Mexico sees tourism recovering from 2009 flu blow

Mexico is facing a $1.6 billion drop in tourism revenues for 2009, thanks to a deadly flu outbreak, but the fall is smaller than first feared and visitors should return in 2010, the government said on Monday.

Tourism is Mexico's No. 4 source of foreign currency after oil exports, migrant remittances and foreign direct investment, and visitors spent $13.3 billion in 2008 visiting its sandy beaches, colonial towns and archeological vestiges.

But this year the H1N1 flu epidemic combined with soaring drug gang killings and a global economic slowdown to create a toxic cocktail that lightened Mexico-bound flights and caused big losses in the hospitality industry.

"We've never had what we had this year," Tourism Minister Rodolfo Elizondo told a news conference. "The economic fall, influenza, the drug trafficking issue … factors that combined to create a difficult year."

The drop in tourism income was less bleak, however, than early forecasts of around $2 billion or even $4 billion.

Between January and October, Mexico logged foreign income from tourism of just above $9 billion — a 17 percent drop compared to the same period last year.

Elizondo forecast next year's numbers returning to around the $13 billion seen last year.

Mexico, ranked by the United Nations' World Tourism Organization as among the world's top 10 tourist destinations, saw its international image blighted in April and May by an outbreak of H1N1 flu that paralyzed Mexico City and rattled foreign visitors.

Some foreigners are also unnerved by raging battles between rival drug trafficking gangs and the military which have killed more than 16,000 people since late 2006.

The Mexican government is projecting an economic contraction of about 7 percent this year.