Mexico’s Tourism Sector and its Poverty Reduction Potential Mexico’s Tourism Sector’s GDP • Tourism is not generally considered as a sector of economic activity in the System of National Accounts (SNA) • As a result, the tourism sector’s contribution to GDP cannot be assessed directly • INEGI, Mexico’s National Statistics Institute, produced the Tourism’s Sector Satellite Account, which is part of the SNA • This allows one to decompose the tourism sector’s contribution to GDP into five sources: o Manufacturing Industry o Trade, Restaurants and Hotels o Transportation, Storage and Communications o Communal, Social and Personal Services o Other Goods and Services Mexico’s Tourism Sector’s GDP Tourism Sector’s GDP as a share of total GDP in Mexico: 1993-2004 8.5% 8.3% 8.0% Percent 7.5% 7.0% 7.0% 6.5% 6.0% 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: Cuenta Satélite del Turismo de México. Instituto Nacional de Estadística, Geografía e Informática (INEGI). Mexico’s Tourism Sector’s GDP and its Composition Composition of Mexico’s Tourism Sector’s GDP: 1993-2004 Trade, Restaurants and Hotels 46.4% Manufacturing Industry 20.3% Other Goods and Services 2.2% Transportation, Storage and Communications Communal, 25.3% Social and Personal Services 5.9% Source: Cuenta Satélite del Turismo de México. Instituto Nacional de Estadística, Geografía e Informática (INEGI). Mexico’s Tourism Sector’s GDP and its Growth Annual Growth Rate of Mexico’s Tourism Sector’s GDP: 1993-2004 4.5% 4.1% 4.0% 3.5% Percent 3.0% 2.9% 2.5% 2.1% 2.0% 1.8% 1.7% 1.6% 1.5% 1.2% 1.0% 0.5% 0.0% Total GDP Tourism Sector GDP Manufacturing Industry Trade, Transportation, Restaurants and Storage and Hotels Communications Communal, Social and Personal Services Other Goods and Services Source: Cuenta Satélite del Turismo de México. Instituto Nacional de Estadística, Geografía e Informática (INEGI). Mexico’s Tourism Sector’s GDP and its Growth Annual Growth Rate of Mexico’s Tourism Sector’s GDP: 1993-2004 110% 100% 100.0% 90% 80% Percent 70% 60% 48.2% 50% 40% 31.7% 30% 20% 16.0% 6.7% 10% 0% -2.7% -10% Tourism Sector GDP Manufacturing Industry Trade, Transportation, Communal, Social Other Goods and Restaurants and Storage and and Personal Services Hotels Communications Services Source: Cuenta Satélite del Turismo de México. Instituto Nacional de Estadística, Geografía e Informática (INEGI). Mexico’s Tourism Sector’s Employment Mexico’s Tourism Sector Employment as a Share of Total Employment: 6.4% 1993-2004 6.3% 6.2% 6.0% Percent 5.8% 5.6% 5.4% 5.4% 5.2% 5.0% 4.8% 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: Cuenta Satélite del Turismo de México. Instituto Nacional de Estadística, Geografía e Informática (INEGI). Mexico’s Tourism Sector’s Employment and its Composition Composition of Mexico’s Tourism Sector’s Employment: 1993-2004 Trade, Restaurants and hotels 59.8% Manufacturing Industry 13.3% Other Goods and Services 2.3% Transportation, Storage and Communal, Social and Communications 17.2% Personal Services 7.4% Source: Cuenta Satélite del Turismo de México. Instituto Nacional de Estadística, Geografía e Informática (INEGI). Mexico’s Tourism Sector’s Average Productivity Average Labor Productivity in Mexico’s Tourism Sector: 1993-2004 Economy-wide Tourism Sector Manufacturing Industry Trade, Restaurants and Hotels Transportation, Storage and Comunications Comunal, Social and Personal Services Other Goods and Services Average value added per worker (in thousands of constant 1993 pesos) 100 90 80 70 60 50 40 30 20 10 0 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 Source: Cuenta Satélite del Turismo de México. Instituto Nacional de Estadística, Geografía e Informática (INEGI). Mexico’s Tourism Sector’s GDP • The Tourism’s Sector Satellite Account reveals the following facts: o The tourism sector represents close to 7% of GDP and 5.4% of total employment in Mexico o Within the tourism sector’s GDP, the Trade, restaurant and hotel subsector accounts for the largest part of (47%), followed by Transportation, storage and communications (25%), Manufacturing industry (20%), Communal, social and personal services (6%) and Other goods and services (2%) o The tourism sector has grown at a lower rate than the rest of the economy: over the period 1993-2004 the economy grew at an average annual growth rate of 2.9%, whereas the tourism sector grew at 1.6%. As a result, the tourism sector contribution to GDP, although high relative to other sectors, has been declining o The tourism sector has significantly higher average labor productivity than the rest of the economy Mexico’s Tourism Sector’s Competitiveness World Economic Forum’s 2009 Travel & Tourism Competitiveness Index (TTCI) Country/Economy Canada United States Barbados Costa Rica Brazil Mexico Puerto Rico Panama Chile Jamaica Uruguay Argentina Dominican Republic Guatemala Colombia Peru Honduras Trinidad and Tobago El Salvador Ecuador Suriname Guyana Nicaragua Venezuela Bolivia Paraguay Overall Index Regional r Overall ranScore 1 5 5.32 2 8 5.28 3 30 4.77 4 42 4.42 5 45 4.35 6 51 4.29 7 53 4.27 8 55 4.23 9 57 4.18 10 60 4.13 11 63 4.09 12 65 4.08 13 67 4.03 14 70 3.9 15 72 3.89 16 74 3.88 17 83 3.77 18 84 3.75 19 94 3.63 20 96 3.62 21 99 3.54 22 102 3.5 23 103 3.49 24 104 3.46 25 114 3.33 26 122 3.16 Travel and Tourism T&T business T&T human, regulatory environment and cultural, and natural framework infrastructure resources Rank Score Rank Score Rank Score 23 5.41 4 5.36 10 5.19 57 4.7 2 5.47 1 5.67 19 5.47 29 4.62 45 4.21 48 4.94 55 3.77 31 4.54 95 4.12 69 3.53 4 5.4 80 4.34 62 3.66 13 4.87 44 4.99 41 4.1 84 3.71 53 4.8 56 3.77 53 4.14 49 4.87 58 3.76 64 3.92 51 4.85 57 3.76 80 3.76 45 4.98 74 3.33 57 3.96 74 4.4 70 3.51 41 4.34 54 4.75 71 3.46 68 3.88 81 4.32 81 3.2 48 4.17 91 4.18 88 3.08 34 4.43 89 4.24 92 2.96 33 4.43 83 4.31 87 3.08 63 3.92 100 4.04 51 3.82 112 3.38 73 4.42 83 3.19 123 3.28 103 4.01 97 2.91 62 3.93 110 3.86 91 3.01 79 3.76 94 4.14 111 2.68 88 3.66 98 4.05 101 2.79 93 3.63 122 3.63 86 3.12 91 3.65 127 3.33 110 2.7 58 3.96 116 3.74 130 2.44 122 3.3 Mexico’s Tourism Sector’s Competitiveness • Mexico’s Tourism Sector needs to improve particularly in the following areas: 1. Policy rules and regulations 2. Environmental sustainability 3. Safety and security 4. Health and hygiene 5. Prioritization of Travel & Tourism 6. Air transport infrastructure 7. Ground transport infrastructure 8. Tourism infrastructure 9. ICT infrastructure 10. Price competitiveness in the T&T industry 11. Human resources 12. Affinity for Travel & Tourism 13. Natural resources 14. Cultural resources Mexico’s Tourism Sector’s Potential for Poverty Reduction Main characteristics Variables of interest Census household data National surveys of employment Limitations • Includes 32 metropolitan areas • Performed quarterly • Ratative panel data of 1 year • 199X-2004 ENEU • Includes 32 metropolitan areas • Performed quarterly • Rotative panel data of 1 year • 2005- ENOE National census National count • Performed every 10 years • Data based on AGEB and aggregated to municipalities • Performed every 5 years • Data based on AGEB and aggregated to municipalities • Detailed data on labor markets participation, incluing sector, income and characteristics of the job Information from both sources can not be merge • Detailed data on labor markets participation, incluing sector, income and characteristics of the job Includes “big” metropolitan areas and not “small” communities • Detailed data on individuals characteristics: location, education, income and some variables of labor markets Vary few variables can be used • Limited data on individuals characteristics: location, education Not reliable data on income 13 Mexico’s Tourism Sector’s Potential for Poverty Reduction Selection of “touristic” cities Selection of comparison cities Objective •To identify cities were tourism is a driver of growth •To identify cities were other sectors are drivers of growth Criteria •Cities were a high share of economic activity is related to tourism •Big cities? •Growth? •Different types of cities, beaches, colonial towns, cultural capitals and cities in the border •Cities related to: •Maquila •Oil •Agriculture •Government expenditures •Match toursitic cities with comparison cities in population and marginality index 1995 Database Economic census 2004 •Economic census 2004 •CONAPO Comparison of outcomes Conclusions •Analize differences in means in: total employment, formality vs. informality, marginality index 2005, migration •Same variables adjusted for migration •If possible inequality using ENOE •Economic census 2004 •CONAPO •ENOE 14 Mexico’s Tourism Sector’s Potential for Poverty Reduction Beaches resort Celestúm Economic growth Small beaches Playa del Carmen Pueblos Mágicos 200 Other little towns Tapalpa Arqueological sites In the period of our study: Beaches show the highest growth Mazamitla Valle de Bravo Puerto Vallarta and Nuevo Vallarta Cancún 50 Malinalco Los Cabos Tecolutla Huatulco Real del Monte Cihuatlán Acapulco Ixtapan de la Sal Cuetzálan Palenque Puerto Escondido Yahutepec Ixtapa 0 Arquelogical sites show the lowest growth Chichén Itzá La Huerta -20 Uxmal 40 20 Tourism importance (percent) 15 Mexico’s Tourism Sector’s Potential for Poverty Reduction Muy bajo Marginality index Bajo Medio Playa del Carmen Mazamitla Celestúm Playa del Carmen Tapalpa Chichén Itzá Alto Tecolutla Uxmal Playa del Carmen Mazamitla Mazamitla Celestúm Celestúm Tapalpa Tapalpa Tecolutla Uxmal Chichén Itzá Tecolutla Uxmal Chichén Itzá Muy alto 1995 2000 2005 16