Mexico was up 10.1% in July compared to the same month last year and up 16.7% for the Jan to July period. July is the busiest and most expensive month for travel from Mexico to Canada. The numbers may be approaching air capacity at more than 1,500 visitors per day (47,323 for the month) and may stabilize around this number unless more lift is added in coming years. For the first time ever Canada received over 150,000 Mexican visitors during the first half of the year (according to CTC data Mexicans spend on average $1,420 per trip – in my experience many spend a lot more than that).
Good numbers notwithstanding, it is now more important than ever to continue developing this market. Canada must position itself as a “must visit” destination in the minds of Mexican consumers, for two very important reasons:
1) the continued strength of the Canadian dollar vis a vis the US greenback may start to affect travel from Mexico to Canada. In the past two years some packages from Mexico to Canada have gone up almost 40% in price. Some packages are up almost 20% from last year (packages from Mexico to Canada are priced in US dollars even though the consumer can pay the equivalent in pesos). While price elasticity is quite good among affluent Mexicans, higher prices and a higher Canadian dollar may encourage them to look at their opportunity costs, e.g. Where else can we go for this amount of money?
Good numbers notwithstanding, it is now more important than ever to continue developing this market. Canada must position itself as a “must visit” destination in the minds of Mexican consumers, for two very important reasons:
1) the continued strength of the Canadian dollar vis a vis the US greenback may start to affect travel from Mexico to Canada. In the past two years some packages from Mexico to Canada have gone up almost 40% in price. Some packages are up almost 20% from last year (packages from Mexico to Canada are priced in US dollars even though the consumer can pay the equivalent in pesos). While price elasticity is quite good among affluent Mexicans, higher prices and a higher Canadian dollar may encourage them to look at their opportunity costs, e.g. Where else can we go for this amount of money?
2) more threatening than a high Canadian dollar is the possibility that the Canadian government may impose visa restrictions on Mexican visitors. If you read the Globe and Mail you may have seen several articles in recent weeks commenting on the fact that Mexicans are now the number one nationality seeking refugee status in Canada. While the overwhelming majority of these claims are bogus, the fact is that the numbers are beginning to get the attention of the media and the government. Not too long ago Costa Rica was slapped with visa requirements after the numbers of Costa Rican visitors overstaying their welcome in Canada became an issue. A visa requirement for Mexican visitors could result in a dramatic reduction in tourists that could take a few years to overcome. It is unfortunate that the unethical behaviour of the few can make things very difficult for the many. Mais, c'est la vie n'est pas?
What can be done about these clouds on the horizon? Regarding the Canadian dollar I would suggest that suppliers and tour operators take their sharp pencils out and price their offerings as competitively as possible. Regarding visas I think we, as an industry, should be proactive and try and prevent the visa restriction from happening. One thing the Canadian government could do is amend the Safe Third Country Agreement with the United States so that Mexicans cannot ask for refugee status at the border (under the agreement nationals from countries for which Canada does not require visas are exempted from the Safe Third Country Agreement).
I am thinking of writing a letter to government officials regarding this issue. A few years ago when Canada imposed visas on Costa Ricans, I spoke to an official at the Ministry of Citizenship and Immigration to inquire about whether Mexico might also get a visa restriction. Government being government, I did not get a straight answer other than that all exempted countries are monitored on an ongoing basis, but at that time things look good with Mexico. But that was before the Safe Third Country deal and before Mexicans became the #1 refugee claimants. In my letter I plan to suggest that if Mexico is to get visa restrictions it may be helpful to work on a deal whereby Mexicans who have US visitor visas can be exempted from the Canadian visa (over 9 million Mexicans have US visitor visas). If that is not possible (probably not politically correct) then perhaps the visa restriction can be delayed in order to figure out the fastest and most efficient way for Mexicans to get one and to give time to the tourism industry to adjust and prepare for the initial shock.
Finally, I reiterate the importance of marketing in all its forms to continue to position Canada as a must visit destination all year round.
If you have any ideas or suggestions about this issue please leave a comment.
Saludos,
Jaime
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