Mexico City — Potential opportunities offered by nearshoring have reactivated the arrival of foreign business travelers to Mexico who are visit the country for the purpose of exploring business opportunities, however, visitor arrivals remain below the pre-pandemic level.
Almost half a million business travelers visited Mexico in 2022 to trade goods or provide services, establish or manage foreign capital, attend assemblies or board meetings of companies established in the country.
Between January and November of last year, 463,508 business travelers entered Mexico, according to statistics from the Migration Policy Unit of the Interior Ministry, a 107% increase over the entire year of 2021, when the economy reopened following the pandemic, but barely half the number compared to the number of business travelers who entered the country in 2019.
In January 2022, 20,559 business travelers entered Mexico, but as the year progressed and news about the relocation of companies from Asia to Mexico began to proliferate, the arrival of foreign business travelers increased, and by November of last year the number of travelers had risen to almost 58,000 during the month.
Mexico City, Monterrey, Cancún, Querétaro and Guadalajara are the cities that registered the highest number of business traveler arrivals to November 2022.
For example, Mexico City International Airport recorded 238,715 arrivals of business travelers, a 118% increase compared to 2021, but which was just 49% of the number of visitors arriving at the nation’s capital in 2019, the year prior to the pandemic.
Business travel recovery
The country’s central bank (Banxico) published a report on regional economies as of the third quarter of 2022, in which it reports on business tourism in Mexico’s regions based on data from Google Trends and invoicing, and which shows that, in 2022, six cities in the country saw higher numbers of visitors and expenditure than prior to the health crisis.
The first four cities are Chihuahua and Ciudad Juárez, Tijuana and Hermosillo, all of which are located in the country’s northern region and are characterized by their export orientation, specializing in manufacturing and production, and which are among the cities that are benefiting the most from nearshoring.
Celaya, in central Guanajuato state, and the city of Guadalajara are two other cities identified by Banxico as benefiting from nearshoring, and which specialize in the food and beverage industry, and which were subsectors that were less affected by the pandemic.
Alejandrina Salcedo, Banxico’s chief economist, said in December 2022 that business tourism had a steeper drop than tourism in general and now, although business tourism has shown a recovery, it has not yet returned to pre-pandemic levels.
“In the border cities there is a greater recovery, and we can associate this with business tourism and what is happening in the northern region, where there is manufacturing and where there are cities that have benefited from relocation.”
Alejandrina Salcedo, Banxico's chief economist
President Andrés Manuel López Obrador announced that BMW will install a plant in San Luis Potosí state, while Elon Musk’s Tesla may also announce an investment for a plant in the northern state of Nuevo León.
AMLO, as the president is known, has touted the Sonora Plan to trade partners in the United States and Canada as a commitment to clean energy and the installation of plants relocated to Mexico from Asia.
Foreign direct investment (FDI) in Mexico during the first nine months of 2022 set a record as companies began relocating to take advantage of nearshoring with easier access to the US market.
Mexico saw FDI totaling $32.14 billion from January to September 2022, 29.5% more than the preliminary figure for the same period in 2021, of $24.83 billion.
By country of origin, 39.1% of the investment flow observed to September came from the United States, followed by Canada with 9.5%, Spain with 7.1%, Argentina with 4.9% and Japan with 3.9%.
In other words, 48.6% of the total FDI received as of September, equivalent to $15.62 billion, came from North America, under the Mexico-United States-Canada free trade agreement (USMCA).
According to Mexico’s Economy Minister Raquel Buenrostro, more than 400 North American companies intend to relocate from Asia to Mexico; however, these industries require guarantees in energy matters in order to set up shop in the country.