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A frigid U.S. winter is creating a record tourism season in Mexico as travelers enriched by savings from cheap gas and stronger dollars seek warmer climes.
Among the top beneficiaries of the winter migration are airlines Volaris and Grupo Aeromexico SAB, the first and fifth best stock performers respectively among more than 100 large companies trading in Mexico as of March 6. Airport operators listed on the IPC stock index are also beating that gauge in 2015.
This season is shaping up to be the most robust for Mexico tourism, the country’s fourth-largest source of foreign cash and a bright spot in an economy dragged down by low oil prices and production. December revenue from tourists was the highest for any Christmas season, according to central bank data, and foreign visits in January rose from last year’s highs with a boost from U.S. travelers.
“I’m looking forward to not putting on 12 layers before I go outside,” said Morgan Thompson, 25, a marketing and communications manager at a furniture company in New York, who recently booked an Aeromexico flight to a beach town in Mexico. “I’ve never seen so much snow in my life.”
Last month was the coldest February on record at New York’s John F. Kennedy International Airport, and Chicago tied its coldest February ever, the National Weather Service said. Boston had its sixth-snowiest January, followed by its snowiest and second-coldest February.
The weather triggered an exodus south. In January, foreign visits to Mexico rose 8.9 percent from a year earlier, according to the National Immigration Institute in Mexico City. It was the biggest month for international visitors of any January since 2007, according to the Interior Ministry. Travel from the U.S. alone increased 11 percent in the same month.
“The weather in the north has been more extreme than in the past years,” said Jose Maria Flores, an analyst at Casa de Bolsa Ve Por Mas SA in Mexico City. “That propels people to travel more during this time of year and they’re inclined to seek out the heat of Mexico’s beaches.”
Volaris, whose only foreign flights are to and from the U.S., saw international traffic rise 18 percent in February, more than the 17 percent it grew a year earlier.
Aeromexico’s international passenger traffic rose 13 percent in February. The carrier flies direct from New York to Cancun and offers flights from Boston and Chicago to Cancun, Cabo San Lucas and Puerto Vallarta. Volaris flies from Chicago and Portland to Cancun and Mexico City.
“Of course” the severe winter is helping attract tourists, Aeromexico Chief Executive Officer Andres Conesa said in an interview last week. And with the peso’s 13 percent decline since November to near 15 per dollar “it makes more sense to travel to Mexico.”
Volaris has risen 27 percent this year and Aeromexico gained 21 percent. The Mexican benchmark IPC index is virtually unchanged in that period.
Volaris CEO Enrique Beltranena said it was difficult to determine if weather was helping the airline.
In February, passenger traffic from abroad rose more than 10 percent at Grupo Aeroportuario del Centro Norte and Grupo Aeroportuario del Sureste, which serve resort destinations including Acapulco and Cancun. Grupo Aeroportuario del Pacifico, which serves Pacific beach destinations, reported international traffic rose 6 percent in January, the latest period for which statistics are available.
None of the airport operators returned requests for comment. According to its website, Aeroportuario del Sureste had the highest international traffic in both January and February that those months have ever recorded since 2000.
“Weather in the U.S. could be a relevant factor that along with the strength of the dollar is making Mexico a more attractive tourist destination,” said Javier Romo, an analyst at Signum Research, who has a hold recommendation on Aeromexico.
Plunging oil prices may also help frozen northerners pay for their escape from the cold. Crude prices have fallen about 50 percent since June, reducing costs at the gas pump and for some fares.
“I missed two weeks of hell and now I’m back again,” Alex Nunez, an artist from Manhattan, said in a telephone interview after her recent trip to Mexico City. “I was planning on going to a wedding and wasn’t sure. Then the price dropped so much that I had to get the ticket, and the weather really helped” clinch the decision.
Severe weather is usually more of a hindrance to travel than a help: Blizzards have delayed thousands of flights across the U.S. the past two winters. Some travelers are avoiding travel to northern cities now, Aeromexico’s Conesa said.
That hasn’t stopped bookings to Mexico as winter weather lingers into March, Emma Jupp, president of Liberty Travel, based in Ramsey, New Jersey, said by e-mail. Bookings have risen 14 percent so far this year compared with the same time in 2014, she said.
“With the back-to-back storms, there has been an uptick in both inquiries and bookings to warm weather destinations, namely the Caribbean and Mexico,” Jupp said, referring to three storms that slammed the New York City area in four days last week. “There is a consensus that it’s time to trade snow boots for sandals.”
–With assistance from Katherine Chiglinsky in New York and Ben Bain in Mexico City.
This article was written by Nacha Cattan from Bloomberg and was legally licensed through the NewsCred publisher network.