There are signs of a recovery for the next winter tourist season, although the proposed tax reform will affect the growth of the sector
At five years since the economic and financial crisis of the United States, which seriously affected the flow of U.S. tourists to Puerto Vallarta and the country in general, the tourism industry in this beach destination is beginning to see signs of a recovery, which could be a reality in the first half of 2014.
The crisis in the U.S., documented from the second half of 2008, negatively impacted the country's tourist destinations, but in the case of Puerto Vallarta, it was strongly hit since the winter season (December 2008 to May 2009) , by causing the loss of about 465 thousand passengers by air.
To this figure was added the loss of 170 thousand domestic visitors who stopped coming to the destination due to the negative effects of the flu outbreak in Mexico in 2009 and, in general, the loss of economic power of Mexicans during that year.
Since 2009, the flow of American tourists continued to fall, down to the loss of about 870 thousand passengers in the 2008 to 2012 period. In contrast, domestic tourism began to grow from 2010 until recovering and representing for Puerto Vallarta a "lifeline" for the past four years, including this 2013.
But today, that finally the Puerto Vallarta tourism industry-and the country in general, is beginning to see a light of recovery at the end of this year, the federal government is considering in its tax reform project a tax levy in some areas of tourism, which could affect the growth of the tourism sector and even stop the rise that is just beginning to take hold.
The tax package is proposing to tax levy conferences, conventions and land passenger transport, which until now have remained with a zero rate, while eliminating the deductibility of consumption in restaurants, among other things that would end up hurting the "industry without chimneys" that sees in the upcoming winter season a light of economic improvement.
Interviewed on the subject, the hotelier Ignacio Cadena Beraud, owner of the hotel Friendly Hola Vallarta and of the restaurant La Leche, warns that without incentives, the tourism industry of this city and the rest of the country runs the risk of remaining contracted.
The also president of the Association of Hotels and Motels in Puerto Vallarta found that, indeed, there are indications that the tourism and economic recovery of the industry are nearby.
THESE YEARS HAVE BEEN VERY DIFFICULT IN TOURISM
In the last 10 years, which one has been the best for the tourism industry?
I think that the great increase in tourism in Mexico was in between 2006 and 2007, just when we got to very high levels because the U.S. market was very strong, and it began to add to the Canadian market on a more regular basis.
How has the crisis that started in the U.S. in the second half of 2008 affected the tourism industry?
The whole country was greatly affected, the U.S. crisis was an immediate reflection, the Americans behave massively with these crises and pay a lot of attention to the instructions of their authorities. For Puerto Vallarta it was much stronger than for the rest of the destinations in the country, maybe Mazatlan and Acapulco suffered a lot not so much because of the crisis, but because of a devaluation of their product. Puerto Vallarta suffered a lot with a reduction of almost 900 thousand passengers by air.
How could this strong fall in tourism be qualified?
It was emphatic, dramatic, drastic, awful, it was a 33 percent drop in U.S. tourism in a single stroke.
In how much averaged the applied tariffs to U.S. tourism before the crisis of 2008 and how much is the current rate average?
That is very difficult to answer because the tariffs do not have a fixed rate, because the phenomenon that has arisen is that the pressure of the rates pushes down starting from the most luxurious hotels: gran turismo and five stars... this is because the first tourists that began to fail were the middle and upper level ones, then, when the volume of customers who went to the big hotels reduced, especially for the international chains, these reacted by lowering their prices and lower prices are always pressed down, if the five-star hotel has lower prices, it lowers the four stars, the three and so on, this is a way to not lose tourism and it is one of the great misfortunes in the rates of Puerto Vallarta.
How much did the tariffs fall in Puerto Vallarta?
I estimate that they dropped by an average of 25 to 30 percent, which is very noticeable and hurts a lot the profits of a hotel, or it is also what prevents losses in a hotel.
What has happened to the national tourism over the last five years of the U.S. tourism crisis?
Fortunately, domestic tourism has increased sharply because there are more internal advertising campaigns, Mexican tourism has educated itself more, globalization is not only a matter of communication, but also a cultural issue, we must notice that the children of the middle and low class part of society has already gone to school, to universities and already use the computer and has realized that there is a thing called vacation which is an integral part of a living system, then there is an internal pressure on families to take them, so that Mexican tourism has increased significantly and regarding the loss of foreign tourism, in terms of people, Puerto Vallarta has not entirely been lost.
NEARBY, BUT ...
+ Is there evidence of a recovery in the U.S. market?
Yes, very marked. I think that the economic and political situation of the U.S. has not improved 100 percent, however I do notice signs of recovery in tourism, there is more confidence in the people, there is a better attitude toward Mexico, people continue with their wishes of vacationing, it is because for Americans and Canadians vacationing is not a luxury, but a lifestyle.
Is it possible that the upcoming winter season (December to May) will be the start of a full recovery in the tourism industry in Puerto Vallarta?
Yes. Next winter we could hope to recover at least 40 percent of our losses, which seems to me like a very important figure.
Once the outlook for the tourism industry in Puerto Vallarta finally clarifies, what opinion do the tax reform proposals of the federal government in tourism deserve?, Where it is proposed to eliminate the zero VAT rate of to conferences and conventions, land passenger transport and eliminate the deductibility of consumption in restaurants ...
That is a very sensitive issue of great concern to hoteliers and the tourism sector in general. For me the worst are not only these measures, these proposed changes in the law of federal government revenue, because they are debatable, you can amend and improve, you can make some not go through, that not all go trough or are changed, it's all about how to handle it...
So what is the main concern?
What concerns me -and is really dangerous- is the federal government's attitude towards tourism, on the one hand we are being told seven months ago (when the President Enrique Pena Nieto came) that tourism is first, that the support to tourism will be given, which will strengthen all destinations that are already established and that new developments are not going to open because the supply is already saturated, etc.... but it turns out that we suddenly find that not only these changes are made to the law of income with this new proposal presented by the Executive, but that there are some indications that it is so true that tourism is created.
Does tourism in Mexico deserve more attention?
I think so, tourism is much more viable, even than the energy reform, it is easier to offer support and make laws for tourism to grow more than oil; in addition, tourism is a matter that starts working immediately because the supply and service structure in Mexico is already established and well established.
Ignacio Cadena Beraud estimated that before levying with taxes some activities that have to do with the tourism industry, it is necessary that the federal government provides more tax incentives to improve facilities, access credits, mortgage facilities to modernize hotels.
"Actually there are few amenities for those who want to upgrade their facilities or create another set of services with new investments, then I wonder if there is within the federal government's strategy a formula to improve conditions in the country, we must not forget that tourism is one of the most important engines for economic development ".
[readon1 url="http://vallartaopina.net/2013/09/29/el-turismo-la-mejor-opcion-para-el-desarrollo-economico-del-pais"]Source: Vallarta Opina Translated by Rene Tripp[/readon1]
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