Mexico tourism industry is devastated
There are two major revenue streams for Mexico. The first one is the exports to US which has been very badly hit in the last one year due to US economic recession. Mexico has seen a sharp rise in unemployment due to crashing exports to US.
The second major source of revenue for Mexico is from the foreign travelers who visit the country and stay in their hotels. The global economic slump lead to over 30% drop in the tourism revenue in the last one year.
Now the Swine Flu is adding fuel to the already raging fire. The Swine Flu emanating from Mexico, has already forced all the other countries to cancel all their tourist visits into Mexico. This has resulted in major cancellation of hotel bookings across Mexico.
There are millions of small time Mexico traders who sell products and services to visiting foreign travelers who are now left with zero revenue. All these families will now suffer badly for months together. These people might be forced to go for high interest bearing unsecured loans from local lenders, which might keep them close to debt trap for long time to come.
There are indeed stray signs of US economic recovery, and if that continues, we can expect some relief for the Mexican economy too.
