How Mexico became a top global destination for modern tourism

Beautiful Mexico has enjoyed its status as a prime tourist destination for decades. The nation has long had a reputation as a top global tourist destination, particularly from the neighboring United States. In fact, during the first quarter of 2018 alone, 2.9 million visitors from the United States came to Mexico. Cancun alone garnered a staggering 2.08 million visitors just Easter weekend in March, a 14.5% higher rate than March of 2017, according to Travel Agent Central.

But the latest influx of visitors to Mexico is not comprised of yesterday’s tourist looking for a week-long getaway on the beach. Mexico’s draw has become so much more. As Latin America’s second-biggest market, trailing Brazil, the nation’s rising economy partly rests on their strong status as a prime global tourist destination. In 2017, despite an economic sink, the tourist sector nearly balanced out the rest of the Mexican economy’s loss.

TRAVEL TRENDS Understand the behavior of Latin American travelers

Key data from Sectur, Mexico’s Tourism Agency, showed in its latest report Results of the Tourist Activity 2018 valuable information that reveals some details of tourism rise in the country. And the numbers are quite impressive:

  • The arrival of international tourists in 2018 was 41.4 million, which means an annual growth of 5.5%, compared to 2017.
  • Spending from international tourists in Mexico amounted to 22,510 billions of dollars, which represented an increase of 5.5% over 2017.
  • During 2018, the arrival by air of foreign visitors from US stood out, representing 56.1% of the total, followed by Canadians with 11.5%. As of Latin America and the Caribbean regions, the highest number of arrivals were from Colombia and Argentina, with 3% and 2.6% of the total, respectively.

What’s driving Mexico’s tourism success?

As the third-highest industry in Mexico, the government is feeding the draw. The National Fund for Tourism Development, FONATUR, campaigned to pull in new tourists from all over the world. It worked. In 2018, tourism grew 6.7 percent. Mexico is now ranked as the world’s 6th most visited country.

Infrastructure improvements have been a prime strategy. While neighboring United States has long vacationed to its southern neighbor, far-flung Asia is a different scenario. To entice a wider net of visitors, FONATUR used funding to improve airports in Mexico. Cancun recently completed work on its terminal four, and expansion is underway for terminal five.

New direct flights from Asia started in early 2018. Routes include flights from Tokyo to Mexico City, Shanghai to Mexico City, and connecting travel from Seoul to Mexico City through Monterrey. The result is a higher influx of visitors. Efforts are being made to accommodate the language barrier between Mexico and Asian countries, which in turn will lure more reluctant Asian tourists to feel comfortable coming to Latin America. In total, worldwide, 1.5 million seats were added in Mexican bound flights all over the world.

One change designated to fund a new tourist train set to run through the Mayan Peninsula, Tren Maya, is the closure of 17 out of 21 worldwide Mexican tourism offices. The decision has been met with a lukewarm response, however, the train will create a new travel experience for visitors. It will also, according to the government, create hundreds of thousands of jobs. The route travels loops through the Yucatan peninsula and through Mayan territory (causing some local concern and conflict about preservation) and will give visitors not just easy access throughout Mexico, but also allow them to take in the beauty of the country. This is not unlike the concept of Eurail, which makes traveling in Europe appealing for travelers who want to explore more than one place.

A successful campaign in 2017, Dear Country, led to a high influx of tourism, both across country borders and within Mexico itself. In 2018, a new campaign, Dear States, feeds off the successful idea, shining a spotlight on the Mexican states, familiar and new to travelers.

Mexico’s rising hot spots – access and economy benefits

Government funding does more than just provide access. The plans also generate a crop of business opportunities for locals, as well as breathing new life into both traditional vacation destinations and new locales. With the increase in access by plane, and soon by train, Mexico as a nation is poised not just to be beneficial for tourists and the local population, but for international business as well. The influx of new business also means a thriving economy that companies would be wise to invest in as it grows.

Gearing for a new wave of tourism, Mexico is not just promoting Cancun, Mexico City, and Puerto Vallarta, traditional hot vacation locales. Now, cities like Campeche, Yucatan, and Oaxaca are becoming new targets for visitors. New local businesses are able to support those areas, as well as big hotel chains looking to take advantage of the investment opportunity.

Culture is traditionally a big draw for visitors to Mexico. As part of the FONATUR funding, several new cultural centers have been built – the Palacio de la Musica and the Centro Internacional de Congresos in Merida – with the intent of increasing tourism to this capital city of the Yucatan.

Sustainable tourism and Mexico’s status as emerging smart destination

Resorts are historically popular in Mexico. Expanding on this success, Mexico joined the UN’s International Year of Sustainable Tourism for Development in 2017. A smart move. One of the hottest new trends in travel is eco-friendly, sustainable accommodations. The UN’s proposal promotes this kind of attitude. An eye on responsible traveling, some of Mexico’s most luxurious resorts are now soundly sustainable.

An effort to raise standards of tourism, both as provocative and modern, as well as environmentally sound, the concept of Smart Destinations is an evolving concept aimed at delivering the most modern and responsible tourism possible.

The four pillars of Smart Destinations are technology, innovation, accessibility, and sustainability. Creativity and potential are critical elements of an idyllic Smart Destination. With these concepts in mind, it shouldn’t come as a surprise that a number of Mexican cities are in the Smart Destination-in-Progress program – a four-year trial in which an audit determines whether the city will be designated as an official Smart City. Tourist cities in Mexico participating as in-progress candidates are Cozumel, Mexico’s first smart destination in progress, and Tequila.

Mexican smart cities include advanced public transportation, like share bike systems, car shares like Uber, all utilized through mobile apps. Resources like government, education, and business make smart cities smart. Cities like Queretaro is set to be officially smart in 2020, using the internet as a daily guide for residents. Mobile apps, sustainable energy, and a guarantee of 100% internet connectivity are some of the aspects Queretaro residents can enjoy.

Guadalajara – Mexico’s digital hub, Mexico City, and Puebla are all cities vying for Smart City designations.

A new way to travel

LABS got in contact with Daniela Orozco, Research Manager at the Mexican Association of Online Sales, AMVO, and found out some key factors about the Mexican traveler habits on online tourism that further confirm Mexico’s spotlight position on this industry. Data are from the latest report E-commerce in Travel – 2018 Study from the entity, whose main goal was to understand the key e-commerce indicators of the travel industry in the country.

  • Traveling is a must-have activity. 7 out of 10 [Mexican travelers interviewed] declare that they have traveled 6 months ago or less.
  • 8 out of 10 declare that online booking simplifies the process.
  • 81% claim that traveling improves their quality of life.
  • 46% declare that travel has become more accessible to their budgets
  • 53% considers that a wide offer of products, routes and travel services as a factor that improves the experience of shopping online.
  • 44% claim that offering payment methods that fit their needs is something that enhances the online experience when purchasing travel services.
  • 39% consider installments as something that also improves the shopping experience.

Tourism is one of the most relevant categories contributing to a steady growth of the ecommerce industry in Mexico, not only because is one of the main sectors in the mexican GDP, but because its online presence is strongly becoming a top of mind to the Mexican consumer

Daniela Orozco, Research Manager at the Mexican Association of Online Sales

If being smart is being innovative, much of the travel industry has gone the way of smart style. Lodging is no longer limited to expensive resorts or unkempt motels. Tech travel companies like Airbnb and Booking have changed tourism. Savvy travelers like Flavio Gomes, a 29-year-old Administrative Analyst in Brazil, leave travel experiences mostly open-ended. “The only thing I booked in advance was the airplane tickets”, he said. The ability to travel in such a cavalier fashion rested in his use of apps, like Skyscanner, Decolar, Airbnb, Hostelworld, and Booking. “Most parts of searching were used only as a price reference”.

Cost, for Flavio and other travelers, is a hurdle overcome with the use of installment payments and credit cards. Debt is a given for any trip Flavio takes, and those accumulate to 6 national vacations a year, and an international trip every two to three years. Credit cards are a popular way to travel, many partnering with airlines to offer points for future travel.

Fulvio Marcius Amendola Marcondes Carvalho, a 47-year-old professional in the Industrial sector, recently used a credit card to pay for his family’s trip to Mexico. Fulvio started planning a full year before his trip, and he booked his hotel and airfare ahead of time using Booking, which is his go-to site. “Sometimes I choose installments for plane tickets”, he said. Installments are helpful for most travelers, and the trend doesn’t appear to be going away any time soon. “I already used CVC to plan, and I paid for another trip using installments”, he added.

Latin Americans are showing great interest in their own region. Marina Ferreira, 23, is a travel blogger and content producer. She already chose destinations like Argentina, Paraguay, Uruguay, Chile, Costa Rica, and Aruba. As to why she chose Mexico, “It felt like a pretty complete destination. It has sights from ancient civilizations, complexes, natural waters, Caribbean beaches, deserts. But also modern art, street carnival parades, and mariachi bands” .

Even for a hearty travel experience like this, Marina booked her travel only three months in advance, using apps for booking like Kayak and Airbnb. What does make it possible for Marina to travel to all of these countries? One of the key factors is the possibility of paying by installments. Besides the flight, the traveler added that she would probably borrow a family member’s credit card in case she couldn’t choose installments to pay for some of the services.

Credit card and apps are the trends that allow younger travelers to travel today.

Felipe Betassi, 23, used this payment option for his travel to Mexico. He booked his trip only 40 days in advance: It’s possible because of apps. “The possibility of paying the airplane tickets by installments made my trip much better in terms of budget. I was able to visit other cities and spend more money on tourism“. As to why Mexico, he explained that the main motivation was a cheap airplane ticket that he found online. “Besides that, Mexico is a huge country with lots of tourism options, beautiful beaches, landscapes, and a great culture“.

As easy-to-pay and easy to research technique, ecommerce in the travel field is a huge new market growing at a fast pace not only in Mexico, but all over Latin America. For businesses, an edge will come by staying up to date the new payment behaviors and research methods that travelers use today.