[EPA]
[EPA]

Mexico's world-famous beach destinations — including Cancun and Tulum — are struggling with a sharp drop in foreign visitors, squeezed by a stronger peso, a surge of foul-smelling seaweed blanketing their shores and persistent security concerns.

International passenger arrivals at Cancun International Airport fell 11.8 percent in September compared with the same month last year, dropping from about 963,000 to roughly 849,000 — a decline of more than 110,000 travelers — according to the Financial Times and Mexico's tourism industry.

The slump extends beyond Cancun. Foreign arrivals by air across Mexico fell 1.9 percent in the first eight months of this year compared with the same period last year. American visitors — the country's most important tourism market — declined 5.8 percent.

Demand from Canada, where consumers have been turning away from US-bound travel amid trade tensions with Washington, picked up somewhat, but not enough to offset the loss of American tourists.

Mexico had hoped co-hosting the North and Central America World Cup with the United States and Canada this year would revive its tourism industry. Instead, visitor numbers at major beach resorts — including Cancun, Puerto Vallarta and San Jose del Cabo — have continued to fall.

A weakening of Mexico's price competitiveness is widely cited as the primary driver of the decline. The peso has strengthened about 12 percent against the US dollar over the past 18 months, pushed up by Mexico's higher interest rates relative to the United States and a broadly weaker dollar.

As the peso has risen, the cost of accommodation, food and local activities for foreign visitors has climbed in dollar terms. For American tourists, the same spending now buys fewer services than it did before.

Mexico's Caribbean coastline is also grappling with a severe seaweed problem.

Massive quantities of sargassum — a type of brown algae that floats in the ocean and produces a powerful stench as it decomposes on shore — have washed up on beaches in Quintana Roo state, home to Cancun, Tulum and Playa del Carmen.

The brown mats of algae have marred the white-sand beaches and turquoise waters that made Mexico's resorts famous, and have disrupted swimming and water sports at some locations.

Mexican authorities removed more than 105,000 metric tons of sargassum from Caribbean coastlines through mid-August, already surpassing the full-year total for last year, according to Reuters.

The government has deployed navy vessels and offshore barriers to collect the algae, but the sheer volume washing ashore has driven up cleanup costs for the tourism industry.

Security concerns are adding further pressure on the industry. Tulum, which has grown into an upscale Caribbean resort destination, saw international airport arrivals fall more than 40 percent this year.

Tulum built its reputation over recent years on electronic music festivals and beach parties, but the growth of its tourism industry has also drawn drug-trafficking organizations into the area, analysts have noted.

Reduced air connectivity has compounded the problem. Passenger traffic at Tulum International Airport totaled about 530,000 in the first seven months of this year, down 33 percent from the same period last year, according to the Spanish newspaper El Pais. Hotel occupancy rates fell about 9 percentage points over the same period.

Aeromexico suspended its Tulum routes at the end of last month. Mexican low-cost carrier Volaris plans to follow suit starting in January.

Puerto Vallarta, the Pacific coast's flagship resort city, has also been rattled by security concerns. After Mexican forces killed Nemesio Oseguera, leader of the Jalisco New Generation Cartel, in February, road blockades and violent incidents broke out across the region. News of the unrest spread internationally, deepening anxiety among potential visitors.

Mexico's tourism industry says the combination of higher travel costs and security worries has made it increasingly difficult to win back foreign visitors.

The decline is weighing on Mexico's broader economy. Tourism accounted for more than 8 percent of GDP in 2024, and falling visitor numbers ripple through hotels, restaurants, transport operators and local employment.

Mexico's economy is already in a low-growth phase. GDP expanded just 0.6 percent last year, and the IMF projects growth of 1.2 percent this year. Reviving the tourism sector has become a pressing priority for President Claudia Sheinbaum's administration. The Financial Times noted that the slump in key resort cities is amplifying economic strain at a time when the country is already dealing with a large fiscal deficit and slowing growth.

Mexico's overall foreign visitor count has risen, but much of that increase reflects cruise passengers and day-trippers crossing the border for short stays. The drop in air arrivals — tourists who spend more on accommodation and local activities — is hitting resort destinations hardest.

Within the industry, calls are growing for stronger overseas marketing campaigns and improvements to resort environments and public safety. Tulum has begun lowering admission fees at some tourist facilities and working to improve transport links in an effort to lure visitors back.

Although the peso's recent strength has shown some signs of easing, analysts expect a recovery in resort tourism to take time. Travel costs, beach conditions and security concerns are all shaping tourists' choices simultaneously — and restoring confidence across all three fronts remains the central challenge for Mexico's once-thriving coastal resorts.


rainbow@heraldcorp.com