US Mexico land border

Economic Impact of U.S. – Mexico Border Closure

Non-essential travel across the land border between the US and Mexico remains restricted for 17 months and continues on the onset of the COVID-19 pandemic.

This could have devastating impacts on Mexico’s tourism industry, says GlobalData, a leading data and analytics company. 

GlobalData’s latest report, ‘Tourism Source Market Insight – United States’, reveals that in 2020, the US spent the most on outbound travel with average spend per resident totaling $3,505. Canada was the second highest spending source market with $1,576, followed by Colombia with $1,286.

mexico tourism expenditure2020

Rheanna Norris, Travel and Tourism Analyst at GlobalData, comments: “While the Mexican Government is allowing travel into the country, restrictions on outbound travel are being applied by the US. Since the US is by far the highest spending source market for visitors, significantly ahead of other important source markets such as Argentina, Colombia and the UK, Mexico’s tourism industry will feel the restriction of non-essential travel from the US.”

According to a GlobalData survey, travelers are willing to travel long-haul, which Mexico may be able to lean on. The survey found that out of 1,442 respondents globally, 37% said that they are willing to take an international trip to a different continent. In the short-term, the Mexican tourism industry may be able to lean on the long-haul holiday market, targeting pandemic savers looking for a ‘bucket list’, post-COVID-19 trip. However, the tourism industry may still then struggle to compensate for the loss of the high-spending US traveler. According to GlobalData, in 2020 83% of all arrivals to Mexico were from the US, showcasing the country’s reliance on the US outbound market.

Norris concludes: “Despite the current restrictions, Mexico could experience a surge in visiting friends and relatives (VFR) travel from the US when it is fully permitted, as this is a top motivator for travel between the two countries. Travelers may, however, experience a hike in air fares due to the sudden increased demand. However, the desire to see loved ones after so long will encourage travelers to pay these high prices, benefitting airlines.”

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