The travel boom that made Mexico one of the world’s top tourist destinations during the pandemic is coming to a halt as the appreciation of the peso increases travel costs, while making Mexicans opt to go abroad during vacation months.
The number of foreign travelers arriving in Mexico during August, high-season for summer holidays in the northern hemisphere, dropped 1.5% compared to the previous year, the first annual contraction since March 2021, the national statistics institute INEGI said Tuesday. Meanwhile, Mexicans flying abroad jumped more than 26% that month, it said.
In July, Mexico’s peso posted a seventh-straight month of gains, the longest such streak in 15 years, with the currency hovering near its strongest level since 2015. While the peso lost some ground since late August amid market volatility, it’s still the world’s second-best major currency this year, with a gain of 8.8% against the dollar.
The so-called super peso has made a trip to Mexico more expensive in dollars for international travelers, with total spending down 7.2% in August, according to the INEGI estimates. At the same time, spending by Mexicans flying abroad grew almost 30%, a sign also of robust consumer demand as Latin America’s second-largest economy is seen growing 3.2% this year.
Mexico was one of the few main tourist destinations that didn’t restrict international tourism during the Covid-19 pandemic, benefiting from the arrival of travelers — particularly from the US — that were barred or limited in other countries between 2020 and 2022.
Mexico is no longer the sizzling travel spot it was during the pandemic after the peso’s rise makes vacations more expensive
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