Tourism as a Tool for Economic Development and Poverty Alleviation
Mexico is one of the world’s top tourist destinations with more than 22 million visitors every year. Almost one in eight jobs is tourism-related and foreign revenue from the sector ranks third after revenues from oil and remittances. Although the road towards a tourism-based economy has been bumpy at times, the sector has demonstrated its success as a tool for economic growth and poverty alleviation.
That success is largely attributed to the Government of Mexico’s commitment, long-term view, strong leadership and decision-making over the past 35 years.
In the early 1970s the Central Bank of Mexico was faced with the challenge of how to populate certain regions of Mexico, redistribute the country’s wealth and, at the same time, bring in badly needed foreign investment to finance its development. The bank decided to bet on tourism – an industry that at the time was not well measured or understood, but had shown substantial economic and social benefits in some of Mexico’s emerging destinations such as Acapulco and Mazatlan.
This led to the creation of several ‘think tank’ institutions and other bodies that focused on financing and developing Mexico’s tourism sector. It was then decided that these functions should all be placed under the single umbrella of the National Fund for the Development of Tourism (Fonatur).
Mexico has always been well placed to benefit from tourism with its rich history, abundant natural attractions, temperate climate and unique cultural heritage. The country currently ranks 11th in the world in terms of visitor arrivals.Fonatur’s first mandate was to acquire, through expropriation, land reserves in the Mexican Caribbean and Pacific, giving birth to Cancún and Ixtapa. It subsequently built new developments including Huatulco, Los Cabos, Loreto and Litibu.
The strategy was simple in theory: to acquire the land and finance the development, with the help of international agencies, such as the World Bank and the Inter-American Development Bank, and create a world-class master plan, build the infrastructure, invite the private sector to build hotels that would create critical mass and traffic – and then promote, promote, promote.
After only 35 years, in spite of many ‘bumps on the road’, the exercise has proven to be positive. Cancún now has 35,000 rooms and hosts almost 3 million tourists a year. Furthermore, as a result of Cancún’s success, new resorts such as Riviera Maya, Cozumel and Isla Mujeres in the Quintana Roo region have become part of the world tourism map with a total room count of 70,000 and 6 million tourists each year. Quintana Roo was once so scarcely populated that it did not justify statehood but it now represents one of the highest gross domestic products (GDP) per capita in Mexico. The region also has one of the highest levels of schooling and the largest inflow of interstate migrants who would otherwise have to look for opportunities outside Mexico, mainly in the United States.
When Fonatur created these integrally planned resorts, it set a series of guidelines in order to accomplish its goal to develop tourism as a major contributor to Mexico’s GDP. Among them was a stringent ‘no speculation’ rule, which essentially meant that they would sell land at very affordable prices, but buyers were committed to build within a specified period of time. Another key policy was the promotion of hotels with international brands that would attract national and international visitors, putting ‘heads on beds’ that would create critical mass and, in turn, fill airplane seats.
Cancún, like many other destinations, has survived the many challenges that have hurt tourist arrival numbers in recent years including the 9/11 attacks in New York, swine flu outbreaks, the Chiapas rebellion and the current war on drugs. Every situation has a different ‘cure’ for recovery but it is important to act swiftly at both government and private sector levels and communicate what is being done to correct the situation – and the more spectacular the cure, the better. For example, after Hurricane Wilma, Mexican authorities replaced 15 kilometres of beach in about five weeks and did an incredible job of reconstructing hotels and infrastructure. This was communicated to the general public but also, more importantly, to those responsible for distribution and encouraging people to travel to destinations again: travel agents, wholesalers, hotel companies and airlines.
A number of destinations in Mexico, including Cancún, have also recovered rapidly due to the large number of ‘captive’ tourists who, through various forms of vacation ownership such as timeshare, will always come back to a destination. About 40% of all of the available rooms in Cancún have been sold in some form of holiday ownership.
Cancún and Riviera Maya are examples of what tourism can do for a region or country. Almost all local residents are linked in one manner or another to tourism, whether as the bell boy of a hotel, the disc jockey at a nightclub, the accountant who audits the hotels or the police officer who keeps young tourists out of trouble. These same people have also become users of the restaurants, airplanes, supermarkets and other services that were initially built for tourists.
Mexico’s Ministry of Tourism acts as the head of the country’s tourism sector with the mandate to facilitate the political aspects of tourism including the exchange between states and countries, the promotion and simplification of regulation to encourage tourism growth and stability. The ministry also oversees Fonatur and the recently created Mexico Tourism Promotion Board whose goal is to put the Mexico brand including its tourist destinations on the world map. The tourism board is also responsible for domestic tourism promotion to Mexico’s more than 100 million inhabitants.
The success stories are not limited to hot spots like Cancún. Many other towns and villages throughout Mexico have turned to tourism as a means to development and poverty alleviation. Some of the best examples are located in Mexico’s poorer states such as Chiapas, Oaxaca and Guerrero. In these regions, most of the tourism businesses are cooperatives or family-owned enterprises that are embracing the principles of sustainable tourism through respect for the environment, local culture and heritage.