Effects of COVID-19 in the Yucatán Peninsula

Published 04/21/2023 in Scholar Travel Stipend

Written by Hanah Jun | 04/21/2023

This paper is a follow-up study of the Yucatán Peninsula I conducted in mid-2021 exploring the intersection of public health, regional economics, and global market development in the region. It re-investigates the state of the Yucatán peninsula’s regional economy in the context of the evolution of the COVID-19 pandemic.

The COVID-19 pandemic ravaged homogenous economies like that of the Yucatán Peninsula. The Yucatán Peninsula is located in southeastern Mexico and is comprised of the states of Yucatán, Quintana Roo, and Campeche. The main source of income for the region is tourism, which represents the third-highest contributor to Mexico’s overall GDP and the highest contributor to the Peninsula’s GDP (Gilbert & Rosenberg 2010; López 2020). It was an industry devastated by the pandemic globally. And Cancún, one of the most popular tourist destinations in the Americas, saw one of the greatest declines in visits. This led to widespread job losses and economic hardship in the region.

The area also experienced an enormous wave of COVID-19 cases and deaths during the course of the pandemic, especially as the region attempted to open its borders as much as it could given its reliance on tourists’ economic activity. COVID cases flooded hospitals, decreasing the overall supply of medical goods and personnel available.

As I discussed in my last written study, although governments and health organizations implemented a number of public health measures to reduce the spread of the virus, these initiatives were not completely effective. A large factor correlating to these outcomes was the character of the region as a service-based destination for overseas tourists — employees within and outside of hotels would be hesitant to enforce measures, such as wearing masks, if they made some visitors uncomfortable, especially since tips are an important supplement to wages. City dwellers from abroad would escape to this region to participate in a culture of looser COVID restrictions, even as lockdowns were present in the Peninsula at the time.

This culture existed even as the number of visitors declined sharply due to fears of contracting the virus. In Cancún, hotel occupancy rates dropped over 70% in the first few months of the pandemic. Many hotels and resorts closed — the heart of economic activity in the region — which led to wider-scale job losses in other sectors reliant on tourism, such as restaurants, transportation, and retail.

Recovery took place at a slow pace, and it is still an ongoing process. From an immediate visual standpoint, activity was much more prominent a year and a half later, from the bustling airport to the greater volume of traffic on the highways. Cities had a subjective feeling of being more alive, as compared to the quiet roads and ghost towns lining highways in past years of the pandemic. My time was not spent at the famous nightclubs and resorts of the Cancún Hotel Zone, so I could not comment on the nightlife, but even the quieter towns outside the Hotel Zone had an energy to them during the day [Appendix 1 / Figure 2].

The area is not completely tension-free, however. One new occurrence in the region that has stymied a peaceful return to normalcy has been the legalization of Uber in Cancún, the outcome of a yearslong battle between taxi drivers and the private ridesharing company (Van Slyke, 2023). Taxi unions have vehemently opposed this move, protesting differences in regulations for public taxi transportation and private ridesharing obligations — or lack thereof. The strict union operations have led to a monopoly in the region, meaning taxi rides and organized public transportation is much higher than the cost of an Uber (Van Slyke, 2023). The legalization of Uber has also caused a rise in violence in the region in affected transportation routes. One of the main roads to the Hotel Zone in Cancún, for instance, was blocked off by medallion taxi drivers, and some Ubers have been attacked for operating (Van Slyke, 2023). Some travelers in both cases have been forced to transit on foot (Johnson, 2023). In fact, the U.S. State Department issued a general warning to travelers heading to Cancún, Playa del Carmen, and Tulum, to avoid taking Ubers to avoid being a victim of violence or being involved in a violent situation.

As discussed in my last study, there is a pervasive, complex relationship between travelers and locals intertwined with history and geopolitics. Loose public health behaviors by visitors have increased tension from residents, but only to a limited degree, given the region’s economic dependence on tourism. The majority of locals feel a dependence on foreign capital for their survival, even as these same visitors pose greater health risks for the local community. Some locals feel positively towards greater levels of tourism despite health concerns. These all play into a complicated social dynamic, where the local and foreign community have to find a balance between cultivating proliferating business activity while minimizing risk of lower health or economic outcomes for the same or other people in the community — a pillar of the Milken Institute values.

With the COVID-19 fear element being a reduced factor in the wake of vaccine campaigns and greater public health measures internalized in societies, the delicate economic status of the region is brought to the forefront. Taxi unions have barely been able to provide for their workers via stabilized, elevated ride prices. Tourism levels in the region have not yet been restored to pre-pandemic levels, even though drivers are optimistic that they will continue to rise in the coming months. Thus, the legalization of Uber represents a force of destabilization which undercuts union prices and threatens the tango of economic recovery in the Peninsula. The degree to which resistance and violence have risen in response to these policy changes underscores the economic anxiety of the region, which has barely scraped itself out of a steep decline in productivity.

So what does this mean for the short-term future of the region? Transportation unions and Uber drivers will have to determine how to best coexist with each other, or push one group out of economic spaces. The likely outcome will be the formation of operations separated by locale, in which one primary economic actor holds a monopoly over a certain area, currently seen in the dynamics of tour operators on the peninsula. Beyond that? The region will have to continue to grow and diversify in sectors related to and outside of tourism, as numbers continue to fluctuate, not quite reaching pre-COVID levels. The greatest protection will be developing heterogeneity in industry sectors, which is a hard task given the area’s historic reliance on tourism — but not an impossible task given enough domestic funding and social buy-in to such longer-term structural changes.  

References

Gilbert J.M., and Rosenberg, E.S. “Holiday in Mexico: Critical reflections on tourism and tourist encounters.” Duke University Press, 2010.

López, Ana M. “Top Tourist Destinations in Mexico 2019.” Statista, 18 Aug. 2020, https://www.statista.com/statistics/1135858/leading-tourist-destinations-mexico/. 

Johnson, A. “U.S. State Issues Travel Advisory for Cancún, Warns Against Using Uber.” The Thrifty Traveler. Retrieved from: https://thriftytraveler.com/news/travel/cancun-travel-advisory-uber/. 

López, Ana M. “Tourism Participation in Mexico's GDP.” Statista, 19 Apr. 2021, https://www.statista.com/statistics/977929/mexico-tourism-share-gdp/. 

Van Slyke, M. “Uber Is Operating Legally In Cancun, Says Judge.” The Cancun Sun. 13 Jan 2023, https://thecancunsun.com/uber-is-operating-legally-in-cancun-says-judge/.

Appendix

Appendix 1: Cityscape.MOV - views of quieter streets while driving through the region.

Appendix 2: Airport.mov - a bustling airport scene during a group conflict that arose in the wake of a canceled flight to Philadelphia.