HENDERSONVILLE, Tennessee—Prolonged economic headwinds and the global recession have caused severe declines in leisure and business demands worldwide, and until last week, Mexico’s hotel industry saw declines in line with that of other countries around the world. However, the outbreak of influenza A (H1N1), also known as swine flu, was felt immediately and severely as the accompanying data shows.
The outbreak of H1N1 came at a time when the March hotel demand in Mexico had already declined well over 20 percent from 2008’s performance. We attribute that to the ongoing negative publicity related to gang- and drug-related violence that has ravaged the northern part of the country.
Mexico in April is a strong destination for spring break, and the continued reporting on cross-border violence certainly hurt Mexican tourism. The outbreak of H1N1 only added to the dreary outlook of Mexico’s hotel industry.
Our data shows that that demand dropped by well over 50 percent in the last days of April and the first days of May. Year-over-year occupancy dropped 64.7 percent on 1 May. These drops in demand are the sharpest demand drops Mexico has experienced year to date and the rapid drop resembles the data we observed in the 2001-2002 time frame in the United States.
As of this writing, the Mexican authorities have offered assistance to tourism-related businesses and workers to ease the impact. But it is likely that based on this sharp decrease the fallout from the flu will cause industry illness for months to come.
It will be up to the regional and local authorities to communicate that their areas are safe and open for business to entice international travelers to return to Mexico. It will be interesting to observe how room rates in the traditionally strong summer months will hold up and when American leisure travelers feel safe again to go south of the border.
