Cancun and other resort cities in Mexico, once favored as honeymoon destinations, are struggling with a decline in tourists. A triple whammy of a strong exchange rate, environmental issues, and worsening public security has hit the region.

According to the British media outlet Financial Times (FT) on the 11th (local time), the number of international passengers at Cancun International Airport decreased by 12% last month compared to the same period last year. From January to August of this year, the number of foreign visitors entering Mexico through the airport decreased by 1.9% compared to last year. In particular, the number of American visitors plummeted by 5.8%.

Major coastal cities in Mexico, including Cancun, have been famous tourist attractions. Tourism is a powerhouse in Mexico, generating 8% of the country’s gross domestic product (GDP). However, the sudden drop in visitors is expected to take a toll not only on the tourism industry but also on the Mexican economy as a whole.

The FT explained that Mexico's economic growth rate remained at 0.6% last year and is projected to continue its low growth at 1.2% this year, adding, "This is putting pressure on the current government, which inherited Mexico's largest fiscal deficit since the 1980s."

The slump in the tourism economy is due to a triple negative factor hitting Mexico. First, the Mexican peso has risen 12% against the dollar over the past 18 months. As a result, travel costs in Mexico have become an even greater burden for foreign tourists.

Climate change is also a negative factor. As the sea temperature in the Gulf of Mexico rises, sargassum, a type of brown algae, has increased, spreading foul odors along the coastline and ruining the scenery of sandy beaches and the sea.

Public security is also cited as an obstacle hindering the recovery of the tourism industry. This is due to the influx of cartel organizations targeting wealthy visitors enjoying festivals and parties.

The FT forecasted, "While the U.S. Federal Reserve's implementation of interest rate hikes shows signs of turning the peso's value weaker, it will not be easy to win back the tourists who have already sharply declined."

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