The Russians Discover Latin America

MEXICO CITY – Armina Wolpert always saw the potential of Mexico as a tourist destination for Russians despite the lack of direct flights and long distances between Moscow and Mexico City – nine time zones, to be precise. But distance was just the beginning of her challenges in tapping a burgeoning market for potential tourists.

The Cancun-based tour operator saw few results in the early years, but she continued promoting Mexico at tourism fairs and among travel wholesalers, sensing that Russians, unable to travel freely during the decades of communist rule, were eager to see the wider world.

Wolpert encountered difficulties along the way: the Sept. 11, 2001 terror attacks, to name one. The tepid response from Mexican tourism officials was another. In 2006, just 1,600 Russians visited Mexico annually, according to the Tourism Secretariat, or Sectur.

Then violence related to organized crime and drugs erupted in some parts of Mexico – generating gory and sensational headlines. The 2009 H1N1 viral outbreak made matters worse, along with a world economic downturn that hit both the United States and Mexico especially hard.

The diligence paid off, though – and handsomely. Russians now flock to Mexico in record numbers. Their presence is noticeable in Cancun and the Maya Riviera by the job advertisements soliciting Russian-speaking employees, the Russian-language classes offered to tourism industry workers and the arrival of regularly scheduled flights at the Cancun airport by Russian carriers Aeroflot and Transaero.

“It’s just been crazy,” Wolpert says of the volume of business Armina’s Travel has handled during this most recent high season.

The Russian tourists arriving in Mexico form part of a new boom in foreign tourism to Mexico by visitors hailing from countries with emerging economies, and they include Brazil, Peru and Colombia. The boom comes as the United States sputters as a source of tourists, making a diversification of countries of origin ever more important for Mexican tourism officials.

They have set a goal of more than doubling the number of tourism visits to the country, from 22 million last year to 50 million by 2018. Tourism from countries such as Russia is important for reaching that goal, along with offsetting any decline in the U.S. market.

“We want to continue being a preferred destination for Canadians and Americans, but we also want to depend less on one single market,” says Ricardo Anaya, undersecretary for tourism planning at Sectur in Mexico City, the government dependency responsible for fomenting activity in an industry representing 9 percent of the country’s GDP. “We want to open up to the whole world.”

Mexico is opening to more than just Russians these days – although the numbers arriving from Russia are impressive. Sectur says 54,000 Russians visited Mexico in 2010, with the number jumping 55 percent in 2011. The visits from Brazil surged, too – 66 percent last year, driven by a strong currency and an easing of Mexican visa restrictions. The number of Peruvians and Colombians visiting Mexico last year grew by 37 percent and 22 percent, respectively, and the number of Canadians flying south for vacations increased by 7 percent.

These tourists are making up for a decline in the U.S. market, where the overall number of people taking foreign trips has declined in recent years, even though Anaya says Mexico is expanding its share of a shrinking market.

An increased awareness among U.S. tourists that destinations such as Cancun and its environs – which include the state of Yucatan, where the low murder rate is on par with Canada’s – are far from the violence of Ciudad Juarez helps, too. Still, tourist visits by people arriving by air increased just 2 percent in 2011, and number of cruise-ship dockings dropped about 15 percent. “We believe that a breach exists between the reality and the perception,” Anaya says.

Wolpert doesn’t encounter those kinds of image problems in Russia. Most Russian tourists consider Mexico “exotic” and thus attractive, and stories of violence have failed to scare them off – especially since the problems in Mexico seem less serious in comparison to the massive floods in Thailand last year and the revolutions sweeping the Middle East, Wolpert says, referring to popular destinations for Russian tourists. Russians also show skepticism toward what is reported in the news.

“When the U.S. market says, ‘It’s dangerous,’ the Russians will say, ‘What’s dangerous for a gringo is okay for us,’ ” Wolpert says. “This is a great advantage.”

She recalls never being asked about security in Mexico while giving seminars in Russia – at a time when her colleagues working the U.S. market were bombarded with such queries.

How Mexico arrived on the Russian tourism map remains uncertain, but Wolpert and others in the industry credit an aggressive push from the Mexican government, including trips to Russia by Tourism Secretary Gloria Guevara. The Mexican government helped things even more by simplifying visa applications and changing the rules in 2010 to allow anyone with a U.S. visa entry into Mexico. Mexican tourist visas can be obtained online and in mere minutes, Wolpert says.

Russians visit destinations beyond Cancun. The Four Seasons Mexico City has welcomed a growing number of Russian leisure travelers – who, sales and marketing manager Patricia Ortiz says, come looking for the most expensive accommodations and requesting amenities such as exclusive menus and fine dining.

“I wish we had even more Russian visitors,” she says.

DIFFERENT KIND OF TOURIST?
In many ways, the Russians, along with Brazilians and others from emerging markets, make attractive tourists. For one thing, they stay longer: 11 days on average, compared with the five days an American or Canadian tourist spends in Mexico, says Jesus Almaguer, president of the Cancun Convention and Visitors Bureau. Russians spend more, too: $1,000 daily, more than double the amount spent by an American tourist.  “They like to spend,” says Almaguer, adding that Russians will buy everything from mariachi sombreros to jewelry.

The Russian visitor is tough to stereotype, however. Cancun resident and Canadian expatriate Kelly McLaughlin says Russians like to stray off the beaten path, and she finds them at unlikely spots, such as roadside taco stands.

Many prefer high style, though. Wolpert says her clients will take SUVs to places such as Chichen Itza with a guide and spend $1,000 for the excursion. Trips to Mexico now can cost the same as a jaunt to Europe, but many Russians come with plenty of cash and can be demanding – something noticed by hoteliers in the region.

“It is, along with Brazil, the most poignant emerging market,” says Sergio Serra, sales manager at the Ritz Carlton Cancun.

Serra noticed a trickle of Russians coming to the luxury hotel late in the last decade. That exploded after the visa rules changed in 2010.

“That was really the catalyst that triggered all of this,” he says, adding that, since 2008, the percentage of American guests at the hotel has declined from 80 to 85 percent of the clientele to 75 today.

With a little more work, that number will be lower in coming years. Wolpert already is working to make sure it happens. She is now working in Ukraine to promote Mexico – and having success, she says. She has another potential gold mine lined up, too: Kazakhstan.

“Kazakhstan has a lot of potential,” Wolpert says.  “Give me a year. There will be plenty of people coming from Kazakhstan.”  

editorial@latintrade.com