January was the first month ever (other than December) when Canada received more Mexican than German tourists.

As we all know, the US inbound market continues it's, until now, unstoppable decline (more on the US in one of my next posts). The Mexican inbound market, on the other hand, seems to continue it's unstoppable growth (so far). Having been to Germany recently, I was very impressed with what I saw in Berlin. Germany's economy is the strongest in Europe. That country is the largest exporter from that area of the world and as recent as 2005 it was the world's largest exporter. Germans, in general, enjoy a high standard of living as well as a high income per capita. Why is it then that the numbers of inbound German visitors has dropped dramatically since 1999? That year Canada welcomed 425,648 German visitors. Last year, 2007, the figure was 318,165. (France, another traditional overseas market for Canada, generated 428,002 visitors in 1999 but only 379,268 in 2007)
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I am sure there are many opinions just as there are when it comes to explaining the US decline. I think what's happened to the German market is a combination of fierce competition from a myriad of other destinations and the rise of the Canadian dollar in recent years (it's now a lot cheaper for Germans to go the States). Furthermore, Germany is a mature market for Canadian tourism, where you may find the "been there done that" or the "what's new or better in Canada that I cannot find closer to home or in the US?" excuses more often than not. But I am by no means an expert in the German inbound market. I am simply using Germany as an example of the opposite phenomenon that I see happening in Mexico. This past January 2008 was the first month since I have been tracking the numbers (other than December for obvious reasons) when Mexican tourists outnumbered German visitors. Mexicans = 13,716 Germans = 11,230. Why is this quite significant? Because in my opinion it's an example of why economics (price) is not the most important attribute when it comes to travel. In 1999 Canada said bienvenidos to 132,870 Mexican tourists. Last year? 250,633!

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Mexico, like Germany is a top exporter, but not in the top ten. Mexico is a developing nation with a large proportion of its population living in poverty, but with a substantial middle class (the size of which is approximately the size of the Canadian population). Why is the Mexican inbound market still growing despite the rise in the value of the Canadian dollar? The reasons are simple and opposite to what has been happening with segments of the American and German markets (and perhaps French as well). Canada is still very new to Mexicans. There's a long road to travel in that market before we encounter the "been there done that" and the "what's new or better in Canada that I cannot find closer to home or in the US?"

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Mexico is posed to become a large overseas market for Canada. Even though I don't think it will surpass German visitors this year, I am convinced it will in time, provided we continue to use consistent, constant and creative marketing there. It's conceivable that in 3 to 5 years time, Mexico will surpass Germany and France as the second most important overseas (and third overall) inbound market to Canada, after the UK, if annual growth rates for the three countries remain close to 2007 levels (Germany 1.6%, France 1.5%, Mexico 17.1%). There are still many Canadian destinations and attractions with a lot of potential in Mexico that are not doing enough to develop that market (most notably Nova Scotia) for their benefit. Mexicans are beginning to look for new and different products and experiences in Canada besides Toronto, the Falls, Vancouver and Montreal. It is time to increase efforts and make Mexico the natural inbound market it should be. more on marketing Canada to Mexicans in future posts

(source for figures: Statcan Service Bulletins International Travel Advance Information 1999 to 2007)

Jaime Horwitz MBA

www.canadaenespanol.ca

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