Mexico ­ Economic, environmental & socio-cultural impacts of tourism: An analysis from Mexico

Nadine Poser

18/4/2008

Economic, environmental & socio-cultural impacts of

tourism: An analysis from Mexico

Nadine Poser, Student. The Emirates Academy, Dubai, United Arab Emirates

Nadine Poser

Executive Summary

Tourism industry has evolved to a leading economic factor for many countries.

According to the World Tourism Organization, tourists are people who "travel to and stay in

places outside their usual environment for not more than one consecutive year for leisure,

business and other purposes not related to the exercise of an activity remunerated from within the

place visited" (UNWTO, 2007). The agency examined that there were over 846 million

international tourist arrivals in 2006. The industry has become essential for many countries.

Tourism generates different kinds of revenue that can contribute to the host country′s welfare.

Further, with the development of resorts, jobs are created in sectors directly or indirectly related

to tourism such as transportation, accommodation and entertainment services.

The following report investigates economic, environmental and socio-cultural impacts in Mexico

caused by the tourism industry. Positive as well as negative influences will be investigated.

Furthermore, the paper will have a special focus on Cancún, a mega resort built by a

governmental agency within only a few years. Mexico accounts to the leading tourism

destinations among developing countries. Despite its wonderful beaches and the different kinds

of activities such as water sports, deep-sea fishing, diving Mexico offers a wide range of culture

and history. Ancient Maya sites, for example Tulum or Chichen Itza being the most popular

attraction with tourists.

Nadine Poser

Introduction

The Federal Republic of Mexico is located in Middle America, bordering the Gulf of

Mexico and the Caribbean Sea in the east of the country and the Pacific Ocean in the west. As

one can see in Appendix A, the three adjoining states are the United States in the north and

Belize and Guatemala in the south. The capital is Mexico City. The population of Mexico is

approximately 105 million of which the greatest part are Mestizos (Amerindian-Spanish). 89

percent of the people are Roman Catholics. Due to Spanish influences Spanish is still the official

language. However, over 100 Native American languages still exist.

Cancún is the most visited tourist destination in Mexico. It is located in the east of the country in

the State of Quintana Roo at the most southern tip of the Yucatan Peninsula. The resort is

divided into a hotel section along the seaside and Cancún City on the mainland. Sports facilities

such as golf courses, tennis courts and abandoned lagoons for scuba-divers as well as a great

biodiversity make Cancún a destination popular with tourists. The resort earns 25 percent of

Mexico′s tourism revenue.

In terms of tourism, Mexico ranks on number eight of the world′s tourism destinations with 21.4

million tourist arriving in 2006 (WTO, 2006). Mexico is Latin America′s leading destination.

Despite its dry and mild weather all over the year, the wonderful beaches and beautiful

landscape, Mexico has a big advantage over other destinations: its proximity to the US.

Approximately 90 % of the tourists visiting Mexico are from the USA, 4 percent are from

Europe, 3 percent are from Canada and 2 percent are from other Latin American countries

(Kersten, 1997). In the past couple of years, tourism became Mexico′s second biggest earner,

behind manufacturing, outrunning the oil industry. With occupancy rates of 86% tourism

industry is booming (Friedland, 1999). According to Clancy Mexico became the country with the

highest number of foreign affiliated hotel rooms among the developing nations in 1998 (1998).

Economic Impacts

The most significant positive economic impact in the tourism industry is achieved by

direct revenue resulting from traveling activity by tourists. As displayed in figure 1, the

International Tourism Receipts of Mexico have been growing steadily until 2004.

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Nadine Poser

Figure 1

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′

-

- % 9

#

Source: The World Bank. (2007)

Included in tourism receipts are taxation revenues. Two categories of taxation can be

differentiated. Taxes charged directly to tourists are entry and exit taxes, air passenger duty, bed-

night taxes for hotels and accommodation and also VAT charged by restaurants and groceries.

The second group is taxation charged to the tourism business such as fuel taxes, duties on the

tourist equipment that is imported to the destination as well as property and corporation taxes.

An additional important impact which is directly related to the tourism receipts is the

contribution to GDP. According to the World Travel & Tourism Council (2008) the contribution

of Travel & Tourism to Gross Domestic Product is expected to rise from 14% in 2008 to 15.2%

by 2018.

Tourism has also a direct impact on the employment in the host country. In 2005, 1.9 million

jobs were directly associated with the Mexican tourism industry. As the WTTC found out, the

contribution of the Travel & Tourism Economy to employment is expected to rise from

6,633,000 jobs in 2008, which is 14.3% of total employment to 8,100,000 jobs, 15.7% of total

employment in 2018. This means that 1 in every 7 jobs will be directly or indirect related to the

tourism industry. And since low-paid workers tend to spend all additional income on necessities

like food and clothing, this creates a multiplier effect that creates jobs. Further, the industry can

help local businesses to generate more revenue. According to a research done by Rebecca Torres

in 2003, most of the bigger hotels in Cancún have already had direct contracts with local farmers,

fisherman or ranchers as suppliers. However, direct contracts with private suppliers still

represent only 6% of total food supply. This has to do with the overall mistrust on both ­ supply

and demand sides as well as cultural differences concerning reliability (Torres, 2003).

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