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Mexico tourism braces for swine flu slowdown

European travel warnings and canceled trips likely to hit Mexico's $13 billion a year industry.

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But the bigger concern is a projected decline in international tourist dollars.

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Travel advisories

European Union Health Commissioner Androulla Vissiliou said Monday that Europeans should delay travels to the US and Mexico unless it is "urgent."

His advisory is only a recommendation; each nation in Europe decides what advisories to set, and none so far has followed suit.

The Associated Press reported that Germany's largest tour operator, the Hannover-based TUI, suspended all charter flights to Mexico City through May 4. And Japan's largest tour agency, JTB Corp., suspended tours to Mexico at least through June 30.

While any reduction hurts, the US is Mexico's key market: 80 percent of its tourists come from America, according to the government's tourist department.

Richard Besser, acting head of the US Centers for Disease Control and Prevention (CDC), said the EU recommendation to avoid travel to the US was not warranted. But Dr. Besser said that the CDC is preparing a travel advisory to be released later Monday instructing Americans to avoid nonessential travel to Mexico.

While 149 deaths are believed to be related to the swine flu in Mexico, cases in other parts of the world have been milder.

"We understand countries are setting up precautions, but they are not saying 'Do not come here,'" says Noe Elizarraras Rios, president of the Mexican Association of Travel Agencies. "As of now we are open for tourism."

Trade stalled, schools closed

The reaction – and economic penalties – abroad goes beyond tourism. China and Russia both banned pork products from Mexico – Indonesia banned imports of pork overall – and from the US states that have reported cases of the flu.

Mexico announced today that schools across the country will be cancelled until May 6 – an expansion of a ban that was already in place in the capital and some Mexican states.

Government offices were not closed Monday, but Mexico Finance Minister Agustin Carstens warned of a high potential for disruption. "It's hard to say at this stage how deep and how wide and how long this episode will be," Mr. Carstens told reporters.

Eugenio Aleman, a senior economist at Wells Fargo Economics, said in an analysis sent to clients that if the situation does not rapidly deteriorate, the impact on the economy could improve by the summer.

"Of course, the Mexican tourism sector is going to be one of the most affected sectors in the country and this is going to add to the pressures on the economy," he wrote. But he sees a bright spot. "Some of the late developments in tourism into Mexico are not of the 'popular' type. This means that tourists are going to isolated places where the contact with local population centers is limited. Thus, we may not see much of an added impact for this particular, high-end tourism."

* Wire services were used in this report.