Covid-19 and Tourism in Mexico: Economic Impacts and Prospects

Abstract

Tourism is Mexico's largest source of foreign exchange, only surpassed by remittances and foreign direct investment, and is one of the most wealth-generating economic activities in the country. However, measures to mitigate the Covid-19 pandemic – such as the suspension of flights and strict restrictions on people's mobility – have caused great economic damage to the tourism industry, and with it, to large regions in the country. This chapter aims to determine the national and regional impacts of Covid-19 on Mexican tourism and analyze potential recovery scenarios. To this end, the study looks at tourism performance in Mexico in 2020 and compares it to the experience of the H1N1 influenza epidemic of 2009. The methodology uses a spatial econometric model to simulate potential impacts and prospective recovery scenarios. Finally, recommendations for tourism policy consider new trends in tourism, namely the rise in tourism advertising through digital platforms, the surge in domestic, rural and environmental tourism, and the development of a more informed, demanding and selective consumer.