Acapulco hard hit
Mexico has its own answer to America's Black Friday, and it's less than 24 hours away.
El Buen Fin ("the good (week) end") begins tomorrow and will extend through early next week. Like U.S. merchants, this country's retailers hope to pocket some pesos as they oficially kick off the Christmas season.
But continuing national unrest over the disappearance and presumed brutal execution of 43 college students on Sept. 26 is cause for concern. Marches and at times violent public demonstrations relentlessly rock many communities, putting local security forces to the test and often precipitating huge commercial losses for vendors.
El Buen Fin was launched in 2011, with enthusiastic support from the previous National Action Party administration of president Felipe Calderón. And while gross sale figures have risen in the absolute sense every year, they have done so at a noticeably declining rate. Three years ago a national merchants' alliance with almost 35,000 members reported that gross sales increased over 22% on the weekend it debuted. In 2012 that increase dropped to only 12.5%. Last year it was just over 8%.
Department stores and mega-retailers like Wal-Mart have been the primary beneficiaries, according to the trade group, with clothing, shoes, household merchandise, computers, electronics and high tech items the most popular items.
Weak internal consumption coupled with chronic domestic insecurity has been frequently cited by economic experts at home and abroad as a primary reason that Mexico's gross domestic product growth continues to lag far below expectations. Wal-Mart sales in free fall a good barometer of a Mexican economy on the skids (Oct. 8, 2013).
The Institutional Revolutionary Party administration of president Enrique Peña Nieto, which will begin its third year in office on Dec. 1, has so far failed to achieve annual GDP growth of more than 1.1%. The government's official line is that the national economy will grow about 2.7% this year, a number disputed by many private consultants and Mexico's independent central bank, Banixco.
Acapulco innkeepers are losing up to a million pesos a day as a result of continuing unrest in the Pacific coast state of Guerrero, a Mexican trade group reported Tuesday.
At today's open market exchange rate, that represents over a half million dollars weekly.
The Employers Confederation of the Mexican Republic (Coparmex) said hotel occupancy during Day of the Dead festivities 10 days ago averaged only 35%.
A Coparmex official warned of much broader consequences, claiming that up to 80,000 jobs throughout the southwestern state could be in jeopardy, further compounding problems for a challenged Mexican national economy.
"We have businesses here which may be forced to shut down," noted Joaquín Badillo, who said continuing disturbances threatened to draw in and swamp many sectors of local commerce, including hostelries, restaurants, transportation and purveyors of goods.
An official with the Acapulco Hotel and Tourist Association said this week that the unpredictability of the situation was the greatest worry for cash hungry merchants.
"We have a situation never before seen in Acapulco. Today, for example, our lodging reservations were at 75%, but for Wednesday they're only 45%. We have at least 14,000 unrented rooms."
Another trade group spokesman complained there are not enough police in the city, causing "high levels of insecurity" in many neighborhoods. "Twelve to 15 assaults a day are common," she noted.
But other business leaders contend the city's ceaseless protest marches, which worry both domestic and international travelers, are more to blame. Acapulco's International Airport was a staging ground for tense demonstrations on Monday, which resulted in some flight cancellations.
City fathers, including beleaguered Acapulco mayor Luis Walton who 18 months ago reported that the municipal government was broke, have appealed to demonstrators for a cessation of such activities. "The truth is, we all depend on tourism for our survival," he said. A bankrupt Acapulco can't meet its payroll (Apr. 26, 2013).
In the Guerrero state capital of Chilpancingo, where radical student groups and dissident teachers have long engaged in street violence and the sacking of local businesses, commercial losses have reached 80% in recent weeks. Guerrero on verge of civil meltdown, as teachers riot. Yesterday a powerful teachers' union joined the fray, which included the burning of public buildings.
Aug. 13, 2014 - Mexican economy remains stuck on a southbound train
Nov. 16, 2104 - Acapulco economy "devastated" by student protesters and teachers' union
Nov. 25 - Acapulco, in economic ruins (El Informador)
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