Mexican Tourism UNCOVERED

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TOPOSOPHY INFO

MEXICO
TOURISM
UNCOVERED
2014
To build a tourism strategy that lasts and that works for all, you have
to be realistic in analysing what works and what doesn’t. In the sec-
ond of this ‘‘Uncovered’’ series of reports, experts at TOPOSOPHY
lift the lid on tourism trends in Mexico and make an honest, frank
assessment of the top priorities for government and business in the
country today.
Domestic and international tourism in Mexico is continuously grow-
ing. The tourism industry growth continues to ride higher than the
average national GDP growth and investment in the tourism sector
is pouring into the country as the main source market, the United
States, recovers from the global financial crisis. Nevertheless image
remains the main concern as incidents relating to organised crime
continue to affect parts of the country and Mexican citizens have
mobilized to demand more security as mid-term elections approach
(Summer 2015).
As this report will explain, the media often reports a distorted view
of the reality of daily life in Mexico. Furthermore, Mexicans’ views of
their own country can often be subject to an inferiority complex or
over-influenced by current events. Discover TOPOSOPHY’s take on
the current state of Mexican Tourism in this candid report that aims
to provide an external view and an independent perspective on how
a tourism industry with high potential can deliver for the country in
the future.
Dr. César Castañeda Vázquez del Mercado |
Senior Research Analyst, Chief Editor
Manolis Psarros | Destination Marketing Specialist
Peter Jordan | Senior Tourism Analyst
Dr. Pantazis Pastras | Senior Research Analyst
TEAM OF CONTRIBUTORS

INTRODUCTION
ONE OF THE LARGEST
TOURISM MARKETS IN
CONSTANT GROWTH IN SPITE
OF RECENT IMAGE PROBLEMS.
This report presents a country that offers growth in its tourism industry even
through hard times like the international financial crisis or the actual image cri-
sis that the country is experiencing. One of the reasons for such a good per-
formance is the fact of being neighbours to one of the world´s largest tourism
source markets. Mexico is the first international destination for US citizens and
the second destination for Canadians1
though this advantage is not necessarily
known to international investors. As a result, and the tourism industry is mainly
steered by investments from Mexican, US, Canadian and Spanish tourism com-
panies and investors. Very few investments from Asia, Middle East or Eastern
Europe are present in the Mexican tourism industry.
Even when growth is a constant and given the size of the domestic market that
makes the Mexican tourism industry rather resilient, much better results could
be achieved if Mexican tourism destinations implemented the use of new tech-
nology, improved their promotional strategies and specialized in catering to al-
ternative niche markets.
1

Major investments in infrastructure and tourism business are pouring in from the
public and the private sector, national programs to increase both domestic and
international tourism demand are being implemented and perspectives for the
sector are promising.
In spite of this, the political and social scenarios concerning violence, drug traf-
ficking and the weakness of municipal authorities are putting pressure on the
image and perception of the country. These situations require extremely urgent
attention from the national and local authorities which will need great creativity
and clear messaging in order to clarify the difference between tourism destina-
tions and social conflict areas.
To counteract the many misconceptions about Mexico today, the country has an
urgent need of country branding. In some areas city branding is also needed,
and not just from a tourism point of view. Many Mexican municipalities are in
need of a global strategy that covers all areas; public service, universities and re-
search, industry, services, cultural scene. The country boasts talented individu-
als and institutions in all of these areas, however little news of this rarely travels
outside of Mexico, leaving the media space to concentrate on bad news.
Experts at Toposophy believe that the full potential of Mexico’s tourism has not
yet been achieved and that with the right policy changes and the support of all
tourism related sectors, this can boost Mexico’s economy as well as improving
social conditions for Mexican citizens.
Hence, this report is focused on scrutinising the current strategies and possible
actions that the country could implement in the short and long term from a busi-
ness perspective to foster growth while preserving the natural environment for
future generations.
MANOLIS PSARROS
Managing Director
2

FACTS AND FIGURES
- Large infrastructure investments and reforms: Boosting growth with a capital ‘B’.
- What’s behind Mexico’s recent tourism growth?
- An industry with high potential
- Mexico in the international tourism context
- Giving tourism the political importance it deserves
THE TOURISM INDUSTRY AS A KEY PLAYER
IN MEXICO’S ECONOMIC DEVELOPMENT
- Overcoming geographical limitations
- The DMO: an unknown formula in many Mexican destinations
- Self-esteem problems
- What about business travel, congresses and conventions?
- Tourism and culture: lacking the ability to support each other
- How unsafe is Mexico?
MEXICAN TOURISM
AND GLOBAL TRENDS TO TAKE ON BOARD
- Market Segments and Consumption Trends
- The Evolving Nature of the Tourist Experience
SIX STEPS TO BOOSTING MEXICAN TOURISM
- Alternative promotional strategies
- Make congress and conventions tourism a key element of the national strategy
- Bridge the digital divide
- Investment in Human Capital
- Finding new niche markets
- Make tourism the cleanest industry in Mexico
CHAPTER 1
CHAPTER 2
CHAPTER 3
CHAPTER 4
7
22
55
34
8
24
56
44
14
25
57
16
26
58
17
28
59
29
60
CONTENT

Tourism has proved to be one of the most resilient industries in Mex-
ico, even when we take into account tough international conditions
such as the worldwide slowdown during the 2008-09 financial crises.
The domestic market in particular has helped the tourism industry to
preserve jobs and pass through hard times.
Mexico is the world’s 14th largest economy and the second in Latin
America2
. Representing 8.4% of the country’s GDP3
, tourism entails
a significant share of business activity. Growth perspectives are ex-
tremely positive given that in 2013 the number of foreign tourists
broke a new record with 23.7 million international arrivals. In 2014 the
number of international tourists traveling to Mexico surpassed 19.3
million in the first eight months of the year, marking new record high
for any January-August period. Furthermore, international visitors to
Mexico from January to August spent a record totalling $11,131 mil-
lion USD, an amount not previously reached during any eight-month
period in a year4
.
Nevertheless these encouraging numbers have been overshadowed
by a strong negative image surrounding some Mexican destinations
and the general perception among many international markets that
the country is going through difficult times in terms of security and
social conflicts.
CHAPTER 1 | FACTS AND FIGURES
5

On these grounds, understanding the present and future of Mexican
tourism means:
• Summing up the facts and figures of recent growth (1st
Chapter)
• Shedding light on themes and issues that will shape
the evolution of the sector in the years to come (2nd
Chapter)
• Asking what national strategies will address the present trends
at a local and global level (3rd
Chapter)
• Discussing the need for actions by the public and private sector
at all stages of tourism planning that can reinforce Mexican
tourism’s current growth and potentially lead to higher
development if the country is able to confront pressing
challenges such as its image crisis, preparing for climate
change, increasing the quality of services and improving tourist
average expenditure, amongst other difficulties (4th
Chapter)
6

Mexico is going through a process of large scale re-
forms where almost every sector is being revised and
improved. These major reforms include opening up
strategic sectors such as telecom, energy, and trans-
ports to foster competition seeking better prices for
users.
For example, announcements have been made con-
cerning the new international airport in Mexico City5.
With phase one (of two) costing an estimated 13 bil-
lion USD, the airport is aiming to position itself as the
largest airport in Latin-America and the most state of
the art in the world.
LARGE INFRASTRUCTURE
INVESTMENTS AND REFORMS:
BOOSTING GROWTH WITH A CAPITAL ‘B’.
THE FIRST COUNTRY TO INTRODUCE A
HIGH SPEED TRAIN NETWORK IN THE
AMERICAS
Mexico has also announced that it will be the first country in the American continent (ahead of Canada and the
US) to build a high speed train network6
, with the first route connecting Mexico City and the city of Queretaro, a
world heritage colonial city and the main hub of aircraft and automobile industrial development in the country
and the nearby city of Toluca. Construction is subject to delays because of the negative effect of the falling inter-
national oil prices upon a major oil producer such as Mexico, but the initial plan is that more cities will be linked by
the network in coming years, namely: Gujadalajara, Monterrey and Leon.
These large investments in infrastructure have been accompanied with major investments in tourism advertising
and the creation of an ambitious social tourism policy that will lead to a further strengthening
of domestic demand.
MEXICO
7

INTERNATIONAL TOURIST ARRIVALS (MILLIONS)
WHAT’S BEHIND MEXICO’S RECENT
TOURISM GROWTH?
International arrivals have experienced constant growth over time except for the year 2009 when the financial
crisis had an impact. The situation recovered by 2010. In 2013 Mexico received 23.7 million tourists.
MEXICO IS THE SECOND MOST POPULAR
COUNTRY DESTINATION IN THE AMERICAS
Constant growth. Mexico is experiencing constant growth both in arrivals of domestic and international
tourists and is ranked as the second largest tourism market in the Americas after the United States. It is
also second in number of visitors in the continent and third in terms of revenue generated by tourism after
the US and Canada7
.
This growth has largely been characterised by the following factors:
8

Higher revenue. International receipts increased dramatically in 2013
reaching 8.5% growth compared to the previous year, the largest growth
in the last 10 years and a historical record level of revenue from both visi-
tors (defined as those who do not spend one night) and tourists (spend-
ing one night or more). International tourist expenditure alone grew 8.8%
in the same year 2013 compared to 2012. This year the market has shown
even better promise, with the influx of foreign currency from the arrival
of international visitors increasing 18.1% during the first eight months of
2014 compared to the same period of the previous year. While spend-
ing by international tourists increased 22.2% during the same period,
exceeding 9,833 million USD. For the January-August 2014 period, the
average expenditure of international visitors (not spending a night) in-
creased 14.6% compared to the same period of the previous year, while
the average expenditure of international tourists increased 2.7% com-
pared to the same period of 2013
TOURISM INTERNATIONAL RECEIPTS (MILLION USD)
9

Big neighbours The US is by far Mexico’s leading inbound market accounting for 57.3% of the total in-
ternational tourists, followed by Canada 13.1%, United Kingdom, 3.4%, Brazil 2.2% and Argentina 1.9%8
.
Other important source countries are France, Spain and Germany. Compared to past years some
European countries are becoming relatively less important as source markets while South-American
countries like Brazil or Argentina raise their stakes as important source markets.
10

Domination of the domestic market.
During January-August, 2014, the arrival of domestic tourists to hotel rooms was over 33.7 million
tourists (75.4%), the remaining 24.6% was foreign tourists. This is significant because domestic tour-
ists are the main driver of the tourism industry and are not so affected by bad news relating to
security, given that they live in the same country and are able to recognise the difference between
sensationalist reports and genuine threats to their security.
Domestic growth. The domestic tourism market increased almost 1% from 2012 to 2013
accounting for a total of 68.8 million people spending at least one night in hotels.
11

Air lift. The number of air passengers arriving at Mexican airports increased 8.2% in 2013, compared to 2012.
For the first time the country had more than 46 million passengers in a year. Domestic passengers totaled
more than 30 million people while international passengers accounted for more than 15.7 million.
A less expensive destination. Since October 2014 the exchange rate made Mexico slightly cheaper
compared to some destinations in the US or Europe. The Peso-Dollar exchange rate moved from
12.90 to 14.70 pesos per dollar in line with international markets and falling oil prices. This has given a
comparative advantage to the country both in terms of tourism investment and travel. This trend has
continued into early 2015 in light of falling oil prices.
Sources: planetalkinglive.com
12

Increasing hotel occupation.
The occupation rate of a group of the top 70 resort destinations during January-August of 2014
was 1.32% higher in comparison to the same period of the previous year.
Cruise tourism recovery. Previously the world’s number one cruise destination, Mexico is today un-
derground a rapid recovery of its market-leading position. The ports that received the highest num-
ber of cruise passengers from January-August 2014 were: Cozumel (2,263,719), Ensenada (452,294)
and Majahual (273,271); Ensenada showed particularly strong growth with a 59.8% increase in pas-
senger arrivals in comparison to the January-August period of 2013. On the other hand, total arrivals
increased 29.3% during the same period. Other destinations growing in the January-August, period of
2014, are Puerto Vallarta (81.2%) and Huatulco (4.6%) compared to the same period of 2013. Still during
January-August, 2014, the main ports for cruise passengers remained to be: Cozumel, Ensenada and
Majahual representing 83.6% of all cruise arrivals in the country. In spite of these promising figures,
according to Mexico´s Central Bank spending by cruise ship visitors still only accounted for 2.5 % of all
foreign tourism receipts during the first eight months of the year.
13

AN INDUSTRY
WITH HIGH POTENTIAL
Aside from its advantageous geographic situation (with mountain snow, desert, forest, rain forest cultural cities,
large cities, magical towns and all year long warm beaches) Mexico has an extremely diverse range of tourism
products including archaeology (Mayan, Aztec, Toltec, Zapotec and Olmec), the largest number of heritage sites
in the American Continent, numerous colonial cities, several beach destinations with warm water all-year long,
food that is considered world heritage cuisine9
, enormous biodiversity, and estimated home of 12% of all animal
species, as well as major cosmopolitan and cultural centres such as Mexico City, Monterrey and Guadalajara. All
these elements are enough to strengthen Mexico’s position in the international tourism arena.
Tourism accounts for 8.4% of the national GDP and almost 6% of all the jobs in the country, totalling 2,279,170 jobs
in 201210
. Large investments in ports, airports and railroads will further improve the attractiveness of the country
and more investments in hotels, restaurants, attractions, national parks, museum, and other tourism facilities are
therefore expected.
TOURISM ACCOUNTS FOR
8.4% OF THE NATIONAL GDP
AND ALMOST 6% OF ALL
JOBS IN MEXICO
Stone big pyramid in Uxmal, Mexico
14

The real results of all the reforms carried out by
the current government (including telecom, en-
ergy, education, fiscal system and security) should
start showing their benefits from 2015, with the
creation of more and better paid jobs, the increase
of resources invested in education and social care,
safety and easing social unrest, hopefully leading
to an increase in tourism visitors and spending.
The present growth in arrivals and the present re-
forms spell good news for the Mexican tourism
industry. However it does not tell the whole story.
In addition to promoting this growth and reform,
Mexico also needs to focus on the revenue gen-
erated from tourism in particular by improving the
quality of hotel and attraction infrastructure and
thereby upgrading the tourism experience both for
national and international tourists.
This growth would arguably be much stronger if it was not for the climate of social unrest and
insecurity which has arisen as a result of violent crime, particularly linked to the activity of drug
cartels. Many public protests have sprung up in response to violence and inequality, occasion-
ally leading to clashes with police and thus further concern to investors and visitors alike about
violence. Concerning these two points, in late November 2014 the national government an-
nounced major reforms concerning security and national police which will bring more invest-
ment in security, professionalization of the police force and investment in equipment.
Ancient Mayan temples in the ruined city of Palenque
15

MEXICO IN THE INTERNATIONAL
TOURISM CONTEXT
The growth in international arrivals and hotel occupancy in Mexico is taking place in the context of more wide-
spread growth in global tourism. In a period of consistent growth for global tourism from 2010 onwards, arrivals
in the Americas grew an average of 3.2% in 2013 and North-America, (Mexico´s region) grew 3.5% in 2013 com-
pared to 2012. The 1.4% growth shown in Mexico is less than half of the overall growth experienced in the North-
American region. As for revenue from tourist spending, Mexico did performed better than the North American
region with an 8.5% increase in 2013 compared to the average of the region for that year of 7.8% and way above
the 3.2% experienced by Central and South American countries11
.
MEXICO’S IMAGE DOES NOT YET APPEAL TO
TOURISTS BEYOND TRADITIONAL SOURCE MARKETS
While Mexico has shared some of the characteristics
of tourism growth occurring elsewhere, some of the
challenges that restrain that growth from reach its
potential are unique to Mexico. For example, some
of the main challenges experienced by the country
are related to its image, which is also the case for the
challenge of finding new visitors beyond its tradition-
al source markets. Efforts have been made to attract
larger groups from China, Japan, Russia and Australia
but distance and reputation make it hard to attract
new markets for the time being.
To offset these challenges, it is fortunate that North
American tourists are continuing to arrive in great
numbers, due to improved air connectivity, the com-
paratively high quality of destinations such as Can-
cun or Los Cabos, concerns about terrorism and
war in some Middle East countries and the relatively
higher cost for US, Canadian and Mexican travellers
of reaching destinations in Europe or the Far East.
The marina of Cabo San Lucas
16

GIVING TOURISM THE POLITICAL
IMPORTANCE IT DESERVES
The Mexican government is concerned by the impact
of its major reforms in particular the fierce opposi-
tion from parties of the left and some social groups.
Teachers for example, reacted to education reforms
by blocking roads and affecting tourism while left-
wing activists opposed to energy reforms have also
organised high-profile marches and gatherings in dif-
ferent cities to protest against this.
With so many pressing economic and social reforms
on the agenda, tourism is definitively not the main
concern of public policy or investment; nevertheless,
the large infrastructure investments are expected to
indirectly benefit the tourism industry, despite the
fact that it is not the main reason for those invest-
ments.
17

THE «COUNTRY BRAND INDEX» PLACES MEX-
ICO IN POSITION 55 WORLDWIDE, WITH FAR
MORE POSITIVE PROSPECTS FOR THE FUTURE
Also in Mexico, as in many other countries, decision makers at local levels rarely understand tourism and all its
implications. Many local governments at the state and municipality levels consider tourism a secondary portfolio
and, in many cases, resources that should be dedicated to tourism are used in other areas.
Considering that tourism activities are mainly influenced by local infrastructure and local policy, Mexico faces a
situation where, to say the least, there is room for improvement.
The «Country Brand Index» places Mexico in posi-
tion 55 worldwide12
, but in their analysis of the future
top 15 country brands Mexico is at a very acceptable
number 8 with the report stating that in spite of grow-
ing pains, “experts are predicting a positive turn for
the country’s political, economic and social systems
in coming years. If these predictions hold true, Mexi-
co could well become a global heavyweight”13
.
Mexican authorities should give further impulse to
the tourism agenda, promoting this sector as a gen-
erator of employment and an important beneficiary
of the telecom, energy, labour, competition and fi-
nancial reforms. Since the best way to counter unsat-
isfied social groups is by giving them results, tourism
can give fast long lasting results if the right support is
given by national and local authorities.
18

THE TOURISM
INDUSTRY AS KEY
PLAYER IN MEXICO’S
ECONOMIC
DEVELOPMENT
19

Mexico has played home to many firsts in the international tourism devel-
opment arena. Mexico pioneered archaeological tourism in the American
continent, Teotihuacan, just kilometres northeast of Mexico City, became
the ﬁrst archaeological site to be speciﬁcally promoted for tourism pur-
poses since the first decade of the XX century. In the 1940 and 50s Aca-
pulco was the first resort to welcome wealthy jet-setters from the US,
the Canadian Giant Air Transat made its inaugural flight on November
14, 1987, travelling from Montreal to Acapulco. Mexico City was also the
birthplace of the World Tourism Organization (WTO) during the Extraordi-
nary General Assembly of IUOTO in September 1970.
Since those times, Mexico has led tourism in Latin America and the Car-
ibbean. Pioneering different models of development improving its the
public tourism policy from a high end beach resort strategy to a more
mass and middle class beach resort system in the 80´s and 90´s. Lately
some members of the industry have moved towards upgrading the tour-
ism experience by including the important cultural heritage and natural
attractions offered throughout the country. Destinations like Guanajuato,
Mérida, Morelia and Puebla as well as the ambitious program Pueblos
Mágicos14
target a visitor more interested in culture and nature. Even
when these strategies are on the right track important efforts should be
made to attract more North American visitors to cultural destinations.
CHAPTER 2 | THE TOURISM INDUSTRY AS A KEY PLAYER IN MEXICO’S ECONOMIC DEVELOPMENT
Cathedral of San Cristobal de las Casas
20

Indeed the Mexican tourism industry is now playing catch-up due to the
fact that for too many years planners and businesses alike concentrated
on building its profile in the market for sea & sun at the expense of pro-
moting cultural destinations, adventure and nature discovery along with
other segments. Fortunately this is starting to change, however in the
mind of consumers in the main international markets (Canada and US)
Mexico is still a sea & sun destination. For Europeans the main reasons
to travel are archaeology and history, but their market share is less sig-
nificant and therefore these clients do not yet promise sufficient yields to
foster a high-end cultural tourism agenda.
Asian markets are still hard to attract and Mexico is not currently benefit-
ing from the important growth of Asia as an outbound market, mainly be-
cause the country is still pretty unknown to Asian consumers in general.
Experts at Toposophy believe that if Mexico were to successfully mar-
ket its cultural assets to new audiences, it is highly likely that sustainable
growth in visitor arrivals would follow consolidating the country as a com-
plete destination offering sun & beach as well as culture and nature.
Mexico is still far from reaching its most favourable scenario in
tourism; hence the following section raises several points of inter-
est and discusses the various ways in which people inside and
outside the sector need to engage in institutional and manage-
rial innovation in order to make tourism a real tool for economic
development.
SEA & SUN ELEMENTS DOMINATE
PERCEPTIONS OF MEXICO
AS A TOURISM DESTINATION
21

OVERCOMING
GEOGRAPHICAL LIMITATIONS
Mexico is the 12th largest country
in the world with 1,972,550 km2
and is traversed by two mountain
chains and one volcanic axis. This
makes travel by land long and
complicated, and while the country
has invested over time in improv-
ing the highway network, there is
still much room for improvement.
Crossing the country by land can
take up to 4 days, travelling from
Mexico City (in central Mexico) to
Cancun (in eastern Mexico) by car
without stops can take 19 hours
travelling for 1668 km.
Rather than investing larger amounts of money in tunnels and highways, the government has opted to invest in
high-speed trains and improve flight connections. In 2013 the country had a total of 85 commercial airports; 59 of
these are international and 26 for domestic traffic only. In 2013 the airports that processed the most passengers
were Mexico City with 31.5 million passengers, Cancun 15.9, Guadalajara 8.1, Monterrey 6.4, Tijuana 4.2, San José
del Cabo 3.2 and Puerto Vallarta 2.7 million passengers15
. Still, connectivity is restrictive and many destinations
are expensive to reach.
22

Since the bankruptcy of one of the two main Mexican airlines, Mexicana de Aviacion, the market has seen slow
growth with benefits for both Aeromexico (the other main airline) and a series of new airlines that increased their
operations, namely: Interjet, Volaris, Magnicharters and Viva Aerobus. High fuel costs make it still difficult to im-
prove connectivity more rapidly but the energy sector reforms that were passed in 2014 should start giving re-
sults from 2016 onwards, opening the door for better connectivity conditions, along with the construction of the
new Mexico City Airport that will position Mexico as regional hub for North-Central America and the Caribbean.
The National Communications Minister announced in November 2014 a new connectivity treaty that would open
the possibility to any Mexican or US airline to fly from any airport in Mexico to the US and vice-versa16
.
Plans to increase the use of passenger trains tradi-
tionally used since the beginning of the 20th century
were definitively cancelled in 1997 in the whole coun-
try after several union problems and different periods
of private and public efforts to operate them1
. The
present administration has sought to turn this around
and has announced the construction of terminals,
railroads and trains to support a high speed train
network the first such network in the whole Ameri-
can continent. Two main construction projects will be
pushed during this administration will be: Mexico City
– Queretaro and Mexico City - Toluca.
THE NEW MEXICO CITY AIRPORT WILL POSITION
MEXICO AS REGIONAL HUB FOR NORTH-CENTRAL
AMERICA AND THE CARIBBEAN
1
The only exceptions are the touristic train of Copper Canyon in Chihuahua and the touristic train “Expreso Tequila” in the Tequila region. These trains offer circuits
but do not work as regular transport means, only as a recreational tour.
23

Many important destinations in the country still work
on a governmental tourism office model (where the
local government takes all decisions relating to tour-
ism management and promotion and uses public
funding), in some cases it is just the local hotel asso-
ciation that makes decisions concerning promotion
and marketing. In fact the only two destinations that
have a destination management organisation (DMO)
in the European sense (where tourism companies
and government decide together and invest togeth-
er) are the Mayan Riviera and the Nayarit Riviera that
clearly experienced constant growth and success.
Several destinations grow and decline according to
the market fluctuations with no organised interven-
tion by public authorities or private companies to
help. In some places, where no integrated destina-
tion management occurs, many of these destinations
experience lack of water, infrastructure or hospitals,
while large resorts and tourism investments demand
municipal services.
Across Mexico, municipal authorities change every
three years, creating regular upheaval in tourism
planning. Besides, and tourism authorities at the lo-
cal level are not always experts in the field. As a re-
sult, many major destinations have their website only
in Spanish or very poor English and not always fully
translated. Other languages are simply not taken into
account2
. Just as with online promotion, many other
projects concerning environmentally friendly poli-
cies, investment attractions or strategic planning are
also hard to achieve given the lack of follow-up gen-
erated by such a short mandate for local authorities.
THE DMO: AN UNKNOWN FORMULA
IN MANY MEXICAN DESTINATIONS
To ensure that destinations have the tools to improve their competitiveness, there is a pressing need for
a large scale initiative to create DMOs throughout the country that can bring public and private partners
together to decide how destination management should be organized, which infrastructure priorities
should be addressed and which kind of research, marketing and promotion should be carried out.
Self-awareness of strengths and weaknesses in competition along with thorough market knowledge are the
most important assets for DMOs. This way, they can focus on selling exactly what their destinations have and on
building a brand which resonates with consumers. The advantage of this approach is that DMOs see themselves
and their cities as exceptional cases of unique product offerings using a marketing perspective rather than a
political one, which appeal to both domestic and international tourists, while ambition together with realism un-
derlie their marketing efforts.
2
Oaxaca´s website is an example of poor translation, the main page is in English when one clicks on a menu it appears in Spanish
http://www.oaxaca.travel/index.php?option=com_content&view=category&id=71&Itemid=370&lang=en
24

Mexico´s own collective perception is a complex one.
Although the country has many assets that overseas
visitors dream of seeing, local residents don’t always
understand this perception and consequently under-
value what their country has to offer. For example, it
is not widely known that Mexico City has more mu-
seums than any other city in the world, with over 150
museums17
. Mexico City also has one of the largest
ranges of cuisine available in the world, and Cirque
de Soleil valued the country so highly that they re-
cently opened their only fixed theatre in the world
for the show ‘Joya in Riviera Maya’18
. Furthermore
the second largest coral reef and the only one in the
northern hemisphere is in the Mexican Caribbean,
while the best kept underwater biosphere reserve is
in de Sea of Cortés. Mexico also boasts more UN-
ESCO heritage sites than any other in the Americas.
The problem is that these few facts, amongst many
others that could help Mexico to position itself as one
of the top 10 most popular countries for tourism in
the world are only known to Mexicans and rarely by
foreigners. Most of the media attention that the coun-
try has received overseas has been linked to drug
cartels, social unrest and safety problems.
Prestige is like wealth; it can grow or diminish accord-
ing to the owners strategy. Perception can change
and in many cases it is wrongly correlated to reality.
City branding is a group of images and associations
that reside in peoples´ mind and “branding” means to
take delivery actions to alter or improve that image.
Mexico needs to establish a strategy to identify the
resources they want to promote and the weaknesses
they want to amend19
.
To date there has been no specific strategy to pro-
mote the good things that happen in Mexico such as
the extraordinary number of artists, authors and ce-
lebrities that live in or have a house in the country.
A well-planned strategy of international position-
ing, country branding and city marketing for sever-
al destinations that are currently underperforming
is not just necessary, it is absolutely urgent.
National Museum of Art
& Statue of Charles IV
Historical Theatre
in Guadalajara
Coral reef in the
Mexican Caribbean
SELF-ESTEEM PROBLEMS
25

WHAT ABOUT BUSINESS TRAVEL,
CONGRESSES AND CONVENTIONS?
The top ten congress and con-
ventions destinations in the
country are Cancun, Mexico City,
Guadalajara, Leon, Los Cabos,
Monterrey, Puebla, Puerto Val-
larta, Riviera Maya and Riviera
Nayarit 22
.
The country is equipped with
first class congress centres in
several destinations, specialized
event management companies,
Professional Conference Organ-
izers (PCO), Destination Manage-
ment Companies (DMCs) etc., all
international organizations have
offices in Mexico, several global
companies have set up in Mex-
ico as an entrance to the Latin
American market, yet destina-
tions themselves focus mainly on
leisure, and even national admin-
istrations lack interest and essen-
tial support for the congress and
convention sector.
For the last 14 years, congress
and conventions were consid-
ered only a part of the larger
Mexico Tourism Board’s (MTB)
promotion strategy, organized
by a small unit of 5 people within
the MTB structure. This summer
the General Director of the MTB
announced the decision to shut
down the Congress and Conven-
tion office and leave its promo-
tional efforts to the MTB’s exist-
ing overseas leisure sales offices
thus reducing further the govern-
ment’s ability to stimulate this lu-
crative sector within the country.
Mexico is the world´s 14th
economy and Mexico City the world´s eighth largest urban economy20
. Busi-
ness travel between Mexico and its neighbours is frequent and high-value yet the country is far from
being a leader in the congress and conventions sector. In a study published in 2011 by the Mexican
Tourism Ministry one can find that the country organized 197,400 meetings where, 131 thousand were
corporate, 28 thousand congresses and conventions, 6,300 incentive trips, 4,400 consumer trade-
shows and the rest, other types of events. 159,900 events took place in hotels and 25,700 in Conven-
tions Centres distributed throughout the country. The rest used museums, sports infrastructure or
universities. Meetings accounted total revenue of 32.5 billion USD in 201021
.
26

Mexico urgently needs a comprehensive strategy based on the creation of a Mexican Convention Bureau
in a similar manner to other Congress and Conventions destinations around the world, arranging bids for
large international events on a regular basis with an experienced and organised team of experts.
Throughout the years Mexico has proven to the world its capacity to hold major events (Eg. Two FIFA world Cups
(1970 and 1986), Olympic Games (1968), G20 meetings (2012), to mention a few).
MEXICO URGENTLY
NEEDS A COMPREHENSIVE
STRATEGY BASED ON THE
CREATION OF A MEXICAN
CONVENTION BUREAU
Auditorio Nacional Mexico city
27

TOURISM AND CULTURE:
LACKING THE ABILITY
TO SUPPORT EACH OTHER
Mexico’s culture is without doubt one of the main reasons for visiting the country because of Its unique blend of
colonial and pre-Hispanic history, (in particular world heritage archaeological sites like Teotihuacan, Chichen-Itza
or Calakmul or Palenque). Mexico has 18723
hundred archaeological sites open to the public. The colonial period
left 10 world heritage cities24
and several baroque towns spread around the territory. In total the country offers
3225
heritage sites which attract millions of visitors from around the world every year.
To overcome these challenges, tourism and cultural strategies should be planned together involving the Tour-
ism Secretary, Conaculta (National Culture Commission), INAH (National Anthropology and History Institute) and
local provincial authorities.
Nonetheless the country’s cultural
strategy is not planned jointly with
that of tourism. In many cases the
aims of projects and programs are
even opposing and usually both
ministries have different opinions
concerning the cultural elements
that influence tourism and vice
versa. For example, when adver-
tisements or documentaries are
filmed in archaeological sites or
museums, the cultural authorities
often make it hard to obtain au-
thorizations, indeed active oppo-
sition to tourism is found in some
sectors of the cultural scene.
INTEGRATION IN PLANNING IS NECESSARY
BETWEEN TOURISM AND MEXICO’S UNIQUE BLEND
OF COLONIAL AND PRE-HISPANIC HISTORY.
The Fine Arts Palace
28

HOW UNSAFE IS MEXICO?
Mexico´s media coverage has being dramatically negative for, at least, the last 5 years. Few good articles or news
items appear in the international media and those that do are quickly overwhelmed by bad news concerning
drug trafficking, confrontations with the police and crime. There is no doubt that the situation in the country is
not good, despite a consistently falling death toll from violent crime over the past two years. The problems sur-
rounding drug trafficking and associated crime make it difficult to convince those who don’t know the country to
visit it for a first time. On the other hand those who already know Mexico, tend to become loyal customers since
they realise that the chances of being affected by the events the media cover are extremely low.
MEXICO’S REAL PROBLEM
IS PERCEPTION AND BRANDING
RATHER THAN REAL DANGER.
It is very important to stress the fact that Mexico, as a
country, and the Capital Mexico City have a low crime
rate compared to popular U.S. destinations26
. México
City registered 9 homicides per 100,000 inhabitants,
a low rate when compared to many large cities in
the US that attract high numbers of visitors. For ex-
ample, Washington´s rate is 21, Miami 15.4, Chicago
15.2, Dallas and Boston 11.3, New Orleans 49.1. While
some cities have double or even five times the crime
rate of Mexico City, their appearance in many strands
of popular culture (news, films, music, TV…) around
the world helps to engender a sense of familiarity
and thus safety among potential visitors, something
which tourism planners in Mexico would do well to
understand. Thus, Mexico’s real problem is percep-
tion and branding rather than real danger.
29

Violence is not widespread over
the country. Rather, it is con-
centrated mainly in rural areas
where cartels escape from fed-
eral control and in specific areas
such as the state of Tamaulipas
(that is not touristic) or the ru-
ral, mountain areas of Guerrero
and Michoacán. Compared to
other competitor countries the
situation is quite similar. In fact,
homicide rates in places like
the Bahamas, Brazil, Jamaica,
Honduras, Guatemala, Ecuador
or the Dominican Republic are
much higher than those in Mex-
ico. However news from those
countries rarely features such in-
depth coverage of these figures.
.
POPULAR VACATION DESTINATIONS
30

Fortunately, the effective use of social media can bypass the traditional media channels that have
a narrower focus on Mexico’s problems, offering a means to reach consumers directly with positive
messages about the country.
From these countries mentioned, Brazil for example
has even managed to turn the extremely dangerous
Favelas into an internationally renowned brand and
even a tourism attraction. Lately films like Hulk, or the
World Cup Promotions used Favelas as part of the at-
tractiveness of the country combined with many other
things like the jungle, the beach, samba, Bossa Nova,
Football and other typical national elements.
Greater press freedom in Mexico has allowed stories to
reach the outside world faster than would be the case
elsewhere in the region. Some destinations are imple-
menting inventive campaigns, like Colombia’s use of
the slogan ‘the only danger is you’ll want to stay’ which
is a clever way of addressing the country’s declining
violence while assuring visitors that they will have a
good time.
As a first step towards gaining some degree of con-
trol of the country’s perceptions from abroad, Mexico
needs a strategy to generate positive content. To date
there have been no major epic films about the con-
quest of the Aztecs or life in contemporary Mexico. No
TV series present the good part of living in the country
while concerts, exhibitions and other cultural events
make millions of dollars in the country but no consist-
ent strategy gives the follow up that lets the world
know about it.
Many countries have already learned to use other
promotion channels aside from traditional advertis-
ing. Indeed advertising rarely works when a country or
brand’s reputation is bad because it is simply not cred-
ible. In the end it becomes a waste of financial resourc-
es. Mexico should therefore cut down its spending on
traditional advertising and channel it into alternative,
creative ways of promoting the country differently,
through art, music, movies, videos, books, celebrities,
and attractive international events.
MEXICO SHOULD CUT DOWN
ITS SPENDING ON TRADITIONAL
ADVERTISING AND FOCUS
ON CONTEMPORARY
MARKETING PRACTICES.
31

MEXICAN
TOURISM
AND GLOBAL
TRENDS
TO TAKE
ON BOARD
32

Although the issues discussed in Chapter 2 tell a lot about the pros-
pect of strengthening the competitiveness of the Mexican tourism
sector, both public authorities and the private sector must at the
same time take into account the consequences of a series of wider
global trends occurring in travel and tourism. These trends are af-
fecting supply and demand in a manner which shows their capacity
to set new standards for service delivery in tourism industry.
Toposophy’s team of analysts around the world continually monitor
trends in the tourism industry and the ways in which destinations are
adapting to them. Here we present a range of trends that are relevant
to Mexico’s emergence as a leading tourism destination.
CHAPTER 3 | MEXICAN TOURISM AND GLOBAL TRENDS TO TAKE ON BOARD
Paseo de la Reforma at El Angel
33

MARKET SEGMENTS
AND CONSUMPTION TRENDS
The range of challenges
and opportunities
associated with
new competitive
destinations.
The need to use
new alternative
promotional channels
given country’s current
reputation.
A key point is that Mexican tourism stakeholders
need to continuously assess different drivers of
consumer behaviour from a micro to a macro level
of analysis and identify clever ways that will help
them upgrade and tailor their products and services
to meet the demands of both individuals and large
groups of travellers.
The travel habits
and attitudes
of younger generations
of travellers.
The need
to concentrate
on niche markets
The need to recognise
and react to the power
of congress
and convention tourism
The central role
the internet plays
in travellers’ daily
routines and habits.
The economic
recovery
of the United States.
The first group of ongoing trends focuses on the behaviour of tourists and identifies patterns of transformation
influenced by of political events, growing spending patterns, changing demographics, and the widespread use
of ICT. They can be grouped as follows:
3
The Economist. “America’s economy How strong is it?” November 2014.
Clearly the economic growth of the main source
market will have an impact on the Mexican tour-
ism industry. According to new data the US econ-
omy grew at a 3.9% annual pace in the third quar-
ter of 2014. That was an upward revision from the
advance estimate, of 3.5%3
.
34

Mexico´s tourism stakeholders, mainly those that belong to older generations, developed their businesses in a
completely different social and economic environment to that of today. For decades Mexico was the main des-
tination for a large proportion of US and Canadian travellers. During the last 20 years many destinations in the
region have emerged with strong strategies to capture increasing market shares.
For example Caribbean countries such as Cuba or the Dominican Republic have been attracting visitors as well
as investment, creating major competition for Mexican beach destinations, and forcing prices down in the region.
As for nature and adventure tourism, Costa Rica has managed to position itself well in European and North
American markets, while their range of tourism products is similar to that of Mexico´s southern states and per-
haps less varied than what Mexico has to offer.
A ‘BUSINESS AS USUAL’
APPROACH HAS BEEN
RESPONSIBLE FOR REDUCED
GROWTH IN MEXICAN TOURISM
Meanwhile Panama has made major efforts to become
the air transport hub in Central America and an impor-
tant business destination. Furthermore the cruise indus-
try there has evolved from the times of the “Love Boat”
(The famous 80´s TV series) offering dynamic multina-
tional cruise experiences.At the same time Mexican Pa-
cific cruises lost much of their competitive appeal offer-
ing little variation in experiences between the six ports
that were used by most cruise lines.
While these countries found niche markets or com-
peted directly with products offered by Mexico, many
Mexican destinations continued with a ‘business as
usual’approach, often failing to seewhatwas occurring,
leading to the obvious results of reduced growth or loss
of some market segments.
Clients used to come flooding to these Mexican des-
tinations and when they stopped doing so, companies
took too long to react and attract them with more inter-
esting offers, better websites, new hotels and facilities
or new products.
NEW AND
AGGRESSIVE COMPETITORS
35

In short, major and detailed strategic planning is needed to create thriving, attractive and distinctive tourism
experiences that can offer effective competition to competing destinations both near and far by using the great
cultural, natural and social assets that the country has.
36

HEY BIG CHINESE SPENDER!
As a general trend, international experience shows
that shopping is an attraction in itself for Chinese
tourists, who not only cherish products purchased
in another country as symbols of their travel experi-
ence but also often enjoy lower prices and greater
assurances on product quality compared to back
home28
. Quartz29
underlined in February 2014 the
positive effect of Chinese tourist spending to the
French economy due to their pursuit of expensive
purchases and luxury designer brands. Likewise,
Hotels.com30
reported in July 2014 that the mean
average spend per day of Chinese tourists when
travelling abroad is nearly $US 1.090 excluding ac-
commodation expenses.
Many destinations have sought to design strate-
gies to attract the Chinese tourism even when their
product is not ready to receive them, and these are
not necessarily a priority for the Chinese travellers.
For the time being at least, this has been character-
istic of Mexico’s approach to the Chinese outbound
market.
MEXICO HAS BENEFITTED
FROM THE CHINESE
GOVERNMENT’S APPROVED
DESTINATION STATUS
SINCE 2005
Chinese outbound tourism epitomises the value of building and sustaining a solid relationship with markets from
emerging economies. Since the announcement of massive spending totalizing US$ 102 billion in international
tourism in 201227
, Chinese tourists have rapidly emerged with an unquestionable lead in global tourism expendi-
ture and drawn the attention of destinations around the globe, as they comprise a vibrant mix of big shopping
spenders, cultural explorers, and tech-savvy consumers. Fortunately for Mexico, the number of destinations on
the radar for Chinese travellers has also been rapidly expanding. Mexico’s preparedness to receive them will be
discussed further below.
37

For several years now, Mexico has been in the com-
petitive international arena, fighting to attract Chinese
tourists without really understanding the market and
its implications. However, Mexico has benefitted from
the Chinese government’s Approved Destination Sta-
tus since 200531
.
Aeromexico began operating a flight from Tijuana
(Mexico) to Shangai in 200832
with relative success
from Tijuana (carrying passangers that might have
taken a flight from L.A.). The Mexican Tourism Board
opened an office in China and several official trips,
fam trips, advertising campaigns and other initiatives
have taken place with little analysis on the return on
investment since in 2012 only 47,810 Chinese tourists
visited Mexico33
. At the same time, there appears to
have been little analysis of whether there are other
potential markets closer and with specific needs that
might bring better results and greater ROI. Sugges-
tions would include Brazil, South-Korea, and markets
in the Middle East countries, Australia or Russia.
The fact is that for first time long haul travellers from
China, Mexico is a relatively unknown destination.
While economic growth in both China and Mexico has
favoured business travel between the two countries,
there is a significant cultural and geographical divide
between them that inhibits the growth of the lucra-
tive Chinese leisure traveller. Besides, those Chinese
travellers that have the time and financial resources
to travel outside of Asia have shown an overwhelming
preference for visiting destinations in Europe and the
US.
France, Germany and the UK have all witnessed inbound growth in visits from Chinese travellers in excess of 10%
per year for the past years, while the US alone (with similar distance from China as Mexico) saw a 23% increase
in 2013 in arrivals from China34
. Finally the language barrier remains an important challenge for new inbound
markets to Mexico (and not just from China). Traditionally English helps when travelling in Mexico, but in many
important Mexican destinations it is still hard to find many English speaking services . Visitors from sources
such as the US are used to communicating a little in Spanish but when it comes to the Chinese market it is a
completely different story. Most Chinese travellers (particularly those who haven’t studied abroad or have much
communication with overseas clients) find it difficult to communicate in English, let alone Spanish, which isn’t
widely taught in China.
ENGLISH HELPS WHEN TRAVELLING IN
MEXICO, BUT IN MANY IMPORTANT MEXICAN
DESTINATIONS IT IS STILL HARD TO FIND
MANY ENGLISH SPEAKING SERVICES
As a basic approach, authorities should therefore work with Chinese-Mexican communities, prepare
information printed and online in Chinese and prepare at least some stakeholders in all areas (trans-
port, hotels, restaurants, attractions) to be able to properly take care of these clients before thinking on
investing in those markets.
38

MILLENNIALS
ARE SETTING THE AGENDA
In the forthcoming months, affluent Millennials will be
the market group that is most likely to engage in aug-
mented reality and test wearable technology devic-
es. Their predisposition to create and adopt disrup-
tive business models makes it highly probable that
other new formats will emerge from this generation
that will seriously test the status quo for the industry.
For the time being, the great shift of travel products
and services online (an environment in which Millen-
nials are the most comfortable) has also given the
consumer freedom to search and choose, and in
making that choice, it is now the opinions of friends,
relatives and other consumers that matter the most.
By far the chosen medium for doing this is via social
media which allows for the exchange of opinions on
travel experiences from trusted sources.
As we enter 2015, it is evident that Millennials (those born between 1980 and 1999 and currently aged around
15-34) are just warming up in their travel quest saga. Making the most of information and communication tech-
nologies, Millennials question the way things are done and are rapidly changing the world as we know it. For the
tourism and hospitality industry, their self-assurance has brought with it a storm of new consumer expectations
creating a system in which successful destinations and businesses will be those which explore and respond
positively to the broad spectrum of economic, societal and environmental changes that are taking place, espe-
cially those driven by the Millennial generation.
39

For the Millennial generation in particular, social media has become the key resource for news, gossip, inspira-
tion and advice for matters as diverse as holidays, consumer goods, music, fashion, politics or relationships. The
internet and social media have encouraged this generation to share their opinions freely, fuelling the popularity
of review sites such as TripAdvisor,
In fact, it is traveller review sites that have quickly become the first stop for consumers looking for an honest first-
hand opinion about their proposed destination, hotel, restaurant and more. With 280 million unique visitors per
month in 2013, TripAdvisor is the world’s largest travel review site and owner of an array of travel media brands
offering specialist reviews on cruises, family holidays and airline services.
The result of this for destinations such as Mexico is
that the traditional one-way flow of information from
the supplier to the customer is rapidly going out of
date. Instead, the rapid spread of social networks has
given rise to the direct customer-supplier ‘conversa-
tion’, bypassing the traditional media sources such as
TV, magazines, newspaper adverts or even a compa-
ny’s own web pages. Social media and travel review
sites have given consumers the role of both brand
ambassadors and consumer activists, allowing users
to recommend their best experiences and denounce
their worst in real-time.
Wi-Fi is widely available throughout the country but
software, apps, web pages, presence on social me-
dia, blogs, and other information, promotion and web
presence tools are far behind those of other com-
peting destinations. Thus, Mexican authorities and
private companies have considerable room to grow
and deepen their web profile, alternative media and
in general communications strategies.
MILLENNIALS BRING
A STORM OF NEW
CONSUMER EXPECTATIONS
40

THE
SILENT TRAVELLER
Mobile devices such as tablets and smartphones are rapidly becoming the principal device through which peo-
ple manage their lives online. For young, independent travellers in particular, the smartphone or tablet is the first
port of call to resolve the types of challenges that customer service staff used to deal with. Skift has labelled
this kind of traveller the ‘silent traveller’35
in light of his or her self-reliance and low levels of interaction with staff
through traditional channels such as the reception desk of the call centre.
SILENT TRAVELLERS
HAVE SELF-RELIANCE
AND LOW LEVELS
OF INTERACTION
WITH STAFF
41

Globally, it has been observed that travellers have been slow to move from information gathering (done on
smartphone or tablet) to booking with the same device, particularly for big-ticket items such as flights or ac-
commodation. According to IPK International36
, mobile bookings remain at only 2% of overall bookings globally,
however there is evidence to suggest that this is changing rapidly. Nevertheless, smartphones and tablets are
consolidating their position at all the other stages of the customer journey; for becoming inspired, for research-
ing, for experiencing, sharing and reflecting on journeys made – all through social media. The real-time conver-
sation between customers, their online community and brands is having profound consequences for providers
throughout the tourism value chain; those who fail to innovate and keep up with these trends may rapidly be-
come obsolete.
Against this backdrop, it is especially important to consider that younger travellers from the main emerging out-
bound markets (as identified above), have never accessed internet through a PC, instead using smartphones as
the first and only tool with which they are familiar, to manage their professional and personal lives37
.
Some countries have armies of young internet experts working on the web to attract attention to their destina-
tions; in Mexico some local officials don’t even use social media. The generational gap needs to be filled in order
to attend the growing number of web buyers and clients. Having a strategy for mobile marketing and customer
engagement is also essential, since so many consumers are skipping the desktop and moving straight to using
hand-held devices.
Given the integral position of the smartphone as a key tool of interaction for researching, planning, booking
and recording travel experiences, it is absolutely vital for Mexican tourism businesses and destinations to
have at the most basic level a presence online and in all the major social networks for their particular target
markets.
MANY CONSUMERS ARE SKIPPING THE
DESKTOP AND MOVING STRAIGHT
TO USING HAND-HELD DEVICES
42

GETTING THE NUMBERS
RIGHT MAKES FOR BETTER
LOCAL DECISION MAKING
A local system of surveys and data collection is also one of the pressing tasks to be addressed by DMOs.
As mentioned above, the country needs to install a national DMO network in order to make sure that local
policy issues that are not currently being addressed can be solved, and by doing so strengthen the capacity
of local tourism authorities and stakeholders to act in a professional and coherent way.
Mexico was one the first countries to have established
a tourism satellite account, therefore on the national
level, information and statistics are recognised as im-
portant elements for decision making. When it comes
to the local level the scenario is completely different.
Many states don’t have a reliable basis for analysing
tourism flows and most observatories are still at a de-
velopment stage.
The problem of lacking reliable local data should be
addressed immediately in those states which are lag-
ging behind. Knowing the volume and the economic
value of tourism is an essential prerequisite for devel-
oping effective policies for managing tourism within
local areas.
Tourism economic impact studies also play an in-
valuable role in supporting tourism services. Further-
more, the evidence they provide the justification and
rationale for local authorities to invest in initiatives to
support tourism industry.
Aqua Azul waterfall, Chiapas, Mexico
43

THE EVOLVING NATURE
OF THE TOURIST EXPERIENCE
As discussed throughout this document the tour-
ism sector in Mexico is strong and the attributes
the country has to offer are wide-ranging. The in-
frastructure is there, or on its way; there are many
hotels and restaurants and transport infrastructure
is in the pipeline. However what tourists anticipate
before their trip and expect when in the destination
adds up to more than these attributes.
Today, the notion of ‘the tourist experience’ is what
drives successful marketing campaigns and en-
sures that tourists leave satisfied, having got the
most out of their visit. Mexico therefore needs to
focus closely on the tourist experience. Many tour-
ism destinations in the country have set up the ba-
sic infrastructure but too easily neglect to develop
and market complementary services. Sometimes
the reverse can be true; several promotions for one
destination feature a magnificent lake, people surf-
ing or paragliding while in the destination itself, few
companies or none offer these services, access is
difficult or infrastructure is not adequate.
THE ‘TOURIST EXPERIENCE’ NOTION
IS WHAT DRIVES TODAY SUCCESSFUL
MARKETING CAMPAIGNS
44

Almost all the coastal Pacific destinations such as
Mazatlán, Los Cabos, Manzanillo, Ixtapa or Huatulco
show surfers but outsiders may find it very hard to find
a company that offers courses, rents a board and pro-
vides the equipment to ensure that even visitors can
leave having enjoyed a complete experience. The
same thing happens when it comes to observing jag-
uars in the Mayan region, paragliding in the mountains
or simply hiking in the national parks; there is an ab-
sence of joined-up planning when it comes to inform-
ing visitors about and providing these services.
Some marketers appear to consider that the aspira-
tional component of advertising these experiences
will be forgotten when the client spends two days at
the beach, eats in a good restaurant and has a nice
hotel room. In reality, the client might leave with a bad
image of not fully experiencing what he had in mind
before taking the plane.
There is still much room for improvement in training, quality assurance and marketing for those
who offer supplementary visitor services and authorities have a role to play in creating strategies
to help them grow and deliver real 360ο experiences.
Ik-Kil Cenote, Chichen Itza, Mexico
45

GETTING DREAMS
OFF THE GROUND
Many students finish tourism schools with a fixed
idea; to, work in a hotel, travel agency or in the best
case scenario, in an airline. However the reality is that
many of them spend some time in poorly paid work
in hotels and restaurants or simply move to work in
other industries. Scarce attention has being given to
the creation and support of new tourism companies
offering thriving experiences like surfing, diving, trek-
king, handcraft learning or catering and there is a gulf
between young people’s aspirations and actually set-
ting up a successful business that puts their dreams
into practice. The fact is that small businesses (‘tour-
ism verticals’) are essential to guaranteeing a qual-
ity visitor experience and avoid the disappointment
of not being able to experience the activities that at-
tracted them to the destination in the first place.
This is not just the case in beach destinations; some
magnificent archaeological sites located in the wild
have no range of tourism products that would en-
courage visitors to increase their stay for a day or two.
Local handcrafts ateliers, agricultural tourism or trek-
king expeditions and fauna observation could com-
plement the main range of services offered.
LOCAL HANDCRAFTS ATELIERS, AGRICULTURAL
EXPERIENCES OR TREKKING EXPEDITIONS AND
FAUNA OBSERVATION CAN BE ADDED TO THE
TOURISM PRODUCT OF MEXICO
46

We suggest the creation of a national business incubator network that could asses and support entre-
preneurs and give ongoing support of at least three years for tourism enterprises .
ENTREPRENEURSHIP
IS ONE OF THE MAIN KEYS
TO JOB GENERATION AND
GROWTH.
Entrepreneurship is one of the main keys to job generation and growth. It can enhance the competitiveness of an
area: new entrepreneurial initiatives put pressure on existing businesses, which are then obliged to improve their ef-
ficiency and the quality of their product or service. However it is still somewhat lacking in Mexico’s tourism industry.
Of course, ensuring a viable community requires a solid economic base. Newly established enterprises are es-
pecially vulnerable in their first years, so long-term involvement of the incubator through regular consultation
and feedback can be necessary. Mexico has already a business incubator system for other industries to promote
entrepreneurship in communities that have no entrepreneurial culture38
.
University of Guanajuato (Mexico)
47

ALL-INCLUSIVE HOTELS
GO UPSCALE
Widely acknowledged as a motor
of the hospitality sector worldwide,
all-inclusive hotels have begun to
resemble low-cost carries in their
efforts to improve product quality
and integrate more closely their ac-
commodation establishments with
the wider area of each destination.
For major destinations in the Medi-
terranean, the Caribbean and par-
ticularly in the Mexican beach des-
tinations, it is a crucial debate given
that the all-inclusive industry has
been subject to criticism by Tourism
Concern39
and the Tourism Foun-
dation40
for providing limited ben-
efits to local economies as well as
less favourable working conditions
than other areas of the hospitality
market. In almost all Mexican beach
destinations, restaurants complain
about the all-inclusive systems that
handle large number of tourists
while the local food and beverage
sector struggles.
In response, all-inclusive hotels have become more
open to embracing what Skift41
has called ‘the rise
of local in hospitality’. The idea that a sense of local
culture can pervade every aspect inside all-inclusive
hotels as a stimulus for further growth outside is no
longer regarded as a contradiction in terms. It is un-
likely that all-inclusive hotels will ignore the sophisti-
cated needs of an increasing percentage of tourists
who seek to combine organised entertainment and
favourable pricing with memorable moments that
they can share through social media. An argument
provided in a recent article by HotelNewsNow.com42
is that the growing expansion of international chains
into the all-inclusive industry will enable the renewal
of customer service perceptions and local com-
munity engagement with the potential to add value
through the participation of tourists in thematic activi-
ties such as cultural tours and special events.
48

Mexican Caribbean destinations (Cancun, Cozumel and Riviera Maya) differentiate their product from other
all-inclusive Caribbean destinations like Cuba or Dominican Republic by promoting the Mayan archaeologi-
cal sites, the Mexican Food and in general, better food and service in their hotels and the possibility to dine
outside and spend time outside the resorts which actually involves less costs of food and drinks for the
hotels.
For Ernst & Young43
, major traditional US and European lodging brands have decided to step up into the all-inclusive
industry with an eye on the spending habits of Millennials along with the rising middle-class from emerging econo-
mies. Some have even launched their own custom brands to cater specifically to this demographic. Currently, this is
another case of product repositioning aimed at untapped market niches, with transitional phases at both ends of the
travel spectrum promoting the adoption of higher quality standards.
The same argument also relates to the development of brands aimed at targeting specific groups of customers along
with the provision of higher quality food and entertainment.
49

BOUTIQUE HOTELS,
SAVING HERITAGE BUILDINGS
FROM TIME EFFECTS.
Mexico´s destinations have several historical heritage
buildings, some of which can be visited like museums,
but with most only visible from the outside. Some oth-
ers are used for offices or simply abandoned. Boutique
hotels and restaurants in several destinations have
played a key role in the recovery, preservation and im-
provement of old heritage houses and buildings that
might be lost otherwise.
This phenomenon is not unique in Mexico, the use of
unique historic buildings for tourist accommodation has
become popular worldwide. In Mexico, boutique hotels
should play a big role in this resurgence, given the in-
crease of buildings available for rehabilitation, the value
added opportunities they offer, their generally relatively
smaller physical size and the potential to put together
innovative financial structures44
.
Boutique hotels tend to concentrate in an upscale market and are known to create larger economic impact
per client than mass tourism hotels45
. Mexico should create a specific strategy to promote boutique hotels
and restaurants, improve their “Tesoros de México” program and make it a national program instead of
covering only a handful of states.
BOUTIQUE
HOTELS TEND
TO CONCENTRATE IN AN
UPSCALE MARKET AND ARE
KNOWN TO CREATE LARGER
ECONOMIC IMPACT PER CLIENT
THAN MASS TOURISM
HOTELS
characteristic XIX century hacienda in Mexico.
50

DOES
SUSTAINABILITY ‘SELL’?
As a result, the terms ‘green-washing’ and ‘grey-washing’ have come to a point where they both carry equally
negative connotations. Green-washing denotes controversial practice whereby consumers begin to perceive
products or production processes more positively on the basis of misleading information about their actual
degree of sustainability. Grey-washing is a keyword for the failure of tourism industry to undertake substan-
tial investments in sustainability and engage in dialogue about the subject with customers, employees, and/or
stakeholders. Against this unnecessary dualism, an encouraging sign is that major industry groups such as TUI
have decided to speak more openly about sustainability and put forward examples of responsible credentials47
.
Acommon theme in the discussion ofprevious trends is
that the growing self-awareness and confidence of in-
dividual travellers has contributed to capacity-building
for a variety of groups of travellers, who appear more
empowered than ever to harness the brands of both
their favourite destinations and service providers. This
does not necessarily have to be a straightforward pro-
cess for business sustainability. The European Tourism
Futures Institute46
has noted that people as citizens are
in favour of sustainable practices, but as consumers the
vast majority do not want to be confronted with sustain-
ability and the problems that relate to it.
Waterfall and a hanging bridge at basaltic prism canyon at Hidalgo, Mexico.
51

From the perspective of customers, however, the latest report of Blue & Green Tomorrow suggests a variety of
questions people should ask in relation to their own behaviour (e.g. whether they contribute to water conserva-
tion or if they avoid the use of plastic bags and bottles) and the practices of the destinations they visit and the
brands they choose during their holidays or business trips. The power to disseminate viewpoints and impres-
sions based on facts is a breakthrough for both corporate and individual responsibility in tourism development.
Hence, DMOs are recommended to enrich their policy agenda and play a critical role in encouraging local entre-
preneurs and residents to associate actively with visitors and help them spread the word about their areas and
the achievements they have made to drive sustainability.
Many Mexican destinations are dependent on natu-
ral assets such as beaches, rivers, canyons, forests,
volcanoes or mountains. Some of them have envi-
ronmental problems like water pollution in Acapulco
and Cañon del Sumidero or the extinction risks of the
Vaquita Marina in the Sea of Cortés.
Destinations that promote such elements as part of
the attractions should generate immediate strategies
to preserve and improve the environmental condi-
tions in order to remain competitive. Instead of being
a reason to travel or to visit again, poor environmental
conditions can quickly turn into a weakness for these
destinations.
THE POWER TO DISSEMINATE VIEWPOINTS AND
IMPRESSIONS BASED ON FACTS IS A
BREAKTHROUGH FOR BOTH CORPORATE AND
INDIVIDUAL RESPONSIBILITY IN TOURISM DEVELOPMENT
52

SIX
STEPS
TO
BOOSTING
MEXICAN
TOURISM
53

According to the analysis set out in this report, Toposophy experts have
identified six areas that the Mexican tourism sector is recommended to
focus on and make important steps in order to make current growth truly
sustainable. These areas are not intended to cover the full agenda of on-
going priorities; rather they outline the wider framework of policy issues
which should attract the attention of all stakeholders involved in Mexican
tourism in the near future.
CHAPTER 4 | SIX STEPS TO BOOSTING MEXICAN TOURISM
Sources: photosbychris.smugmug.com
54

ALTERNATIVE
PROMOTIONAL STRATEGIES
Mexico should try to implement non-conventional promotional strategies given that in the current context of
Mexico’s struggle to beat violent crime, traditional advertising has less credibility. Important destinations like
New York, Barcelona or Dubai are investing in movies, music videos, video games, apps or TV series to promote
destinations´ attractions, art de vivre, cultural events, festivals and in general to transmit the message of a vibrant,
interesting, global and safe destination and the Mexican authorities should learn from these practices.
At the same time, national, regional and local au-
thorities lack a clear social media strategy. Offi-
cials in the Mexico Tourism Board, the provincial
tourism ministries and the local tourism entities
(not really DMOs) do not yet appear to have un-
derstood the size and impact of social media in
their target markets. Mexico as a national des-
tination and almost all local destinations (ex-
cepting Los Cabos and Cancun) have not paid
enough attention to the main social media net-
works such as YouTube, Twitter, Facebook, Ins-
tagram and other platforms that could increase
Mexico’s presence on the web and in the mind
of the potential visitor. Even when private com-
panies understand and have much better use of
these tools, there is still a large number of ho-
tels, restaurants and attractions that have limited
presence on the web.
High visibility events like concerts, sports or in-
ternational film, fashion or food events should
be organized and promoted and seized upon to
position the country and its destination amongst
the top countries in the world in each field. For
example Formula 1 is coming back to Mexico in
2015 after 22 years of absence, this is a golden
opportunity to attract attention to the country
and maximize international appearances. .
HIGH VISIBILITY
EVENTS SHOULD
BE ORGANIZED AND
PROMOTED AND
SEIZED UPON
55

Other countries have shown appealing results from implementing such institutions. For example
recently Spain analysed the German, French and other strategies in order to create the Spanish
convention Bureau. A similar exercise is needed to evaluate the country’s actual needs and the
right formula that Mexico should implement.
MAKE CONGRESS AND
CONVENTIONS TOURISM
A KEY ELEMENT OF
THE NATIONAL STRATEGY
Mexico is the third commercial partner of the US after Canada and China49
,
though in terms of congress, conventions and events the number of US events
in Canada far outnumber those held in Mexico. There is a huge opportunity for
growth in this strategic sector that authorities should not only treat as a tourism
segment but as a key driver of economic development, R&D, knowledge trans-
fer and commerce touchstone for the future development of the country. Mex-
ico has an urgent need for implementing an integrated congress and conven-
tion policy including the creation of a Mexico Convention Bureau if the country
really wants to be taken seriously in the international convention market.
THE DEVELOPMENT OF
AN INTEGRATED CONGRESS
AND CONVENTION POLICY IS
A KEY PRIORITY
56

• A profound impact upon culture and lifestyle as well as upon the interactive nature of tourist experience, whose time hori-
zon extends nowadays long before the arrival of visitors and long after their departure.
• A dramatic effect on the rise of online reputation management, with businesses following clients’ reviews, reacting swiftly
and sensitively to poor reviews, and building client relationships through maintaining a continuous conversation with them in
the place where they are to be found: that is, online, 24/7.
• A significant influence to the growth of search engine marketing including both paid search and organic search results.
BRIDGE
THE DIGITAL DIVIDE
It is essential for Mexican businesses and destinations to close the gap in the usage of technology compared
with the majority of countries in the competitive tourism markets. Besides the development of functional, visually
appealing and multilingual websites, the scope of action in B2C marketing is wide given the wealth of opportuni-
ties provided by the applications of social media and mobile devices. The first step, however, is to gain a proper
understanding of how technology has:
It is not enough to have someone at the office that opens Facebook or Twitter from time to time to post
a few photos. Some destinations employ 3 or 4 people to spend 8 hours a day following up, answering
on TripAdvisor, liking comments about the destination and feeding the web with constant news, on
real time. Sales have proven to increase dramatically. Furthermore, this activity is set to develop into
a 24 hour job.
57

FINDING
NEW NICHE MARKETS
SOME NICHE MARKETS
ARE COMPLETELY
IGNORED IN NATIONAL
AND LOCAL STRATEGIES
• Mexico counts 1,096 bird species identified,
while the world has 9,600; consequently Mexican
birds represent 11% of all birds in the planet51
.
• The state of Oaxaca alone offers 736 bird species.
• In the USA, birdwatchers are estimated to spend
over $2.5 billion each year. In the UK, expenditure is
estimated at $500 million each year52
.
Mexico (as mentioned before) is a mature destination
used to doing business with the same clients, year af-
ter year. However the game has entirely changed and
travellers now have more choice of destinations (that
are more accessible) than ever before. Mexican des-
tinations therefore cannot assume that things will stay
the same forever. Some niche markets are completely
ignored in national and local strategies. While millions of
US dollars are invested in golf courses to attract 25 mil-
lion people market from the US, no Mexican destination
is investing in areas such as bird watching, a market of 47
million people and 17 million potential travellers50
in the
US alone and for which Mexico needs no major invest-
ments. Mexico is the 5th most biodiverse country, 2nd in
the world for reptiles, the 3rd country in number of mam-
mals, 4th in amphibians.
In spite of these impressive figures, no single Mexican state has a clear defined bird-watching strategy or infra-
structure, while having the assets to create a spectacular destination and the largest potential market for this
activity on its doorstep right next door.
Several niche markets can offer Mexico new amazing possibilities to develop alternative offer, increase tourism
revenue, reduce seasonality and create jobs.
58

INVESTMENT
IN HUMAN CAPITAL
The investment of money and time implied from the
previous recommendations is not going to be effec-
tive and efficient in the medium- and long-term, unless
there is a concerted effort to enhance the knowledge
background of people involved in the Mexican tour-
ism sector. This matter goes beyond the purpose of
research as a tool to support strategy preparation and
implementation in tourism policy. It is more suggestive
of challenges involved for destinations and businesses
to stay competitive, provide high-quality services, and
be aware of the dynamic environment of the interna-
tional tourism market.
Mexican universities teach tourism almost everywhere in the country but the ap-
proach is extremely narrow as it tends to create professionals that consider tour-
ism only from the hotel-restaurant perspective. Neither entrepreneurial skills are
included, nor high-tech tools nor niche market knowledge is offered on specializa-
tion courses.
instead of 4-5 year graduate studies. Technical skills such as hotel accounting, res-
ervations systems or web promotion, are extremely necessary. Tourism, being a
major part of the economy, cannot be approached through a myopic point of view
and a whole range of knowledge tools should contribute to preparing young men
and women for the future of this noble industry.
Mexican authorities and private schools should ensure that more on-the-job train-
ing skills are included in the curriculum and promote short term formation centres
59

MAKE TOURISM THE CLEANEST
INDUSTRY IN MEXICO
Natural assets are part of the value of Mexican tourism destinations. Rivers, lakes, forests and beaches are the
main reason or an important part of the decision making when choosing a tourism destination and evaluating
activities that can be performed in it. Unfortunately, many natural areas suffer negative ecological impacts. Even
when tourism is not directly responsible for environmental harm, it can be an important part of the solution.
Mexican authorities and companies should prepare a clear strategy to identify the activities that have an impact
on the environment, implement specific actions and regulations to diminish the ecological impact of tourism and
even transform tourism into a catalyst of environmental improvement (forest recovery, coral reef recovery, water
cleaning).
Mexico could implement a national parks system and contribute directly to the conservation of sensitive
areas and habitat. Revenue from park-entrance fees and similar sources could be allocated specifically to
pay for the protection and management of environmentally sensitive areas. Special fees for park operations
or conservation activities could also be collected from tourists or tourism companies53
.
Church of Santo Domingo de Guzman in Oaxaca, Mexico
EVEN WHEN TOURISM IS NOT DIRECTLY
RESPONSIBLE FOR ENVIRONMENTAL HARM,
IT CAN BE AN IMPORTANT PART OF THE SOLUTION
60

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SOURCES
61

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