NAFTA Looks Promising To US Service Industries

THE United States hotel and travel industries find very little to complain about when it comes to the North American Free Trade Agreeement.

NAFTA will provide significant investment opportunities for US hoteliers in Mexico and increase room demand in this country, according to a quarterly research journal put out by New York-based Coopers & Lybrand.

``We've begun to see a number of US lodging companies become actively involved in Mexico,'' says Mark Woodworth, chairman of the National Hospitality Industry Consulting Group for Coopers & Lybrand. ``NAFTA also has removed barriers to service providers, including management companies and manufacturers of everything from soap to furniture and fixtures.''

The company estimates that NAFTA's stimulative effect on the Mexican economy should increase the number of Mexican travelers to the US by about 5 percent a year. That translates into an increased US demand averaging 1,900 rooms daily between 1994 and 1996, creating $80.4 million more in room receipts over the next three years.

The border states of Arizona, California, New Mexico, and Texas will benefit the most from the anticipated increase in travel, Mr. Woodworth predicts. ``Because of proximity and availability of tourist destinations, Texas and California will take the lion's share in the US,'' he says.

NAFTA also will encourage more Mexican hotel development, Woodworth says. ``In fact, the new-hotel demand in Mexico as a result of NAFTA will significantly outpace the lodging benefit here in the US,'' he says. ``But because most people have focused on the benefits [of the trade agreement] on Mexico, we wanted to take a closer look at what the US [hotel and travel industries] could expect to see.''

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