Published on : Friday, October 27, 2017
The airport serving Cabo San Lucas and its lesser-known sister city, San Jose del Cabo, is looking emptier these days. Hotel guests have cancelled 35,000 nights of bookings over the next year.
Many American tourists are staying away, spooked by a wave of violence that comes dangerously close to tourist hot spots. There were quite a few incidents of violence. But the biggest blow came on Aug. 22, when the U.S. State Department issued a travel warning advising tourists to steer clear altogether.
“Group tourism automatically went down the moment the warning hit,” said Carlos Gosselin, head of the hotel association for Cancun and Puerto Morelos. Many insurance companies likely won’t even consider offering coverage in areas under advisory, hurting conventions and events in the area, he said.
Mexico is strengthening security in popular tourist spots to get the State Department to revise its views, and companies including Hilton Worldwide Holdings Inc. and Marriott International Inc. are spending millions to make guests feel safer. Barclays Plc estimates that a drop in tourism could wipe out as much as 0.5 percentage point from Mexico’s gross domestic product growth this year.
Mexico gets about $20 billion a year from tourism. With unfortunate incidents in Los Cabos and Cancun this year, a chunk of that revenue may be at stake. In Los Cabos, local and federal authorities are teaming up with hotels, time-share companies and the airport operator to step up the area’s security.
The group is spending $50 million to increase surveillance cameras to cover the 20-mile main stretch that includes hotels, restaurants and public beaches. A new military facility will be built near a highway to respond to any activity spotted on the cameras. It is set to open in the second quarter of 2018.