Cancún reels as swine flu fears wreck tourist trade

Hotels in Mexico's coastal resort of Cancún, one of the world's most popular getaways, are adopting extreme measures as holidaymakers scramble to cancel bookings in the wake of the swine flu scare.

Visitors to one hotel, The Royal, are being offered a "flu-free guarantee": anyone who contracts the flu virus within 14 days of checking out gets three free annual holidays.

Discounts abound elsewhere in Cancún, where Bestday, a Mexican-based internet broker, says four in five of the 31,000 hotel rooms it monitors in the city - and in the Riviera Maya coast to the south - are empty. The figure was one in five before the outbreak.

"I've been in this business 26 years and I have never seen anything like it," said Fernando García, owner of four local hotels.

Mr García says that at least 17 hotels have been forced to close in Cancún and the surrounding area, and the city is losing an average of $6m a day.

Fifteen restaurants have closed in Cancún and the Riviera Maya, according to Manuel García Jurado, who owns three restaurants and is a high-ranking member of Canirac, Mexico's national restaurant association. Unless things change quickly, he predicts dozens more could join them.

This is in spite of the fact that the state of Quintana Roo, where Cancún is located, has suffered only mildly from swine flu. There have been only 11 confirmed cases of infection so far.

The Mexican government said this week that the worst of the virus, which has claimed at least 66 lives and infected more than 2,800 people in the country, was over.

The negative publicity that Mexico has received over the past few weeks has had devastating consequences for a region that, under normal circumstances, attracts 3m foreign tourists a year and relies on tourism to generate 90 per cent of all economic activity.

At the Coral Beach jet-ski rental towards the northern end of Cancún's famous hotel strip, the situation is becoming desperate.

A month ago, the business employed 14 people who sold between 30 and 40 half-hour rides a day at $60 each. In the last two weeks, however, trade has dropped to about four or five rides a day and staffing has been cut to eight and there is still not enough work to go around.

"It's dead," says Julio, the manager.

"We would offer discounts," he adds, "but there is nobody to offer them to."

In Tulúm, a relatively low-key resort of eco-chic beach huts and palm-roofed restaurants two hours south of Cancún, Miguel Navarro is struggling. The price of the amber, turquoise and quartz necklaces dangling from his arm has fallen by 50 per cent, and he still has plenty left.

"I've made more sales in hurricane season than I have this month," says the bronzed and bearded Mexican artisan as he walks off down the deserted beach.