Mexico’s Tourism Secretary, Claudia Ruiz Massieu, shared with KITE Invest the great advancements Mexico’s tourism sector has experienced over the last two years, emerging from over a decade of slow growth. Secretary Ruiz also discussed how the Mexico-UK Dual Year has already fomented the British visitors arrival to Mexico.
KITE Invest: Please share some view points on the strategic opportunities Mexico can offer British investors, particularly in terms of tourism.
Secretary Claudia Ruiz Massieu: Mexico is the gateway to the world’s most important market. The economic bloc represented by the North American Free Trade Agreement represents 19.9 billion dollars, and in addition, through an extensive network of trade agreements, Mexico has preferential access to 45 countries or 1.14 billion people, which is 17.7 times the UK population and 2.2 times the total population of the European Union.
Mexico is a magnet for investment; it is estimated that at the end of 2014 foreign direct investment exceeded 22 billion dollars and is expected to rise in 2015 to nearly thirty billion dollars. In addition to this, our country is one of the thirteen most attractive countries for investment, according to UNCTAD’s 2014 World Investment Report. Moreover, according to the FDI Confidence Index 2014 by AT Kearney, Mexico ranks 12th of the 25 most attractive to investors worldwide, exceeding Chile, Spain, Japan, Malaysia, South Africa, and others.
The series of structural reforms the country has undertaken in recent years, especially in the energy sector and telecommunications, has positioned the country as one of the markets with the greatest potential for attracting capital. These measures involve the transfer of technology and great efficiency in the processes for improving productivity, which coupled with the economic recovery of our main trading partners creates a favourable investment environment, as it has already begun to observed in the automotive, energy, and infrastructure sectors.
New investments mean new jobs and increased demand for services. We have already heard from hotel chains that they are investing heavily into different parts of the country to meet the demands that will be created, for example, by the expansion of the oil industry that will bring in thousands of national and foreign workers.
The tourism sector in Mexico has experienced historic and unprecedented growth in the past two years. In 2014, the arrival of 29.1 million international tourists was recorded, 20.5% higher than 2013. This represents a historic high of five million additional tourists in just one year, and thanks to that Mexico was positioned again in the top 10 of the World Tourism Organization (UNWTO) ranking.
This year, the trend of an increasing number of tourists continued over the first four months of 2015. The number of international tourists to Mexico totalled 10.5 million, representing an increase of 10.8% over the same period last year. All these circumstances make the tourism sector, and all economic sectors involved in the value chain, an excellent investment opportunity.
KITE: In your estimation how is Mexico’s international image perceived by the British society and how does this perception affect areas such as business, investment, and tourism?
Secretary Ruiz: Tourism, as well as a strategic sector for the country, is a great example for conveying to the world the considerable efforts the country has undertaken to build a Mexico that is modern, democratic, evolving, and has great potential for development. The country is experiencing a period of structural change that is causing an impact on investment, business, and tourism.
These changes have fostered a greater confidence held by foreigners. In 2014, the arrival of visitors from the United Kingdom – our main market in Europe – increased by 10.8% from 2013 records; increasing from 414,039 visitors to 458,932 visitors. This year is seeing the trend continue, as the first four months of 2015 registered an increase of 15% of UK visitors compared to the previous year, increasing from 119,200 to 137,184 visitors received. The UK’s presence in Mexico consolidated as well, becoming Mexico’s top European tourist market and the third largest tourist market worldwide.
To this point, it can be stated that the British perceive Mexico as an attractive destination for vacation to enjoy the culture, cuisine, and the natural beauty Mexico has to offer.
It is also important to highlight the strategies that have been implemented for the promotion of Mexico, as they have been fundamental to the country’s change in image and have helped to increase tourism. The world is looking to Mexico and it sees a country that is real, sophisticated, diverse, and modern with a large range of products and experiences to offer. The campaign “Mexico Live it to Believe it” includes additional adventure tourism and cultural tourism destination, besides the sun and beach destinations that Mexico is best recognized for.
In addition, as a sign of the importance and cooperation between Mexico and the UK, both government’s respective Foreign Affairs Ministers on June 11, 2014 signed a joint statement declaring 2015 as the celebration of the “Year of Mexico in the UK” and the “Year of the UK in Mexico,” in order to promote a better understanding between our societies.
As part of the celebrations a series of crosscutting multi-sector events have been taking place outside the country, called “Meet Mexico.” These events not only highlight the tourist and cultural attractions, but also through an interactive pavilion with state-of-the-art technology a comprehensive experience of Mexico including its economy and major export industries is being presented. In London, England the event took place from February 25 to March 11, 2015 with record-high attendee levels totalling 39,562 (112% higher attendee numbers in Beijing and 65% higher than Madrid).
KITE: What are some of the factors that have led to the record number of tourist arrivals to Mexico and what are the proposals that differentiate?
Secretary Ruiz: Mexico is a country that offers great touristic appeal, based on our rich natural and cultural diversity. For instance, to name just a few examples, Mexico has two of the most visited archaeological sites in the world, Teotihuacán and Chichén Itzá, Mexico is the sixth country with the most world heritage sites, and has more kilometres of coastline that France, Italy and Spain combined.
Despite being a wonderful place to visit, tourism in Mexico experienced a period of stagnation. From 2000 to 2012 international tourist arrivals increased by only 2.76 million, while Turkey increased by 26.1 million, Hong Kong 15 million, Spain 11.1 million, and Saudi Arabia 7.7 million.
On average international tourism in the world grew significantly more than it did in Mexico during this period, largely because Mexico compared to other countries was losing due to what it had to offer in terms of competitiveness and innovation. This Administration set as a priority to reverse this situation by taking on a series of measures such as increasing tourism facilities, improving competitiveness, and innovating and diversifying tourism.
In 2014, Mexico had historical record-breaking growth of international tourist arrivals, receiving 29.1 million people. If we analyse the segments where we had the biggest increases we see the effectiveness of the measures we have implemented:
During 2014 we received 13.1 million tourists from border countries, 37% more than in 2013. This growth is accountable to the specialized promotional campaigns that targeted this segment, specifically the advancement of the “Trusted Traveller” program, which simplified admission requirements at the borders. Job facilitating improved for the admission of unaccompanied minors as well as other actions contributed to the increase.
Moreover, we have also seen significant growth from our main market, the United States. From 2012 to 2014 we recorded an increase of 20.6% or an additional 1.3 million tourists from the United States arriving by air, reaching a total of 7.2 million Americans who chose our country from other destinations worldwide. In fact, from 2013 to 2014 the market share of US tourists coming to Mexico increased from 33.7% to 37.2%.
Another example is with the case of Colombia, in which our country abolished the visa requirement for Colombian nationals and managed in just two years to increase arrivals by more than 100%, from 154,000 Colombians visitors to 328,000 visitors.
It is also noteworthy to mention that Mexico increased it level of competitiveness. The World Economic Forum’s Travel and Tourism Competitiveness Report ranked us 30 out of 141 countries, Mexico’s best position since the report was published, improving by 14 spots from the year prior and representing our best advancement in the history of the report.
KITE: An increase of 16.7% in foreign currency means better quality tourism. To this regard has there been a shift of focus by policy programs and new strategies that have led to this increase?
Secretary Ruiz: In tourism, the infrastructure of communications, water services, electricity, gas, drainage, transport, housing, hotel and restaurant, entertainment, beaches are essential for the development of the activity.
In that sense we have changed the focus to incorporate a special emphasis on the crosscutting and coordinated work through the Tourist Cabinet, the various departments and agencies of the federal, state, and municipal governments, and the private sector. This not only ensures investment in new infrastructure and maintenance of existing infrastructure, but also innovates and diversifies the product, and increases the competitiveness of destinations. All of which are indispensable conditions for the growth of tourism.
During 2014, under the framework National Infrastructure Program, it was a privilege to have joint work and investment in projects with high tourist impact to rehabilitate the cultural heritage, such as the historical centres of the main colonial cities, the existing urban and natural infrastructures, as well as allocate resources for creating new attractions in 44 of our priority destinations and 83 “Magic Towns.”
The findings of the Travel and Tourism Competitiveness Report, I mentioned previously, are an example of the transformation that took place. In the report we can see that in terms of price there was no significant change; however, we improved our competitiveness in terms of connectivity and in terms of our cultural, natural, and business resources. As a result we can encourage tourists to stay longer, because the quality and diversity that Mexico offers is above other factors. In fact, the average spending by tourists arriving by air increased 9.3% in 2014 compared to 2013; we saw that tourists began to spend more as they recognized the increase in the quality of what we offer.
KITE: Why will 2015 be a crucial year for Mexico and the United Kingdom, referring specifically to the Dual Year?
Secretary Ruiz: The Dual Year includes an ambitious agenda in both countries, including activities in different fields such as art, education, science, innovation, technical and scientific cooperation, economic development, investment, trade and tourism, and gastronomy.
It’s a great opportunity to increase investment, promote the cultural exchange and connectivity between the two countries. The National Fund for Tourism Development (FONATUR – Spanish acronym) for example has had meetings with important groups like Proprium Capital, The Dorchester Group, Fairmont Raflles, and others, presenting them with investment opportunities that are currently available within the Fund.
FONATUR is interested in strengthening the participation of UK investment groups, investment funds, and developers in Mexico; therefore, it is offering great investment portfolios in destinations that are not consolidated like Loreto, Huatulco, and Playa Espíritu.
Moreover, a traveling pavilion “Meet Mexico” was installed in the Potter’s Field Park in London, which covers the entire value chain, starting with the position of Mexico’s competitive advantages in different areas and concluding with tangible options, generating an integrated experience.
The strategic promotion of Mexico has also continued through the country’s participation in The World’s 50 Best Restaurants and Latin America’s 50 Best Restaurants.
In matters of connectivity, an interest in cooperation between Interjet and British Airways has been established to increase connectivity between the two countries. Both parties intend to form a strategic alliance to provide a comprehensive service to its users, mainly in the Mexican and British markets, and negotiate a special prorate agreement.
In the tourism sector we can already see the benefits of the Dual Year, from January to April 2015 there was a 15% increase of UK visitors who came to our country compared to the same period last year. We are expecting this positive trend to continue through the remainder of 2015.