By Christian Lega, Deloitte Financial Advisory Partner
The reality of this sector is: (I) it contributes wealth to the country – close to 9% of GDP; (II) supports new jobs – being the first employer of young people; (III) strengthens opportunities – second industry in employment for women, and; (IV) promotes social equality – tourist municipalities have marginalization rates lower than the national average.
At a global level, tourism presents an unstoppable trend; more than 10% of World GDP, creating 1 in 4 jobs of those generated between 2015 and 2019 and the third fastest growing industry, after the financial and information technology sector.
It is a reality that the pandemic has affected this industry like few others. Overall, the sector has decreased its GDP by almost 50% (x6 higher than the fall in national GDP).
However, the leisure tourism sector has shown a solid recovery since August, mainly derived from the recovery of air connectivity.
On the contrary, business tourism shows a tepid recovery; The Mexican economy still lacks the dynamism necessary to be able to foresee a rapid recovery.
The restaurant sector faces an additional challenge; the impoverishment of the population leads to a higher percentage of family income going to cover basic needs and less to leisure and recreation.
In terms of investment, it has been decreasing in the last 3 years, derived from a rise in capital costs, an increase in economic and legal uncertainty, a higher opportunity cost and the uncertainty derived from the pandemic. The positive reading is that the sector began to face an excess supply with the consequent decrease in value.
The decrease in investment will allow supply and demand to become equal again. Likewise, we see an increase in competition for differentiation, thus enhancing the added value that destinations and products offer. This is allowing the entry of new players in the market.
Considering the risks, the economy, security and the lack of coordination, they combine a good part of the concerns of the leaders of the sector. The first of the indicated items affects the entire sector across the board. The poor performance of the national economy and investment in the country is having a notable impact on business tourism.
In terms of security, the impact is similar to other productive sectors in the country: fall in investment, loss of tangible and intangible value, extremely prolonged recovery scenarios, among many others. Unfortunately, the control of this risk often escapes from the hands of the entrepreneurs in the sector.
To address the risks and opportunities that the sector presents for Mexico, the claim of the industry is to reestablish communication, dialogue and the alignment of objectives with the public sector, through coordination mechanisms that, although historically they have not been perfect, They have allowed the Mexican tourism industry to reach the world leadership situation that it currently presents.
We are facing a consolidated sector in Mexico, which generates broad economic and social benefits, with an expanding demand and, with great future potential for the country. Faced with this reality, it is the responsibility of public and private actors to defend and support the Mexican tourism offer as part of a priority industry for the country.
