Swine flu destroys Mexican tourism

Mexico is going through what is the biggest drop in its tourism revenue since records began in the 1980s because of the swine flu scare. Tourism officials are speaking of a "lost summer" after visitors, particularly from the US and Canada, cancelled their holidays.

They are not expected to return in large numbers until December. Some airlines have dramatically reduced flights to Mexico, and cruise liners are still avoiding Mexican ports. Luxury hotels in the capital said just 4% of their rooms were occupied at the height of the crisis, which broke in April.

Tourism represents 8% of Mexico's GDP and directly employs two million people. Analysts say the slowdown is an additional challenge for the country, which has been hit badly by the global economic recession. The drop in tourism will be sorely felt as a drop in U.S. demand for Mexican manufactured goods has pushed Mexico into its most severe recession since a 1995 financial crisis. Tourism is one of Mexico's top sources of foreign currency, accounting for about 8% of the economy. The sector employs about 2m people across the country. The Mexican government is preparing a major campaign to entice visitors back. Privately, officials say that the fact swine flu has now spread around the world might benefit Mexico because potential tourists will realise they risk catching the virus whether they stay at home or travel to Mexico.

Desperate to lure back vacationers, hotels in Cancun and down the Caribbean coast have cut rates by up to 70 percent. Some are even offering three years of free vacations to any visitor who catches the new flu from a visit to Mexico!