MEXICAN GOVERNMENT, TOURISM INDUSTRY CONCERNED ABOUT NEW PASSPORT REGULATIONS FOR US CITIZENS.

Mexico is worried that its tourism industry will suffer because of the US government's decision to begin to require passports for US citizens who return from trips to Mexico, Canada, and the Caribbean. The Mexican tourism industry already had a difficult year in 2006 because of political instability,

The US instituted the new policy, effective Jan. 23, as part of its Western Hemisphere Travel Initiative (WHTI). Under the regulations, all returning air travelers are now required to produce a passport. The rule will be expanded to include passenger ships in 2008 and all travelers who cross into the US by land in 2009.

US territories, which require no passport, are expected to take some of the business that would have gone to Mexico and Caribbean countries. Puerto Rico is aggressively branding itself a no-passport destination with a US$36 million advertising campaign, while the US Virgin Islands has labeled itself "America's Caribbean."

In a recent report, the US Department of Homeland Security (DHS) said 6% of US citizens who had traveled by air to Mexico, Canada, and the Caribbean did not have a passport last year. Critics said this figure is very conservative. "In reality, the figure is closer to 17%," said Roberto Mena, a columnist for the Mexico City daily business newspaper El Economista.

The Secretaria de Turismo (SECTUR) has raised concerns that the new regulations will discourage some US citizens from making trips to Mexico. According to SECTUR projections, the passport requirement could reduce the number of US citizens traveling to Mexico by as many as 318,000 in 2007. This estimate is based on the number of US citizens who went through Mexican airport customs last year without presenting a passport.

Some organizations such as the World Tourism and Travel Council (WTTC) see a much more difficult situation. "Our statistics indicate that as many as 30% of the 1.5 million [US] visitors who came to Mexico by air last year lacked a passport," said the WTTC, whose members include several major hotel chains. US citizens comprise 84% of foreign tourists to Mexico, said SECTUR.

Tourism industry could lose jobs, millions of dollars

Officials estimate the decline in US visitors could cost the Mexican tourism industry about US$254 million in lost business during the year. Tourism is Mexico's third-largest source of foreign earnings, after oil and remittances from expatriates living in the US. Revenues from foreign tourism totaled US$10.8 billion in January-November 2006, SECTUR statistics indicate.