RENEE MONTAGNE, host:
When foreign tourists fled Mexico during the height of the swine flu crisis, the country took a big economic hit. Mexico is heavily dependent on revenue from foreigners, and now its tourism minister says the number of international visitors could drop to almost zero. NPR's Jason Beaubien has this report.
JASON BEAUBIEN: Mexico has a diverse tourism trade, from jungle tours in Chiapas to the museums and pyramids of Mexico City, to the Copper Canyon Railroad in Chihuahua. But the biggest tourist destination is Cancun.
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BEAUBIEN: The hotels of Cancun are squeezed shoulder to shoulder along a stretch of soft, white-sand beach. The rooms look out over the pristine, blue waters of the Caribbean. But right now, most of those rooms are empty. Cruise ships have diverted to ports outside Mexico, and airlines have been canceling flights.
Ms. VICKY LONG: Our flight here, there was 11 people on the flight. Eleven.
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BEAUBIEN: Vicky Long and John Papadakous, from Baltimore, tried not to come, too, but their travel insurance policy didn't cover flu outbreaks.
Mr. JOHN PAPADAKOUS: And we called up to cancel, and they said you couldn't cancel for that reason. So, we were like, all right. Well, let's go see what happens.
BEAUBIEN: Standing across the street from the Hard Rock Cafe, they say they've been having a great time. Their hotel is pampering them, the beaches are wide open. While the big nightclubs have been shut, the bars have still been serving drinks.
Mr. PAPADAKOUS: But at our hotel, they cater us. Like, it's awesome not having that many people there, really. So it doesn't bother us.
BEAUBIEN: But the huge drop in tourists is a huge problem, not just for Cancun but for all of Mexico. Tourism is the country's third-largest source of revenue, after oil exports and remittances from Mexicans working abroad. But petroleum and remittances both declined last year. In 2008, the bright spot in the Mexican economy was tourism, which posted a 3.5 percent growth in revenue.
Even as the army was fighting a bloody war against the nation's drug cartels, the number of foreign visitors to Mexico grew in 2008 to a new record. But then came swine flu.
Ms. SARA LATIFE RUIZ CHAVEZ (Secretary for Tourism, Quintana Roo, Mexico): (Spanish spoken)
BEAUBIEN: Sara Latife Ruiz Chavez is the secretary for tourism for the state of Quintana Roo, which includes Cancun and the beaches known as the Mayan Riviera. She says over the last two weeks, the number of international tourists arriving in Cancun has dropped 82 percent below normal. And the number of national tourists arriving from other parts of Mexico is down 40 percent. She says swine flu is costing the area millions of dollars in lost revenue.
Ms. RUIZ CHAVEZ: (Spanish spoken)
BEAUBIEN: Twenty-two hotels have temporarily suspended their operations, she says. They're sending the few customers they do have to other, higher-quality resorts.
Cancun was conceived by the Mexican government in the 1970s as a planned, international beach resort on what was then the desolate strip of the Yucatan Peninsula. The place has been booming ever since, fueled by an apparently insatiable appetite for hotels, condos and timeshares on the Caribbean.
Ms. RUIZ CHAVEZ: (Spanish spoken)
BEAUBIEN: Ruiz Chavez says 100 percent of the economic engine of this state is tourism, and just in the first weeks of the swine flu crisis, more than 10,000 waiters, cooks, maids and other hotel employees in Cancun have been furloughed from their jobs. Dive boat owners say they're going out with just two or three customers. Jungle tour boats sit tied up at the docks. Parasail operators kick around soccer balls on the empty beaches.
In 2005, Cancun was battered by Hurricane Wilma, which caused billions of dollars in damage. But Rodrigo de la Pena, the head of the Cancun Hotel Association, says the current situation is worse than a hurricane. During the storm, people are busy, he says, and hotels have insurance to cover repairs and payroll.
Mr. RODRIGO DE LA PENA (Cancun Hotel Association): Right now, we don't have insurance. We don't have construction going on. We don't have things that the labor hand are doing right now. They're just waiting for people to come. And when we have hurricanes, everybody's working, everybody is building, everybody's cleaning. And right now, it's pretty different.
BEAUBIEN: Back in April, before the H1N1 virus burst into the headlines, about 75 percent of Cancun's hotel rooms were occupied. This week, the occupancy rate is running at about 20 percent. And the same way that people stayed away from pork, despite assurances that it was safe, tourism officials in Mexico worry that the country's image, its brand, has been tarnished by swine flu. And they worry that even after any potential health threat is gone, people will stay away from Mexico.
The country's tourism minister estimates that nationwide, much-needed revenue from tourists could fall by 43 percent this year as a result of the outbreak.
Jason Beaubien, NPR News, Cancun.
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