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Local economy underwhelmed by Pan Am impact

November 7, 2011

After all the hype and lofty expectations, the Pan American Games has not given local businesses the large economic boost that many had been hoping for.

Restaurants, bars, clubs, taxis and tourist agencies in Guadalajara and nearby host sites such as Puerto Vallarta all received fewer customers than they had anticipated.

“Economically it is not what the state and federal governments expected,” said Ramon Godinez Ortiz, from the Department of Tourism at the University of Guadalajara’s Center for Economic and Administrative Sciences (CUCEA).

Very few foreign tourists came for the games, while most spectators at the events were local citizens, athletes and their families, journalists and other games-affiliated personnel. While Guadalajara did register an increase in the number of tourists, the city still received fewer visitors than at Easter.

The Jalisco Department of Tourism (Setujal) revealed that from October 14-25 the number of hotel rooms in use increased 15.4 percent from the same period last year.

Although the occupation rate in Guadalajara’s five-star hotels was 97 percent, on average the city’s hotels were just 75.9 percent full, considerably less than the predictions of 95 percent made before the games.

Other destinations in Jalisco saw little difference whatsoever during the games. Hotels in Tlaquepaque remained around 70 percent full, no more than average for this time of year.

“This October was like any other October,” said Margarita Ortiz, president of the Mexican Employers’ Association (Coparmex) in Puerto Vallarta. Despite hosting several events throughout the games, Vallarta saw no significant influx of money, leaving local traders angry at the lack of publicity for the destination.

Meanwhile travel agencies in Guadalajara received around 30 percent less business than they had hoped for during the games.

Guadalajara taxi drivers were left dismayed by the lack of customers and angered after having taken time-consuming training courses offered by the Department of Tourism, which brought them no obvious benefits. “We’ve only had a little more business than usual, maybe ten percent more,” one local taxi driver told the Reporter. “There’s been a lot less visitors than we expected. Besides, most of (the visitors) travel to the venues in special buses.”

Almost all the athletes and their families, members of the press and logistical personnel were transported to the venues in Pan American buses, leaving little extra work for local taxi drivers.

Owners of bars, clubs and restaurants also said they did not meet anticipated sales targets during the games. They had expected a rise of around 50 percent, but most only reached about a 20 percent increase.

Some of those bars situated by the Fan Fest on Avenida Chapultepec – which was intended to be the social focal point of the games – actually lost business because regular visitors stopped coming due to nearby road closures.

German Figueroa, Guadalajara’s director of tourism, said the sector is satisfied with the benefits the games have bought, despite the first half of the games bringing in only one-third of the one-billion-peso target set by Setujal.

A modest upturn in sales was not enough to satisfy local industry and business leaders. Juan Carlos Anguiano, the president of the National Chamber of Commerce’s delegation in the historic city center, noted that the 591 establishments in this area saw sales increase between 5 to 8 percent compared with the same time period last year, far below the anticipated 25 percent rise.

All is not doom and gloom, however, with new hotels, sports venues, repaved roads and beautification projects having helped modernize and improve the city’s image.

In the last two years the local economy has been injected with over three billion pesos of public investment, plus “more than ten billion in private investment that has generated more than 50,000 jobs, about 20,000 of which are permanent positions in new hotels and restaurants,” said Alonso Ulloa Velez, Jalisco’s secretary for economic development.

Citing the recent construction of over a dozen new hotels in Guadalajara, the expansion of Expo Guadalajara, the growth of the airport and the renovation of many parts of the city, Ulloa remains confident that the state will reap 1.3 billion dollars from holding the games, the figure projected by Mexico City’s Universidad Iberoamericana.

Perhaps the most notable legacy of the games is the sports infrastructure that Guadalajara will now be left with. The city has already begun to see some return on its investment with the new Aquatics Center having won a late bid to host the 2017 World Swimming Championships.

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