–The airport serving Cabo San Lucas and its lesser-known sister city, San Jose del Cabo, is looking emptier these days. And hotel guests have canceled 35,000 nights of bookings over the next year – collectively a decade’s worth of visits for a single traveler.
At a time when the weaker peso should be luring American travelers in droves, many are staying away, spooked by a wave of violence that’s come dangerously close to tourist hot spots. Gunmen opened fire at a Cancun nightclub in November, and a cooler with two human heads was found on Cabo San Lucas’s main hotel strip in June.
READ MORE: Cabo San Lucas beheadings: Cartel killings traumatize resort town as heads found in cooler
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 reinforcing security in popular tourist spots to get the State Department to revise its views, and companies including Hilton Worldwide and Marriott International are spending millions to make guests feel safer. Their motivation is clear: Barclays 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.
“Lower tourism activity will definitely have an impact on growth,” said Marco Oviedo, head of Latin America economic research at Barclays. “External tourism is one of the most important sources of income in the current account.”
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