Hotels Begin Reopening as ‘Orange Traffic Light’ Turns On

Despite recommendations from international organizations such as the World Health Organization (WHO), the Mexican government has begun the transition to the new normal in some parts of the country following a traffic-light system. Although this decision could eventually lead to a longer battle against the pandemic, according to the WHO, the tourism sector is already taking advantage of it.

Since yesterday, the traffic light has gone from red to orange in states such as Baja California Sur, Chihuahua, Coahuila, Nuevo Leon, Tamaulipas, Durango, Zacatecas, San Luis Potosi, Jalisco, Aguascalientes, Michoacan, Guanajuato, Tabasco, Campeche, Yucatan and Quintana Roo. The epidemiological traffic light considers the opening of the tourism sector when the states reach the orange phase, at which time hotels can operate at 50 percent of their capacity both in rooms and in common areas.

However, some hotel chains started opening earlier. Grupo Hotelero Santa Fe, which has the Krystal, Hilton Resorts, ibis and DoubleTree chains in its portfolio, announced a gradual reopening on June 10. “We estimate that by the end of July we will have reopened 100 percent of our portfolio, which shows a favorable reservation trend. We also re-profiled our cash flow thanks to the support of the banks we work with, ensuring adequate working capital levels for this stage of restarting operations,” the group said in a statement.

In early April, the Director of the Institute for Industrial Development and Economic Growth (IDIC) in Mexico said that an important part of the recovery plan focused on regaining the trust of national tourists. For example, the Quintana Roo the government developed a strategy for the entire state, including Cancun, to grant certificates to tourist areas that validate them as COVID-19 free zones.

During 1Q20, arrivals at the main tourist destinations in the world contracted 22 percent. If stay-at-home orders are not relaxed internationally, global tourism will drop by between 60 and 80 percent, according to the World Tourism Organization (UNWTO). The most dramatic drop so far took place in March with a 57 percent decrease compared to the same period in 2019.

"Arrivals in March registered an abrupt drop after the start of confinement in many countries, the introduction of travel restrictions and the closure of airports and borders. All this translates to a loss of US$67 million for international arrivals," said the UNWTO report. In 2018, the tourism industry contributed 8.7 percent to Mexico’s GDP and 2.3 million jobs, surpassing those generated by the construction and automotive industries.