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Tuesday, May 05, 2009

No Reservations Needed In Mexico During The Swine Flu Epidemic

El Zócalo, the heart of Mexico City's historic center, is generally packed

I wonder if PIA has reduced the number of flights into the Swat Valley's Saidu Sharif Airport this week. I suspect hotel rooms are going begging-- unless the Taliban militia has requisitioned them all. They don't need to though. Thousands of residents have been fleeing in every direction as the Pakistani Army prepares for a decisive military confrontation just a few hours northwest of the country's capital. Now Mexico is also in a touristic pickle. (The Swat Valley was one of Pakistan's most beloved tourist sites until the Taliban took it over and started brutalizing, raping and beheading women without head scarves and men without beards.)

In the midst of the drug-related violence and the swine flue epidemic, American Airlines is following the rest of the airline industry reducing the number of flights into Mexico. The tourist industry there is also in bad shape. Starting Friday and for the entire month of May and early June, American will reduce daily roundtrip flights from 42 to 31, citing "weaker demand." Continental is still flying, just using smaller planes and United is cutting its 64 weekly flights between the U.S. and Mexico to 24.

Generally flights to Mexico have been empty and flights back to the U.S. have been full, although today's NY Times is reporting that things are kind a/sorta getting back to normal-- if you think calling off Cinco de Mayo has anything to do with normal.
The authorities have been seeking to strike a balance between the health risk of widespread shutdowns and the economic cost of keeping parts of the economy shuttered. In Mexico, the nationwide impact on industries, including tourism, has cost about $2.3 billion, or between 0.3 percent and 0.5 percent of gross domestic product, Finance Minister Agustin Carstens said Tuesday.

The BBC reported this morning that there virtually is no tourism industry functioning in Mexico City right now. And its nearly as bad in the rest of the country. There are no foreign tourists at all and cruise lines have been canceling stops there.
Walk into the crisp, modernist lobby of the Camino Real hotel in the upmarket district of Polanco, and you will be treated as a bit of a novelty. Guests are far outnumbered by staff. The hotel has over 700 rooms. Less than 40 are occupied. The World Health Organization is the only regular customer these days.

...The closure of restaurants and other entertainment areas in the capital alone is costing as much as 100 million US dollars a day.

The Mexican economy, already devastated by a drop off in remittances from Mexican workers in the U.S., the second biggest source of income (between oil and tourists), is absolutely devastated now. This positively just kills the millions of low wage service workers involved with tourism-- waiters, musicians, maids, cooks, etc-- and it's spreading through the entire economy, which was already weakened by falling petroleum prices. The hotel occupancy rate in Mexico City is around 5%. That's also the estimated percentage that the economy is likely to contract by. Bloomberg is reporting that the swine flu epidemic is costing the Mexican economy about $145 million a day in gross domestic product. It's estimated that Mexico’s tourism revenue could fall 43 percent to $7.58 billion.

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