Drug violence has shaken Mexico to the core during the past several years. In its last official update of the death toll in January, the Mexican government said 34,612 people were murdered since December 2006, or approximately 18 people per day, according to the BBC, which estimates total murders now number more than 40,000.
Throughout this run of violence, hotel officials in Mexico have told me that while the situation sounds bad, much of the violence was centered in northern Mexico, while the resort coastal areas of the country, home to luxury properties, were largely unaffected.
Now, though, it appears the drug violence is spreading south.
Lost in the Hurricane Irene headlines a few weeks back was news that the Casino Royale in Monterrey was the site of an arson attack that claimed at least 52 lives, according to a report in The Guardian.
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According to July data from STR, the parent company of HotelNewsNow.com, hotel performance in Mexico is mixed. Year-to-date through July, occupancy was up 4% to 58.8%, average daily rate fell by 1.6% to MXN1290.61 (US$97.50) and revenue per available room edged up 2.3% to MXN758.62 (US$57.31).
Speakers during last month’s Global Congress on Legal, Safety, & Security Solutions in Travel in Houston acknowledged an increasing level of nervousness regarding the situation in Mexico.
“Right now, Mexico is keeping me up at night,” said Brad Bonnell, director of global security at InterContinental Hotels Group. “It is beginning to affect business. Our business is suffering terribly there.”
VP and assistant general counsel for Marriott International
Even before the latest attack, hotels were feeling the aftershocks from all the violence. Brenda Durham, VP and assistant general counsel for Marriott International, said her company’s performance in the country has been on a downward trajectory for much of the past decade.
She said Marriott’s Mexico revenue is one-third what it was seven or eight years ago. The reason for the decline, Durham said, is because travelers perceive the country as being wholly unsafe.
Travelers’ perception of a particular property is obviously key in the hotel industry. It will be interesting to note how luxury properties—and travelers—react to the spreading threat of violence in Mexico.
At least one hotel company remains optimistic, as today's America's news pulse story on HotelNewsNow.com shows. Hilton Worldwide has opened the 167-room Hilton Garden Inn Tuxtla Gutierrez. We'll see just how many companies opt to follow suit depending on how much further the violence in Mexico reaches.
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