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Mexico Launches Fight To Lure Back Tourists
The Washington Diplomat / June 2009

By Larry Luxner

Free massages. Complimentary suite upgrades. Deep discounts on airfare. A personal trainer at no charge. One hotel association is even offering a "flu-free" guarantee: guests who contract the A-H1N1 influenza virus while staying at any of 20 participating resorts will automatically receive their next three vacations on the house.

It's all part of efforts by Mexican hoteliers to bring back tourists — especially American tourists with dollars — who in the wake of the latest flu outbreak and travel warnings have been avoiding Mexico like, well, the plague.

From Los Cabos at the southern tip of Baja California to the Caribbean resort of Cancún, hotel lobbies and beaches are virtually empty, even though Mexico City has been the focus of most H1N1 infections and related deaths.

"We've really been slaughtered," said Ella Messerli, general manager of the 237-room Marquis Los Cabos and vice-president of marketing at the Los Cabos Hotel Association. "Last May, we had a monthly occupancy rate of 62 percent. Right now we're running at 22 percent."

Manuel Paredes is executive director of the Riviera Maya Hotel Association, which speaks for 359 hotels that have a combined 37,200 rooms. He says occupancy is only at 20 percent when it should be more like 70 percent.

"We don't have a single registered case of swine flu anywhere in the Riviera Maya," he complained in a phone interview with the Diplomat. "Even so, it's had a huge effect on us. In general terms, the situation in the tourist sector is very grave."

Paredes, reached by phone in Cancún, said that since the A-H1N1 influenza outbreak in mid-April, "our first priority was to guarantee the health of our visitors and employees. Secondly it was to assist our workforce so there wouldn't be economic repercussions. And now we're working to prepare an aggressive campaign that will begin once all the warnings are lifted. But until then, we're not going to do much."

On May 15, the Centers for Disease Control in Atlanta official downgraded its travel warning for Mexico to a "travel precaution." Great Britain has also lifted its health warning, and nearly all countries except Cuba have resumed direct flights to and from Mexico.

Eduardo Chaillo, director of the Mexico Tourism Office in Washington, said his country has seen the worst, but that things are now gradually improving.

"We ask travel agents every day, so we know that the percentage of cancellations is going down drastically," Chaillo told the Diplomat. He said that in May, 48 percent of existing bookings were cancelled in the wake of the flu scare — but that for June and July, cancellations are only 35 percent, and for the last three months of 2009, only 20 percent.

"Things are obviously improving, and everyone recognizes the way the Mexican government handled the spread of this disease so well, so of course now we have to take advantage of that position," he said.

In mid-May, Mexican President Felipe Calderón announced extraordinary fiscal and financial measures to help reactivate the country's tourism industry — which was already suffering because of drug-related violence along the U.S.-Mexican border.

Among other things, the government is allocating $165 million for tourism promotion, slashing airport and cruise-ship port fees by 50 percent, and cutting management quotas paid to the Mexican Institute of Social Security by 20 percent.

In a press statement, the Mexico Tourism Board said it's unfair to accuse Mexico of overreacting and for taking immediate, effective actions

"The Mexican government has acted magnificently in regards to this health crisis," said Emilio Botin, president of Grupo Santander, a leading bank. "Their actions have been phenomenal, very different from past incidents where action was pobably not as quick. But in this occasion, fast action was taken with real organized measures, and the counry will come out of this crisis a lot sooner than expected. The virus will not affect Mexico's economy in the long term."

According to Chaillo, 22.8 million foreigners visited Mexico last year, of which the United States accounted for 18 million, or around 80 percent. By region, the largest source of U.S. visitors is California, followed by New York and the Midwest.

Tourism contributes 8.2 percent of Mexico's GDP and is the country's third-largest source of foreign exchange after oil exports and family remittances. The sector provides direct employment for 2.2 million Mexicans, and indirect employment for millions more.

Chaillo said about 1.2 million Americans visited Mexico for business at least once during the past three years, accounting for 17.6 percent of all U.S. visitors to Mexico. More than half of these people extended their trips by adding time or bringing along a companion other than a business associate.

While individual hotels haven't gone out of business because of the latest flu epidemic, said Chaillo, "some chains consolidated their operations. For example, the Sol Meliá group, which has four or five properites in the Riviera Maya, kept only two of them open in order to save money."

In an encouraging development, he said, 93 percent of the meetings and conventions that had been scheduled prior to the outbreak of Influenza A-H1N1 were simply rescheduled rather than cancelled.

"This shows loyalty to the country," Chaillo noted, adding that "we have a plan, and it's in phases. The first phase has to do with public relations. We don't have an advertising plan right now, because the secretary of tourism thought that having one now would be useless because of the CDC warning," he said.

"In Phase II, which is a little more aggressive, we will do fam trips, presentations and destination seminars. In the last phase, when everything is back to normal, we'll launch a big advertising and PR campaign. With the extra funds we'll get from the stimulus package President Calderón is giving the tourism industry, we will relaunch Mexico as a very safe and welcoming destination."

Meanwhile, individual resorts have launched campaigns of their own.

Under the "hotel with a heart" package, travelers booking rooms at Marquis Los Cabos resort in May or June receive a free additional suite and upgrade to private beachfront casitas. The package, which also includes "daily breakfast delivered discreetly each morning via a private alcove," is available through June 31 and starts at $594.

"At this stressful time, we thought people would welcome the idea to get away with family and friends together,” said Messerli, general manager of the resort, which is located at the southernmost tip of the Baja California peninsula. "I think people are sick and tired of being sick and tired, and now they really want a vacation. Since January, they've been told not to come to Mexico."

Messerli said that in 2008, the average room rate in Los Cabos was around $280. In May, hotel rooms were going for an average $140. Nevertheless, she said, "not one hotel has closed. We're all open, though obviously because we're empty, we're turning off the air-conditioning to save money."

The new Grand Velas all-suite resort in the Riviera Maya is offering a "Welcome Back to Mexico Double Upgrade" deal for May and June. Qualified guests paying $300 per person per night for a double suite are automatically upgraded to an oceanfront "ambassador pool suite" with private terrace and pool — a $330 per person per night value.

Guests also receive 15 percent off on spa treatments throughout their stay, and enjoy the services of a personal trainer for free.

Likewise, a select group of hotels — Zoëtry Wellness & Spa Resorts, Secrets and Dreams Resorts & Spas, Azul Hotels by Karisma, El Dorado Spa Resorts & Hotels by Karisma, and Real Resorts — are jointly pushing their "flu-free guarantee" promotion.

The hotel companies are offering guests the ultimate assurance that if they contract Influenza A-H1N1 while staying at any of the 20 participating resorts, they will receive their next three vacations free of charge.

"In collaboration with our valued hotel partners, we determined it was essential to launch this promotion in light of rampant media reports of influenza that exaggerate the virus' prevalence,” said Alex Zozaya, president and CEO of AMResorts, provider of sales, marketing and brand management services for Zoëtry Wellness & Spa Resorts, and Secrets and Dreams Resorts & Spas.

"We felt it was particularly important to address potential fears of traveling to Mexico in support of our valued staff, guests, the tourism industry and Mexico, all of which have been negatively impacted over the past few weeks," said Zozaya. "The 'Flu Free Guarantee' represents our certainty that Mexico is a safe and healthy destination. With this assurance, we aim to restore visitor confidence in Mexico as an ideal vacation escape.”

Guests qualifying for guarantee must have reserved their stays between May 8 and June 30, 2009, for travel taking place between May 8 and Dec. 20, 2009. This applies to new reservations only and doesn't apply to Mexican citizens.

There's another caveat: because there are many strands of H1N1, to qualify for the promotion guests must be diagnosed and classified with Influenza A-H1N1. The guest must provide positive test results, taken within five days of departure from the resort, in addition to the certification of the doctor who performed the test in order to redeem the three free return stays. The guest must also not have been previously diagnosed with Influenza A - H1N1 prior to visiting Mexico.

One unforeseen consequence of Mexico's tourism disaster has been a temporary shift of bookings to the Caribbean.

Asked if this increase is significant enough to close the gap on this year's drop in tourism arrivals, Hugh Riley, interim secretary-general of the Caribbean Tourism Organization, said it's too early to tell.

"This type of temporary dislocation resulting from a sudden or unexpected occurrence is not a new phenomenon by any means. So to the extent that some of our destinations are able to accommodate business that might otherwise have been cancelled, we are happy to welcome those visitors," Riley said in a statement issued from CTO headquarters in Barbados. "We'd much rather have them visiting the Caribbean and enjoying a well-earned vacation than making a decision not to travel at all."

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