Mexico beach resorts face tourism slump as U.S. travel demand weakens

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Mexico beach resorts tourism slump

Highlights

International traffic at Cancún airport fell almost 12 per cent year on year in September, with U.S. passenger visits to Mexico down 5.8 per cent January–August.
Peso strengthened almost 12 per cent over 18 months, making Mexico costlier for visitors as U.S. travel weakens and outbound trips by Mexicans rise by double digits.
Tulum airport arrivals plunged more than 40 per cent this year amid high prices, poor infrastructure, visible waste, and surging security concerns linked to cartel activity.

Airport traffic declines at major resort hubs

As reported by the Financial Times, international traffic at Cancún airport is down almost 12 per cent year on year in September, while Mexico’s international arrivals to airports fell 1.9 per cent from January to August versus a year earlier. U.S. passenger visits are down 5.8 per cent over the same period, with the steepest falls recorded in beach markets such as Puerto Vallarta, San José del Cabo and Cancún, based on government data.

A rise in Canadian travellers avoiding the U.S. amid President Donald Trump’s trade war is not enough to offset the drop in Americans. By contrast, Spain and the Dominican Republic are attracting more U.S. visitors.

The weaker performance is adding pressure to Mexico’s economy, which is already being affected by trade disputes with the U.S. GDP grew 0.6 per cent in 2025 and the IMF projects 1.2 per cent growth this year, increasing pressure on President Claudia Sheinbaum as she manages Mexico’s biggest fiscal deficit since the 1980s.

Francisco Madrid, director of the Sustainable Tourism Advanced Research Center at Universidad Anáhuac Cancún, says Mexico needs to revisit its strategy after gaining market share during the pandemic but now facing softer U.S. demand. He also says the strong peso is encouraging more higher-income Mexicans to travel abroad, with outbound trips rising by double digits.

Seaweed, security and pricing weigh on recovery

Part of the decline is linked to the peso, which has strengthened almost 12 per cent over the past 18 months because of relatively high interest rates and uncertainty in the U.S., making Mexico costlier for visitors. Although the currency has started to weaken as the U.S. Federal Reserve begins raising interest rates, regaining lost travellers remains difficult.

Resorts are also dealing with environmental and security problems. Cancún recorded a record influx of foul-smelling sargassum this year, while nearby Tulum is becoming a warning sign for the sector, with international arrivals to its airport down more than 40 per cent this year amid high rental prices, weak infrastructure and visible waste.

Tulum and other coastal destinations are also facing worsening security as cartels target wealthy visitors. Mercedes Rodríguez, who runs a nature and archaeological tour company in Tulum, says the area’s party scene has been accompanied by a sharp rise in insecurity tied to drug sales.

Puerto Vallarta has also suffered after images of roadblocks and large smoke plumes spread globally in February when Mexican forces killed cartel leader Nemesio "El Mencho" Oseguera. International arrivals there are down 19 per cent in the year to August.

Mexico’s government says external factors such as fuel costs are behind the tourism slowdown and argues that flight cuts to Tulum reflect business decisions rather than insecurity. Tourism represented more than 8 per cent of Mexico’s GDP in 2024, but while overall foreign visitor numbers are up 7 per cent this year, that increase is skewed by cruises and day-trippers at the U.S. border, who spend much less.

Sheinbaum has proposed raising a tax on tourists by 35 per cent to help public finances after the previous government cut tourism marketing spending and dismantled a network of promotion offices. The industry is resisting the plan, with Jorge Paoli, president of the National Association of Hotel Chains, calling for part of visitor entry payments to be reinvested in attracting future travellers.

Caribbean cruise fare discounting was the focus of our earlier coverage, as operators added significant capacity to the region ahead of the peak winter season. We noted that the supply-demand imbalance was pushing prices down and weighing on earnings expectations for major cruise lines, even as companies tried to support longer-term demand through private-destination investments and flexible ship deployment.

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