring countries, tourist visits had decreased which in turn affected the economy of the country.
Tourists, particularly from the United States, were prevented by their governments to visit Mexico. Travel alerts have been issued. Many businesses have shut down due to extortion and fear of becoming victims of different drug-related violence. Other businesses which are highly dependent on tourist spending have closed down because they could not generate profits from local consumers. Prospect investors did not continue establishing their business in Mexico due to fear that they would likewise be exposed to violence and negative publicity. Many people blamed exaggerated media coverage about drug wars and violence.
Yet, such situations were apparent only during the first periods. The Mexican officials, business sectors, and tourism industry have taken countermeasures to cope up with the situation and counter the drug violence and negative publicity against Mexico. The State government has deployed military and police security in many areas affected by drug wars and violence. Even the president of the republic has coordinated with U. S. officials to combat drug syndicates believed to be nesting in the State since most of the cartels’ consumers are Americans.
In many tourist destinations, security personnel in casual dress have been organized in order to assuage the visitors’ fear and keep them safe from threat and violence. Hotel officials have cooperated with the government to ensure the safety of their guests. Moreover, the tourism industry continuously disseminates advertisements and press releases promoting the different tourist destinations in Mexico. They even utilize the Internet to communicate with foreigners who wish to visit the country but are hesitant due to the threat of violence and drug wars.
Some establishments even offer free rides for tourists. Despite the violence and negative publicity, Mexicans are optimistic that with continuous effort of the government and tourism industry, they could end the drug-related violence and gain positive publicity which would encourage more tourists in the coming periods. Conclusion and Recommendation Tourism industry is indeed one of the major sources of revenue for Mexican government and private sectors. The effect of drug wars and other drug-related violence could not be regarded as an isolated case affecting the industry.
There are also other cases and issues that serve as threats to the industry which could be in the form of natural calamity or epidemic. The industry should always be ready for the possible consequences of such problems. With the continuous development of facilities and activities being implemented by the government and tourism industry, this business is likely to grow in the coming periods. However, although tourism has become a key contributor to the progress of the Mexican economy, the government should also develop other local industries that could replace tourism as top source of revenue.
This is encouraged to avoid too much dependence on the North American market where most of the tourists come from. Nevertheless, it cannot be denied that tourism is crucial in the development of other industries that are present in the country. Works Cited Associated Press. “Drug Violence Threatens Mexico’s Tourism. ” MSNBC. 7 Feb. 2007. 5 May 2009. <http://www. msnbc. msn. com/id/17018294/>. ---. “Mexico: Tourism Strong Despite Violence, Economy. ” Khou. com. 4 Mar. 2009. 5 May 2009. <http://www. khou. com/topstories/stories/khou090304_mp_tourism-strong-mexico. 3829ecc. html>.
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