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Reuters - Fears of drug violence spreading to beaches and colonial towns are driving away tourists and threatening Mexico's crucial tourism industry, already battered by last year's swine flu outbreak.

Gory news reports of daily shootouts between drug cartel hitmen are fueling concerns among North Americans and Europeans that Mexico is increasingly unsafe, even if most of the violence is along the U.S. border, far from top tourist areas.

The number of international tourists flying into the Pacific beach resort of Acapulco, where rival hitmen have fought brazen gun battles in recent months, fell by almost a quarter in the first three months of this year, airport operator OMA said.

International arrivals to the popular Caribbean resort of Cancun fell 4 percent in the same period, according to airport operator Asur. They are peak months in Cancun as many tourists escape from winter at home, and U.S. students traditionally flood Mexico on their "spring break."

Almost 20,000 people have died in the fight between cartels and Mexican security forces. Violence has worsened dramatically since the start of the year, with 1,000 deaths across Mexico in March, the bloodiest month since President Felipe Calderon launched his crackdown on drug gangs in late 2006.

Mexico's tourism industry is still likely to grow in 2010 compared to last year, when fears of swine flu emptied beaches, but businesses worry a perception of danger hangs over Mexico that could continue to undermine the industry.

"The fall in foreign tourists in Cancun is certainly noticeable. Mexico's bad image abroad means tourists, mostly the Americans, are not coming as much," said Roberto Diaz, a leader of Cancun's pleasure boat captains that ferry fishermen, divers and snorkelers to nearby islands in the Caribbean.

So far this year, 24-hour beach parties and wet T-shirt contests in Cancun have been toned down and its all-day bars such as Mango Tango and Coco Bongo are more subdued. "I'm afraid to go out at night and we prefer to stay in the hotel," said 42-year-old tourist Ralph O'Donnell from North Carolina.

The U.S. State Department has warned against non-essential travel along the U.S.-Mexico border, especially in the violent cities of Ciudad Juarez and in Tijuana, where hotel occupancy rates have dropped to around 30 percent.

Americans who used to come for the border night life, cheap tequila and prescription medicines are staying away.

The University of Texas at Austin also recalled its students studying in the northern manufacturing city of Monterrey, where drug violence and violent crime are rampant.

"This isn't a crisis, but it is a red flag," said Rodrigo Echagaray, an analyst at Scotia Capital in Mexico City. "It's possible we won't have the significant growth we hoped for."

CRIMPING RECOVERY

Many business people blame news media for exaggerating the extent of drug murders, which are mainly between gang members and corrupt police. Mexico's beaches, Mayan ruins and colonial-era churches are far from the conflict, they say.

"We are not seeing here the confrontations like in the cities in the north of the country and the border," said Rodrigo de la Pena Segura, head of Cancun's hotel association.

But the killing of three people linked to the U.S. consulate in Ciudad Juarez last month provoked outrage from U.S. President Barack Obama and put new pressure on Mexico.
Shootings between hitmen and police have also increased this year in the Pacific beach resort of Mazatlan.

"Perception is everything when it comes to leisure travel," said Rick Seaney, chief executive of airline price comparison website FareCompare.com. Seaney said other countries have been able to raise prices on flights following the recession but airlines are still offering cut rate deals to Mexico.

With more than 20 million visitors a year, Mexico is one of the world's top destinations and tourism makes up 8 percent of Mexico's economy. Spending by tourists in Mexico fell 15 percent in 2009, hit by swine flu and the global recession.

Now the government is banking on a rebound, but forums on travel websites are filled with queries from prospective tourists frightened by the drug war. Many cite false claims, like a post that said "a tourist was being killed every day."

The most common crime suffered by tourists in Mexico is robbery, while deaths are more likely to be attributed to a heart attack, drowning or falls from balconies.




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