Extended travel restrictions to and from Mexico could have lasting impact

Alongside being the most important source market for Mexico, US travellers are the highest spending. Credit: Brester Irina / Shutterstock.

Almost 18 months since the onset of Covid-19, the prolonged lack of travel from the top two source markets for Mexico will have harmful impacts on its tourism industry. As Covid-19 infections in Mexico rise again, last-minute changes to restrictions will discourage further trips and could limit future bookings.

New restrictions imposed could give a negative signal to travellers

Recently, the UK placed Mexico on its ‘red list’, meaning that only residents can enter the UK and if so, they must complete a mandatory ten-day hotel quarantine on arrival, costing £1,750 ($2,422). The cost of hotel quarantine is also set to rise as of 12th August 2021, where a single adult must pay £2,285 ($3,155), an increase of 30.6%. In itself, this is enough to discourage travel at present and could deter future bookings.

As a long-haul destination for UK travellers, pandemic savers could be looking to make their next ‘bucket list’ escape, following months of lockdown restrictions. According to a Verdict community survey*, 37% of respondents are willing to travel long-haul in the next 12 months, where ‘pandemic savers’ may be willing to spend more than they were pre-pandemic. However, spending on a high-value holiday to a destination that has just been placed onto the ‘Red list’ is less than encouraging and other, safer destinations may be chosen. This is a concern for the Mexican tourism industry, as high-budget post-Covid-19 holidays, as well as long-haul holidays, provide a great income source for the country.

Mexico will miss high-spending American travellers

Alongside being the most important source market for Mexico, US travellers are the highest spending. According to GlobalData, 83% of arrivals in Mexico in 2020 were from the US. GlobalData found that the average spend on international trips globally per US resident was $3,505.4 in 2020. This is much higher than any other country and much higher than most other important source markets to Mexico. The tourism industry will feel the gap of the missing US traveller as land borders are closed until at least 21st August 2021. This, however, is likely to be extended as the Covid-19 situation worsens in Mexico, deepening the impact.

A rush of travel in Mexico is expected as borders open in the US

A main motivator for travel from the US to Mexico is VFR trips, where friends and family have not been able to reunite since the pandemic began. This pent-up demand will cause a rush of travel to Mexico and with limited capacity at many hotels and airlines running reduced capacity, there could be a lack of travel options. This could cause a hike in airfares and room rates as demand increases, where the desire to see loved ones will encourage uptake of these higher fares.

This could give some relief for Mexico tourism. However, it will nowhere near compensate for the lost time and income due to border closures. The longer borders are closed, the greater the impact will be and the more the Mexican tourism industry will suffer.

*Verdict community survey live since 17th November 2020 with 1,442 respondents.

** Verdict community survey live since 19th May 2021 with 167 respondents.

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