CIN Drydock Report

Mexico: Adapting to Market Forces

Despite being bowed by economic pressures and H1N1, the country’s cruise industry is hanging in there. Work has continued, with new piers being built in a few ports, the SCT said. Mexico is still reeling from the double whammy of the swine flu outbreak last year and the economic downturn, and the country’s tourism and port officials are still gauging the effects.

As 2009 wound down, Mexico’s officials were watching tourism numbers carefully. Last fall was going to mark  “the beginning of a very important season for the industry and the country,” said Alberto Morales, a deputy in Mexico’s Secretaría de Comunicaciones y Transportes (SCT – Ministry of Communications and Transportation), in October. “It will allow us to identify where we stand after two important events that have affected the way in which Mexico is related to the cruise industry: the H1N1 influenza outbreak and the global economic crisis.”

Cruise lines are telling Moreno “that the Mexican Riviera is taking more effort to sell than what it used to take in the past,” he said. “One reason could be that the market is demanding something different, such as going to more countries at a time on one trip.”

The economic crisis may be affecting this route in particular, Moreno said. “We will not know until probably in the first quarter.”

Despite being bowed by economic pressures and H1N1, the country’s cruise industry is hanging in there. Work has continued, with new piers being built in a few ports, the SCT said.

“In addition to infrastructure-maintenance programs in the country’s 26 cruise ports, the federal government has moved forward with construction on five new cruise piers: one in Guaymas, one in Mazatlán, two in Puerto Vallarta and the last in Manzanillo,” the SCT said in an e-mailed statement. “Regarding the latter, it is putting the final touches on the project so as to begin pier operations as soon as possible while they design the new terminal.”

Mexico is also optimistic about the good response to its newer ports, such as Puerto Chiapas, which has received 12 arrivals and is expecting eight more this year, according to the SCT said.

Both the tourism ministry and SCT oppose a passenger head tax such as the one that the Mexican legislature is debating this year. They do not want to make things even more difficult for the cruise industry.

“We do not need to discourage the cruise lines from arriving in Mexico. Our ports are already very expensive – among the most expensive in the world – and we do not need to make it even more expensive for them,” Moreno said. “So that was the main reason for us deciding not to support that initiative this year.”

Ports such as Ensenada, in Moreno’s home state, at one point relied very much on weekend visitors from the U.S. who would stay for a few days, spending money. But the economic downturn made Ensenada depend almost solely on cruise passenger consumption, Moreno said.

Mexico’s 2006–2012 cruise policy published by the tourism ministry is still in effect, Moreno said, though the distractions of the past year may have thrown them off a little. The special committees that have been meeting in each port are still brainstorming about how to differentiate ports and make each one more competitive.

“Today we see clearly that if we want to keep the ships coming, we need to be very creative and look into new products,” said Moreno. “Sometimes they’re offering the same shore excursions as they have for the past 15 years. We need to come up with something that will exceed the expectations of people arriving at any port in Mexico.”

Moreno said Mexico is working hard to differentiate its ports. Next year the country plans to capitalize on its centennial as a draw, when the Mexican Revolution celebrates its 100th birthday.

Excerpt from Cruise Industry News Quarterly Magazine: Winter 2009/2010

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