Thesis: Effect of Tourism on Latin America Specifically Colombia Mexico and Costa Rica

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Tourism

The Effects of Tourism on Latin America Countries

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

Mexico's Tourist Industry

In developing its tourist industry, the Mexican government had three main goals: earning foreign exchange, creating employment, and diverting internal migration toward tourism. Statistics on employment and in-migration to Mazatlan, Puerto Vallarta, Cancun, 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).

History of Mexico's Tourism

In 1954 Mexico received more than half a million tourists, and the figure had doubled by 1963, when the first national tourism plan was developed.

In 1974 Mexico was host to 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 Cancun, 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 Growth in Recent Years

Mexico's Tourism officials stated they saw an increase of three percent more visitors in

2008 and they spent an estimated four percent more than the previous year. The Tourism Department also said more than 18 million tourists, about 80% from the U.S., visited Mexico between January and October 2008 with over 21 million expected for the year, and will spend about $16.5 billion (Press, The Associated).

Unlike other tourist destinations around the world that have seen a drop in tourism in 2008, there is no sign that Mexico's tourism industry won't increase again for 2009. In fact Mexico's tourism numbers have already shown great promise with an increase during the first month of 2009, with two million international tourists arriving in Mexico, a 14.3% increase compared to the same time last year. Tourism brought in $1.192 billion dollars in revenue, said Mexico's Secretary of Tourism Rodolfo Elizondo Torres (Mexico's Tourism Increases…).

Mexico's border tourism received $58 million dollars in revenue, an increase of 18.7%, and hotels received 4.6 million tourists, an increase of 5.4%, in comparison to January 2008

Elizondo stressed that tourism in Mexico will continue to be a pillar to the nation's economy and the lead generator of jobs. In January, 2.1 million tourism jobs were registered according to the Mexican Institute of Social Security (Mexico's Tourism Increases…).

Tourism Industry Ranks Fourth Overall in Mexico's Economy

From an industrial point-of-view, 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. Tourism is now the fourth largest source of currency income for Mexico. The resorts of the Caribbean coast of the Yucatan Peninsula (especially Cancun, Playa del Carmen and Cozumel) have grown very quickly over the last few years. The Pacific coast (Puerto Vallarta, Huatulco, Los Cabos) have also increased in popularity in recent years (North & Central America…).

Effects of the Global Economic Crisis on Mexico's Tourism

Mexico is depending on its weakened currency against the dollar and its proximity to the U.S. To attract recession-shocked Americans and fuel its tourism industry -- a major source of foreign income (Press, The Associated).

Mexico is also developing a new worldwide marketing strategy. It is counting on tourism to drive the country through the global economic crisis, with more aggressive ad campaigns on the Internet and increased travel promotion in places like China, Russia, and India, where the number of people with disposable income is rapidly growing. They are also building new resorts, as in the $7.5 billion resort in Sinaloa (located in the northern zone of Mexico's coast, on the Pacific Ocean) to help extend the tourist areas (Press, The Associated).

The Composition of Tourism in Mexico

Mexico's 32 states are truly diverse, as each one has countless tourist destinations offering a wide array of activities.

Mexico's land area extends 1,964,375 sq km, which is divided into different tourist regions. With the most popular being the Yucatan Peninsula region. The gateway to the Mayan world, Chichen Itza Mayan temple city, was recently designated as one of the new Seven Wonders of the World.

Here you can also enjoy the white-sand beach resorts and the blue waters of the Caribbean Sea, where you can scuba dive along the world's second largest coral reef (About Mexico).

The Baja Peninsula region offers world-class golf courses. You can discover the underwater treasures of the Sea of Cortez, and witness the amazing migration of the Gray Whales.

Central Mexico region is considered the Mexican heartland. Here you'll find plenty of natural surroundings, picturesque towns full of life and color, and beautiful colonial cities, some of which have been declared World Heritage sites (About Mexico).

Effects of Tourism Industry on Mexican Employment

With endless beaches, countless resorts, quaint colonial mountain towns, ruins, and booming cities filled with restaurants and museums, the industry employs some 2.25 million people directly and another four million indirectly (Press, The Associated).

Tourism is big business in Mexico with restaurants and hotels, all inclusive resorts, travel tour companies, cruise ships passengers, excursions companies, taxi drivers, tourist shops and local markets all requiring Mexican employment.

Colombia's Tourist Industry

"The government has become very engaged in developing the country's tourism industry. In 2006, Colombia provided a significant budget in U.S. dollars to promote the country abroad through the campaign "Colombia es Pasion" (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).

History of Colombia's Tourism

For decades ending in the 1990's, 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 image was made evident by statistics. In 1978 more than 826,000 tourists contributed U.S.$328.5 million to Colombia's foreign exchange earnings. By 1984 tourist arrivals had dropped to about 715,000 and had rendered only U.S.$231 million in foreign exchange. The prospects for expanded tourist receipts, despite enormous potential, were dismal under the social conditions prevailing in the late 1980s. Analysts did not expect violence to subside, and as a result they did not believe that tourism would recover significantly and the government did not actively pursue tourism (Colombia Tourism).

Safer Conditions Help Tourism

The persistent reports of kidnappings, assassinations, drug-related violence, and guerrilla activities diminished tourist interest in Colombia during the 1980's, even though foreigners generally were not the targets of this violence.

The overall indicators of general security levels has been reduced significantly in the last few years and ranks now underneath recognized cities such as Washington D.C., Sao Paulo, or Atlanta, and tourism destinations such as Rio de Janeiro. Now, tourism in Colombia is a vital component that the country couldn't live without (Tourism Industery in Colombia).

Colombia's Tourism Growth in Recent Years

Colombia, in its historical new phase of growth, is showing its real image with this increased growth rate, in the same time frame that other international tourism industries have only grown at a rate of six percent.

In 2007, over two million travelers visited the country. It reflected a 13.5% increase compared to the same time period in 2006 -- equivalent to 263,374 more visitors. This is the fifth consecutive year of growth between 2002 and 2007.

Colombia aims at being fifth in the top destinations in Latin America for 2010 (After Mexico, Brazil, Argentina and Costa Rica) (Tourism Industery in Colombia).

Tax Incentives for Tourism Projects

One of the main reasons why Colombia tourism has seen the recent growth is because the government is providing tax incentives to the tourism industry. Hotel services provided in new hotels built between 2003 and 2018, or ones that are expanded/remodeled in this same time period, will have income tax exemptions until 2032 (Tourism Industery in Colombia).

Tourism Industry Accounts for Almost Two Percent of GDP

Colombia is becoming one of the most important destinations for tourism in Latin America. According to the World Travel & Tourism Council (WTTC), real demand for trips and tourism in Colombia is expected to increase from U.S.$10,753 million to U.S.$15,383 million during 2009-2018 -- a real growth of four percent per year.… [END OF PREVIEW]

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