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Tourism sector is staying afloat, but with warning signs

MND Staff
By MND Staff
1
Beach sunset
Mexico's beautiful beaches, such as Pie de la Cuesta in Acapulco, Guerrero, have been a traditional lure of foreign tourists, but it's their appeal to Mexican residents that's been keeping the tourist industry afloat lately. (Carlos Alberto Carbajal / Cuartoscuro.com)

While Mexico’s tourism industry’s fragile balance is largely supported by the vitality of domestic travelers, official statistics reveal troubling signs concerning foreign visitor spending and tourism service performance.

According to INEGI’s Quarterly Tourism Activity Indicators (ITAT) — a report that does not include data from the World Cup — tourism Gross Domestic Product (GDP) fell by 0.8% in the first quarter of this year compared to the previous period.

cruise ship
Fewer foreign tourists are arriving in Mexico and those who do come are spending less, according to a report by INEGI, Mexico’s official statistics agency. (Cuartoscuro.com)

In year-on-year terms, growth is virtually nil, at a mere 0.1% compared to the same quarter of the previous year.

Following the same trend, domestic tourism consumption fell by 0.7%, with INEGI, Mexico’s official statistics agency, explaining that the decline in tourism GDP was driven by the services sector, which dropped 1.1% between January and March.

This decline dovetails with a general contraction in national GDP during the same period, worsening the outlook for tourism-related services.

Meanwhile, the production of goods linked to tourism activity painted a slightly more optimistic picture, rising by 0.3% quarterly and 0.7% annually — meaning that even though spending on services is slowing down, purchases of certain goods remain resilient, though not enough to reverse the overall decline in tourism GDP.

The most striking figure is the behavior of inbound tourism consumption — spending by foreign visitors in Mexico — which plummeted by 5.9% quarter-over-quarter and 18.4% year-over-year.

Just last month, INEGI revealed that even though Mexico received a whopping 8.36 million international travelers in May, total visitor spending fell by 0.6%, while average spending per tourist slipped 4.9%, from US $626 to $596.

In contrast, domestic tourism consumption — spending by residents traveling within the country — showed positive performance, rising 0.5% compared to the previous quarter and 5.4% year-over-year.

This trend suggests that, while domestic tourism remains resilient, the country’s appeal to foreign tourists slowed down significantly during the first three months of the year.

With reports from Milenio and La Jornada

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