MEXICO CITY – Credit-rating agency Moody’s said on Wednesday that the huge clumps of seaweed washing ashore in Mexico’s Caribbean region could harm hotels and other businesses in the southeastern state of Quintana Roo, taking a toll on tourism industry revenues.
Moody’s said in a report that seaweed represented both an immediate and long-term problem for Mexico’s tourism industry.
Luxury hotel operator Playa Hotels & Resorts, Cancun International Airport and toll road Autovia del Mayab are likely to be affected, the credit rating agency said.
The seaweed crisis could affect the cash flow and profitability of both Playa Hotels & Resorts and Grupo Posadas.
Properties in Quintana Roo account for 34 percent of the rooms belonging to Playa Hotels & Resorts and some 53 percent of the company’s earnings before interest, tax, depreciation and amortization (EBITDA).
Moody’s said a drop in hotel occupancy rates could lead to a decrease in bed tax revenues for Quintana Roo state.
A drop in tax revenues could make the situation worse, forcing officials to cut the already small budget for removing seaweed from beaches.
The credit rating agency said a drop in hotel tax revenues in Quintana Roo could lead to larger than projected deficits.
Moody’s said passenger arrivals at Cancun International Airport fell 1.8 percent in the January-April period, compared to the same period in 2018.
Cancun International Airport is the No. 2 air terminal in Mexico, handling 16.4 million passengers in 2018 and trailing only the Mexico City International Airport, which registered 17.2 million arrivals last year.
The Autovia del Mayab, which links Cancun to Merida, saw revenues rise just 6.4 percent in the January-April period, compared to the same period in 2018, an increase that was lower than usual for this time of year, when the area welcomes thousands of US university students on spring break.
Cancun has approximately 22 kilometers (13.5 miles) of lovely white-sand beaches along Mexico’s Caribbean coast.
In recent weeks, seaweed has been washing ashore in Quintana Roo – including on the Riviera Maya and Tulum – but changes in the climate and ocean currents have now started bringing it to Cancun’s beaches.
Experts at the Cancun Seaweed Monitoring Network, an organization formed by meteorologists, marine biologists and other scientists, say that the amount of seaweed will increase in the coming weeks.
Weather conditions favoring the formation of hurricanes in the Atlantic also send huge islands of seaweed drifting on their way from the Caribbean Sea toward the Yucatan Peninsula, where Cancun is located.