CANCÚN, Mexico—Since this once-sleepy stretch of Mexico’s Caribbean coast began its transformation into a glitzy resort community 50 years ago, it has thrived by attracting millions of vacationers during its summer and winter seasons.
These days, however, there are long stretches of deserted beach. Hotel occupancy has fallen below 30%. Shopping malls are empty. And the tourism industry that helped pull Cancún and its people out of poverty and put them on a more prosperous path is struggling.
Samuel Gonzalez made a decent living in marine parks training dolphins and selling tour packages in Cancún. He hasn’t worked in five months.
Photo: Samuel GonzalezSamuel González—a 38-year-old who came to Cancún years ago from Oaxaca, one of Mexico’s poorest states, and flourished selling tour packages—says he has been out of work for five months now and worries about what the future holds.
“In Cancún there is no economic activity other than tourism,” said Mr. González. “For many, it’s like the end of the world.”
The global tourism downturn that has accompanied the Covid-19 pandemic hit airlines and hotel chains and hurt hospitality workers around the world. But it is being felt most acutely in the world’s less-developed nations, such as Mexico, where tourism is an important driver of economic development.
From Rio de Janeiro to Venice to the Maldives, the global tourism industry is expected to lose more than 100 million jobs, or about one in three tourism jobs world-wide, according to estimates from the trade group World Travel & Tourism Council, or WTTC.
Latin America and the Caribbean are among the regions most dependent on tourism. Small islands are particularly vulnerable. For Aruba, tourism represents nearly 85% of economic output, according to estimates from the Inter-American Development Bank. For the Maldives in South Asia it is more than 66%. The Bahamas ranks fifth world-wide at more than 59%, IDB’s data shows.
Destinations that rely heavily on cruise ships, like Nassau in the Bahamas or Cozumel in Mexico, also are in dire shape. Most of their regular customers are Americans, and cruise lines have suspended operations from U.S. ports until November.
Many tourism-dependent countries tend not to be diversified and import everything from food to manufactured goods. With their large pools of unskilled workers, these countries have few hard-currency cushions besides tourism and remittances, says Henry Mooney, an IDB economist.
“Instead of oil, these countries sell sun and sand,” Mr. Mooney said.
Tourism has fewer monopolies and tends to foster entrepreneurship and social mobility, generating jobs for everyone from cabbies to housekeepers to tour guides and inn owners, economists say.
A bar at The Moon Palace hotel complex, one of the world’s largest hotels. It is serving about 1,300 guests, far below the 25,000 it typically sees during the high season.
Nearly two-thirds of foreign-tourist activity occurs in Cancun and the wider Mayan Riviera region. A neighborhood in Cancun in July.
Many businesses in Cancun have closed down for lack of tourists.
A public plaza in Cancun in July.
Hotel beaches in Cancun are open for guests, but public beaches in the city have been closed because of the pandemic.
A bar at The Moon Palace hotel complex, one of the world’s largest hotels. It is serving about 1,300 guests, far below the 25,000 it typically sees during the high season.
people in a public plaza in apopular neighborhood. Cancún, Mexico. July 4, 2020
Over the past two decades, hundreds of millions of people reached the middle class in places like India and China and began traveling abroad. Tourism has grown so fast in the past two decades that one in five global jobs created during that time were in the industry, according to the WTTC.
“Like cellphones in the 90s, it used to be very expensive to go on vacation abroad,” said Alex Zozaya, the group’s vice chairman. “Now it’s a commodity.”
Mexico’s central bank, at the government’s direction, founded Cancún five decades ago to help diversify the country’s oil-dependent economy. The construction of an international airport, roads and megahotels along the string of untouched beaches helped propel the country into the world’s No. 7 tourist destination by number of visitors.
“Cancún was a paradise. There was plenty of food, turtles and lobsters. It was the Mexican version of the American dream,” said Manuel Polanco, who migrated here from a neighboring state in 1973 and spent his first night in a hammock.
A mangrove in Cancún. Tourist arrivals to Mexico plunged 87% in June.
He worked in a car workshop repairing alternators for trucks, then moonlighted as a cabbie, a job that eventually propelled him to become the owner of cab and intercity bus fleets and a public-transport pioneer in the region.
“Anyone who came at that time and got their act together was king,” said Mr. Polanco, who never finished elementary school but whose three children all got university degrees. “If you sold rocks, people would buy them.”
Today, tourism’s contribution to the Mexican economy surpasses 15%. About 24 million foreign tourists visited Mexico last year, spending some $21 billion, government data shows. The Cancún Hotel Association estimates that the Mayan Riviera, as this region is known, captures 65% of foreign-tourist activity.
The tourism boom wasn’t an unqualified blessing. Corruption flourished in the 1990s and organized crime followed. Five-star hotels sit a few miles from shantytowns filled with those who hope to follow Mr. Polanco’s footsteps into the middle class.
Jorge Reyes lost his job as a cement-truck driver in Cancún after the pandemic shut down hotel construction.
His house in a Cancún shantytown has no electricity or running water. His family of five is relying on a Catholic charity for food.
Jorge Reyes, 37, lives in the settlement of El Porvenir, or “The Future.” His job as a driver of a cement truck used in hotel construction has only allowed him a bare-bones cinder-block home and a tin roof. There is no electricity or running water.
Now the pandemic has dealt a blow to his aspirations for more. He lost his job and received no severance, and he now relies on a Catholic charity to help feed his family of five. He wonders if construction on new hotels will ever resume.
At the moment, that seems a distant prospect. Tourist arrivals to Mexico plunged 87% in June, with spending falling to $148 million from $1.7 billion a year before.
Since June, Cancún has reopened but with many limitations to ensure tourists are safe. Thousands of bellboys, waiters and housekeepers, all donning protective gear, are back on the job even though the number of infections here are still rising each day.
Some 380,000 tourists from the U.S. and Mexico have arrived here since early June, according to local government estimates. But hotel occupancy rates are at about 25%, below the 30% cap set by federal health authorities.
Some hotels are cutting down on housekeeping to prevent infections. Buffets and pool bars are gone. Reception desks have protective screens. Most hotels have tested staff for Covid-19 and conduct regular temperature controls. They also offer face masks and sanitizing wipes as part of their amenity kits. Beaches are open for guests, but not for locals.
The Moon Palace hotel complex—Cancún’s top employer, with a staff of 10,000, and one of the world’s largest hotels—is back to life, though not as before. It is now serving about 1,300 guests, a far cry from the 25,000 that was the high-season norm in the past.
“We called, we knew that the hotel capacity was below 30% and that health measures were at their maximum,” said Ruth Elizalde, a beauty-product distributor visiting from Mexico City. “We said, ‘This is the time to take advantage of the fact that the hotel is empty’ Health-wise, we all run risks everywhere.”
A lone boat in Cancun's Nichupté lagoon.
Write to Santiago Pérez at santiago.perez@wsj.com
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