By Enrique de la Madrid Cordero, Secretary of Tourism, Secretariat of Tourism of Mexico.
In the context of worldwide economic slowdown, governments face significant challenges in promoting the development of their economies. At this juncture, Mexico has found in the tourism industry a competitive activity that has achieved higher growth rates than other sectors, helping to mitigate the adverse effects of economic slowdown and turning this activity into a true development engine for the economy.
Tourism crosses many industries and integrates a variety of services and related activities from other sectors. Therefore, its impact on the national economy, job creation and welfare of the population are significant. This article describes the recent results of the tourism activity in Mexico and their relative importance in the national economy.
In the past few years, Mexico’s tourism industry has experienced an historic growth that has consolidated its leading role as one of the most visited countries in the world and the second most visited country in the Americas, turning tourism into a key driver of the country’s economy and a fundamental ingredient in achieving its objectives of social and economic development.
Thanks to an approach that includes a new institutional and normative framework which has facilitated greater coordination among levels of government, federal agencies and the private sector, the tourism industry has positioned itself as one of the most competitive sectors in the Mexican economy, accounting for 8.7 percent of the country’s gross domestic product (GDP) and a total of nine million jobs.
At the international level, in 2016, the industry reached a new historical high of 35 million tourists, a fifty percent growth in the last four years, and three times the world rate during the same period. This growth of 11.6 million travelers in just four years is equivalent to the combined number of tourists visiting Brazil and Argentina.
In the last four years, we have consolidated our position in the United States, our main market. Before 2013, Mexico received 14 out of every 100 American tourists who traveled by plane; we currently receive 18 out of every 100, the largest share in history.
In 2016, the flow of tourists from the United States grew by 12.1 percent compared to 2015, with a total of 9.6 million visitors. Mexico needs to keep a strong position in the American market, a key component of our competitiveness. Nevertheless, it is equally important for us to diversify our markets.
In that regard, we have seen a 24 percent increase in the arrival of European visitors over the past four years, 70 percent of those from South America, and doubled the arrival of Asian visitors.
It is important to highlight that travel and tourism are a big part of the economic integration between Mexico and the United States. Mexico is the second largest tourist market for the United States, representing 24 percent of tourist arrivals to the U.S. and the United States is the major tourist market for Mexico, representing 59.6 percent of all tourist arrivals by air.
Travel and tourism between our nations is an important source of jobs, income, and cultural exchange and an important component of our common goal of achieving strong economic growth.
With almost sixty percent of tourism arrivals by air coming from the United States, the improvement of Mexico´s connectivity with the U.S. plays an important role in our efforts to maintain the good momentum of travel and tourism. This is the reason Mexico promoted a new Air Transport Services Agreement with the U.S. which has provided Mexican and American airlines with opportunities for growth in routes, products and services.
Recently, Aeromexico and Delta Air Lines established a joint venture which allows them to coordinate schedules and pricing on U.S.-Mexico routes and maximize connecting opportunities for the benefit of the customers of both nations. This partnership represents the largest cross-border alliance between Mexico and the United States, and is a clear example of our economic integration.
At the same time, the increased flow of international tourism has had an effect on international tourism receipts. In 2016, Mexico grew 10.4 percent, reaching the historically high figure of $19.6 billion.
International tourism receipts are important for the economy; they represent earnings generated from expenditures by international visitors on accommodation, food and drink, local transportation, entertainment, shopping and other goods and services.
International travel is not the only travel that has expanded in Mexico—domestic tourism, which represents 85 percent of the total tourism consumption—has increased considerably in the last years. The Mexican government launched a national strategy to boost domestic tourism, built around contributions of the private sector such as airlines, travel agencies, hotel groups, travel sites and other groups in the form of discounts, packages, trips, flights and other products.
In 2016, domestic tourism reached the historical record of 90 million Mexican tourists visiting other areas of the country. This is important for sustaining local economic growth and creating much needed employment and development opportunities.
These results have solidified the tourism industry as an engine of Mexico’s economic growth, generating employment and well-being for many regions of the country. In a context in which other traditional sectors of our economy undergo periods of deceleration, tourism remains a growing industry that is pushing the rest of economic activity.
In 2015, for example, while overall GDP grew 2.6 percent, tourism GDP increased 3.6 percent. And, considering that, as of the third quarter of 2016, tourism GDP grew 4.3 percent, and the whole economy grew 2.3 percent throughout the year, we expect results similar to happen in 2016. In fact, the sector has been growing at a faster rate than the economy for the last six consecutive quarters.
Jobs generated by tourism also grow at a faster rate than in other sectors. In the last decade, the average annual growth of tourism employment in Mexico was 2.8 percent, more than twice as in manufacturing, the primary sector and commerce. In 2016, employment in tourism registered a 3.9 percent growth, more than twice than in the rest of the economy.
By generating investment, employment and business opportunities for small, medium- and large-sized enterprises; boosting the transformation and renewal of tourist destinations; reducing gaps in infrastructure, public services and communications, tourism has undoubtedly become one of the most effective means for our country’s development. This is particularly true for some regions in Mexico, like Quintana Roo or Baja California Sur, where tourism activity has transformed their communities by providing jobs, generating income, diversifying the economy and protecting the environment.
As a result of the impressive growth in the travel and tourism industry, Mexico´s government has established the tourism industry as a priority and is determined to maintain its competitiveness through policies and programs that include investment and credit facilitation; the development of new tourism segments; a more strategic promotion; infrastructure projects; quality services; market diversification; and full coordination between public and private sectors and local communities.
With better quality and a wider variety of tourism products and destinations, Mexico is more prepared today than ever to welcome international tourists.
