Effects of Tourism on Mexico, Colombia, and Costa Rica

Introduction: Tourism in Latin America

Most Latin American countries are dependent on tourism dollars to fuel their economies. Latin America encompasses a very large demographic area that includes all of Central and South America. It hosts some of the most beautiful and scenic countries in the world, and each one offers a unique travel destination in its own right. This paper focuses on the effects of tourism in three of the top travel locations in Latin America: Mexico, Colombia, and Costa Rica.

Mexico's Tourism Industry

In developing its tourist industry, the Mexican government had three main goals: earning foreign exchange, creating employment, and diverting internal migration toward tourism zones. Statistics on employment and in-migration to Mazatlán, Puerto Vallarta, Cancún, and Los Cabos show that it has been relatively successful in achieving these goals. However, Mexico has increased its dependency on loans, foreign capital, and foreign patronage, and has imposed costs on the working class employed in low-waged and precarious tourist jobs, including de facto social and economic segregation (Wilson).

In 1954, Mexico received more than half a million tourists, and that figure had doubled by 1963, when the first national tourism plan was developed. In 1974, Mexico hosted 3 million tourists, and that same year the Department of Tourism was founded together with the National Tourism Promotion Fund (FONATUR). The year 1975 saw the launching of Cancún, the first Master Plan Tourist Resort built by FONATUR, which is now one of the most famous vacation resorts in the world ("1995–2000 Tourism-Sector...").

Mexico's tourism officials reported a three percent increase in visitors in 2008, who spent an estimated four percent more than in the previous year. The Tourism Department noted that more than 18 million tourists — approximately 80 percent from the United States — visited Mexico between January and October 2008, with over 21 million expected for the full year, spending about $16.5 billion (Press, The Associated).

Unlike other tourist destinations around the world that saw a drop in tourism in 2008, there was no sign that Mexico's tourism industry would not continue to grow. In fact, Mexico's tourism numbers showed great promise early in 2009, with two million international tourists arriving in January alone — a 14.3% increase compared to the same period the previous year. Tourism brought in $1.192 billion in revenue, according to Mexico's Secretary of Tourism Rodolfo Elizondo Torres ("Mexico's Tourism Increases...").

Mexico's border tourism generated $58 million in revenue, an increase of 18.7%, and hotels received 4.6 million tourists, an increase of 5.4% compared to January 2008. Elizondo stressed that tourism in Mexico would continue to be a pillar of the nation's economy and its leading generator of jobs. In January, 2.1 million tourism jobs were registered according to the Mexican Institute of Social Security ("Mexico's Tourism Increases...").

From an industrial standpoint, Mexico is one of the most developed countries in Latin America; its industry is based on mechanical, electronic, textile, food, tourism, iron and steel, chemical, and petrochemical sectors ("Mexico"). Mexico has rapidly developed its tourist sector in recent years, and tourism is now the fourth largest source of currency income for the country. The resorts of the Caribbean coast of the Yucatán Peninsula — especially Cancún, Playa del Carmen, and Cozumel — have grown very quickly. The Pacific coast destinations of Puerto Vallarta, Huatulco, and Los Cabos have also increased in popularity ("North & Central America...").

Mexico relied on its weakened currency relative to the dollar and its proximity to the United States to attract recession-affected Americans and fuel its tourism industry — a major source of foreign income (Press, The Associated). Mexico also developed a new worldwide marketing strategy, counting on tourism to drive the country through the global economic crisis with more aggressive online advertising campaigns and increased travel promotion in markets such as China, Russia, and India, where the number of people with disposable income was rapidly growing. The country was also building new resorts, including a $7.5 billion resort in Sinaloa, to extend its tourist zones (Press, The Associated).

Mexico's 32 states are truly diverse, with each offering countless tourist destinations and a wide array of activities. The country's land area extends 1,964,375 square kilometers, divided into distinct tourist regions. The most popular is the Yucatán Peninsula region — the gateway to the Mayan world. Chichén Itzá, the Mayan temple city, was recently designated one of the New Seven Wonders of the World. The region also offers white-sand beach resorts and the blue waters of the Caribbean Sea, where visitors can scuba dive along the world's second largest coral reef ("About Mexico").

The Baja Peninsula region offers world-class golf courses, the underwater treasures of the Sea of Cortez, and the opportunity to witness the remarkable migration of gray whales. Central Mexico is considered the Mexican heartland, featuring natural surroundings, picturesque towns full of life and color, and beautiful colonial cities, some of which have been declared World Heritage sites ("About Mexico").

With endless beaches, countless resorts, colonial mountain towns, ancient ruins, and thriving cities filled with restaurants and museums, the industry directly employs approximately 2.25 million people and indirectly supports another four million (Press, The Associated). Tourism is big business in Mexico, with restaurants, hotels, all-inclusive resorts, travel tour companies, cruise ship operations, excursion companies, taxi drivers, tourist shops, and local markets all requiring Mexican workers.

Colombia's Tourism Industry

"The government has become very engaged in developing the country's tourism industry. In 2006, Colombia dedicated a significant budget in US dollars to promote the country abroad through the campaign 'Colombia es Pasión' (Colombia is Passion) and to promote investment in this sector, among others. As a result of these efforts, domestic tourism showed strong growth, and the number of visitors to Colombia increased markedly" ("Tourism Industry in Colombia").

For the decades leading up to the 1990s, tourism — normally a vital component of the service sector, particularly for a country as diverse culturally, geographically, and historically as Colombia — did not contribute significantly to economic growth ("Colombia Tourism"). The cost of Colombia's poor international image was reflected in the statistics: in 1978, more than 826,000 tourists contributed US$328.5 million to Colombia's foreign exchange earnings. By 1984, tourist arrivals had dropped to about 715,000 and generated only US$231 million in foreign exchange. The prospects for expanded tourist receipts, despite enormous potential, were dismal given the social conditions prevailing in the late 1980s. Analysts did not expect violence to subside, and as a result they did not believe tourism would recover significantly; the government did not actively pursue it ("Colombia Tourism").

Persistent reports of kidnappings, assassinations, drug-related violence, and guerrilla activities diminished tourist interest in Colombia during the 1980s, even though foreigners were generally not the targets of that violence. Overall indicators of general security have since been reduced significantly, and Colombia now ranks below recognized cities such as Washington, D.C., São Paulo, and Atlanta, and tourism destinations such as Rio de Janeiro in terms of violence. Today, tourism in Colombia is a vital economic component the country could not do without ("Tourism Industry in Colombia").

Colombia, in its historically new phase of growth, has been presenting its real image to the world, with a growth rate that exceeds the six percent average seen in other international tourism industries over the same period. In 2007, over two million travelers visited the country — a 13.5% increase compared to 2006, equivalent to 263,374 additional visitors. This represented the fifth consecutive year of growth between 2002 and 2007. Colombia aims to rank fifth among the top tourism destinations in Latin America for 2010, after Mexico, Brazil, Argentina, and Costa Rica ("Tourism Industry in Colombia").

One of the main drivers of Colombia's recent tourism growth is the government's provision of tax incentives to the tourism industry. Hotel services provided in new hotels built between 2003 and 2018, or in hotels expanded or remodeled during that same period, are eligible for income tax exemptions until 2032 ("Tourism Industry in Colombia").

Colombia is becoming one of the most important tourism destinations in Latin America. According to the World Travel & Tourism Council (WTTC), real demand for travel and tourism in Colombia was expected to increase from US$10,753 million to US$15,383 million during 2009–2018 — a real growth rate of four percent per year. The tourism sector currently accounts for 1.9% of total GDP in Colombia (US$3,524 million) and generates 386,000 direct jobs, equivalent to 1.8% of total employment in the country ("Tourism Industry in Colombia").

With 3,208 km of coastline (1,760 km on the Caribbean Sea and 1,448 km on the Pacific Ocean), 400 km of Amazon forest, and Andean mountain ranges, Colombia offers a vast array of possible tourist destinations. The country's privileged location means all environments of the tropics are present: glaciers, beaches, plains, rainforests, and deserts, all adding to its desirability ("Where to go?").

Colombia has countless tourist destinations offering a wide array of activities. Even the most seasoned traveler can't help but be swept up by the magic of Cartagena, steeped in history and known for its warm people. The old city is a warren of cobblestone streets meandering between pastel-painted mansions. Ciudad Perdida — the "Lost City" — is Colombia's answer to Machu Picchu. Built by the Tayrona Indians 900 years ago and abandoned after the Spanish conquest, it was only rediscovered in 1975, having been concealed for centuries by impenetrable jungle ("Where to go in Colombia").

The renewal of cruise ship visits to Colombia has been among the most important developments in the tourism industry. In 2007, a total of 99 cruise ships docked in Colombia carrying 126,817 passengers — equivalent to growth of 151.1% compared to the previous year ("Tourism Industry in Colombia"). Royal Caribbean, the world's second-largest cruise line, arrived in Cartagena in April 2007 after a six-year absence. It was the first of 36 ships scheduled by the line for the 2007–2008 season. According to estimates, this first ship generated income of $385,000, and income was expected to be three times higher that season than in 2005–2006 ("Tourism Industry in Colombia").

Conclusion: Economic Dependence and the Future of Latin American Tourism

In 2008, 15,000 new jobs were created in Costa Rica's tourism sector during the first six months of the year alone. The industry now employs 500,000 Costa Ricans — about 17% of the population — with approximately 110,000 directly employed in tourism and another 400,000 indirectly supported by the industry. These numbers have grown steadily since 1955, and the tourism industry today looks very different from what it was 50 years ago.

Unfortunately, many of the hotels currently under construction are being built with only short-term profit in mind, without considering the effect such development will have on local ecosystems. Some analysts believe it is unwise for any local economy to place too much emphasis on tourism. Instability in the region, a major natural disaster, civil disturbances, hyperinflation, or even shifting tourist preferences could depress tourism and send the economy into a tailspin (Staff). Across Mexico, Colombia, and Costa Rica, the central challenge going forward will be to harness the substantial economic benefits of tourism while managing the social, environmental, and structural vulnerabilities that come with dependence on it.