Cancún Hoteliers Face Crisis Worse Than Pandemic

The Mexican Caribbean is facing one of its most complex periods in recent years. For tourism businesses, the drop in visitor arrivals and income has created a scenario that, in some indicators, is even more difficult than during the COVID-19 pandemic.

Dolores López Lira, founder and president of Grupo Lomas's Administrative Council, issued the warning. She said a combination of reduced air connectivity, fewer travelers, low occupancy, rising costs, and an unfavorable exchange rate is placing unprecedented financial pressure on the sector.

A 50% Drop in Air Traffic

The market's deterioration is clearest in air activity. López Lira noted that during peak demand seasons, Cancún International Airport used to record over 600 daily operations. It now barely exceeds 300. "That gives you the guideline of 50%," she said, referring to the reduction in air movement, which she considers a primary factor behind the drop in tourists.

She attributed the contraction to a mix of factors hitting travelers' ability to reach the Mexican Caribbean. These include international conflicts, rising jet fuel prices, more expensive airfares, and changes in US and Canadian airline operations. Even the soccer World Cup, initially seen as a regional tourism opportunity, ended up hurting connectivity to Mexico. Some US airlines moved aircraft from the Mexican market to serve domestic demand related to the tournament, with Canada making similar moves. "During the World Cup, what we all thought would benefit us, hurt us," she stated.

A shift in the US market, particularly in Texas-historically a key summer market-added to the problem. López Lira explained that tightened ICE immigration operations caused fear among parts of the Latino population, reducing their willingness to approach airports and travel. "Latinos don't want to go near an airport, whether they are legal or not. So, they didn't travel, they aren't traveling." she said.

Rising Costs and a Poor Exchange Rate

The drop in visitors coincides with higher operating costs and a reduction in the value of dollar income when converted to pesos. López Lira explained that many business projections were made assuming an exchange rate near 20 pesos per dollar. The rate is now around 16 pesos. "Right now the dollar is at 16, meaning, from the start we are receiving four pesos less for every dollar," she specified.

At the same time, taxes, salaries, supplies, and even fuel have increased in cost. The businesswoman estimated these items have accumulated an increase of nearly 80 percent over the last four years. The result is a particularly difficult combination: fewer tourists and less income, but higher costs to maintain operations.

Hotel Occupancy as Low as 30%

The situation is reflected in the hotel industry. López Lira estimated that, broadly, some areas of the Riviera Maya are currently seeing occupancy levels between 30 and 40 percent. She acknowledged certain establishments reach 60 or even 70 percent.

The problem isn't limited to available rooms, but the composition of the current travel market. It is a segment that generates significant visitor volume but is reducing trips due to increased travel costs. Pressure on hotels is compounded by the growth of vacation rental platforms. López Lira clarified that the Airbnb model isn't negative in itself but considered it essential for it to operate under rules creating conditions similar to those faced by formal hotels. "It's good that they offer their houses, their apartments, but they should cover certain guidelines like we have to," she said.

The concern also has an economic and social dimension, as formal activity generates jobs and tax revenue.

Sargassum and Worker Impacts

Another element deteriorating the Mexican Caribbean's tourist perception, according to López Lira, is sargassum. She noted other Caribbean destinations and US states like Florida and Texas also face the phenomenon but have opted to give it less public exposure. "We are such good advertisers that we tell everyone, we have sargassum, we have sargassum, we have sargassum," she quipped.

One of the most worrying aspects for the business sector is that the tourism contraction is now directly reaching workers. López Lira revealed Grupo Lomas has had to ask some collaborators to give up certain workdays-a measure she said had never been necessary, not even during the pandemic. "That hurts us because we know they are not receiving tips, they don't have their complete income," she affirmed.

The reduced tourist flow has a multiplier effect. It decreases company activity, reduces workers' hours and tips, while most corporate obligations remain intact. Recovery, she considered, is closely tied to the destination's ability to regain air connectivity and attract volume tourism again, particularly from the international markets that have historically sustained the Mexican Caribbean's activity.