Mexico's Acapulco Hopes for Rebound as Virus, Violence Drop

Members of Mexico's National Guard keep watch during the reopening of the beaches and hotels after confinement measures were eased this week, in Acapulco, Mexico July 2, 2020. (Reuters)
Members of Mexico's National Guard keep watch during the reopening of the beaches and hotels after confinement measures were eased this week, in Acapulco, Mexico July 2, 2020. (Reuters)
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Mexico's Acapulco Hopes for Rebound as Virus, Violence Drop

Members of Mexico's National Guard keep watch during the reopening of the beaches and hotels after confinement measures were eased this week, in Acapulco, Mexico July 2, 2020. (Reuters)
Members of Mexico's National Guard keep watch during the reopening of the beaches and hotels after confinement measures were eased this week, in Acapulco, Mexico July 2, 2020. (Reuters)

Mexico’s Pacific coast resort of Acapulco is putting its hopes on a return of tourists as the number of coronavirus cases drops and the violence that drove travelers away slowly declines.

The governor of the state of Guerrero said Friday that hotels will now be allowed to accept guests at 40% capacity, up from 30% previously under pandemic restrictions. Gov. Hector Astudillo bragged that Acapulco has reduced the number of COVID-19 deaths to an average of 9.6 per day and alleviated the overcrowding that plagued the city's hospitals earlier in the pandemic.

The city, once ranked as the fifth most deadly in Mexico, has fallen to 44th place. Homicides were down about 20% in the first half of 2020, compared to the same period of 2019.

President Andrés Manuel López Obrador visited the once-glamorous resort Friday and pledged to fix pollution problems that affect the resort’s famous bay.

“We are going to clean up Acapulco, we are going to clean up the bay so that there is no more pollution. That is my commitment,” he said. In June, heavy rains caused storm drains to overflow, sending sewage and waste into the bay.

Unlike most experts, López Obrador predicted a quick end to the pandemic.

“What I feel — my prediction — is that soon, very soon, we will return to normality,” the president said. “Economic activity is returning, tourism is returning to Acapulco, but I predict that in a month, two months, we will have very favorable conditions.”

Even if those predictions are fulfilled, it will still be a long road back for Mexico’s battered tourism industry. In the first quarter, tourism revenues were down 51.5% and figures for the second quarter are certain to be worse.

With about 800,000 hotel rooms, Mexico's has the world's seventh-largest hotel infrastructure. In 2018, tourism accounted for 8.7% of Mexico's GDP and provided about 2.3 million jobs.

Many of those jobs have evaporated in the pandemic. Even under the best-case scenario, if travel alerts were lifted — Mexico currently has the highest “do not travel” alert from the US State Department — hotels in Mexico would end the year with only about 47% occupancy, on average.



Saudi Business and Job Growth Hit 14-Year High

Riyadh, Saudi Arabia (AFP)
Riyadh, Saudi Arabia (AFP)
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Saudi Business and Job Growth Hit 14-Year High

Riyadh, Saudi Arabia (AFP)
Riyadh, Saudi Arabia (AFP)

Business conditions in Saudi Arabia’s non-oil private sector improved notably in June, driven by a marked rise in customer demand and expanded production, according to the latest Riyad Bank Purchasing Managers’ Index (PMI) data.

New business volumes surged, fueling the fastest pace of employment growth since May 2011. This strong demand for workers pushed wage costs to record highs, adding pressure on overall expenses and contributing to a fresh increase in output prices.

The headline PMI climbed to 57.2 in June from 55.8 in May - its highest level in three months and slightly above the long-term average of 56.9. The reading signaled a robust improvement in the health of the non-oil private sector economy.

Companies reported another rise in new orders last month, with growth accelerating following a recent low in April. Many firms cited gaining new clients, alongside improved marketing efforts and stronger demand conditions. Domestic sales were the main driver of the increase, while export sales edged up slightly.

Purchasing Activity Expands

Production continued to expand through the end of Q2, although growth slowed to a 10-month low. Purchasing activity picked up sharply as companies sought to secure additional inputs to meet rising demand, with the pace of purchase growth reaching its fastest in two years.

Employment growth accelerated as businesses rapidly expanded their workforce to keep pace with incoming orders, pushing hiring to the highest level since mid-2011. This strong recruitment trend, which began early in 2025, was largely driven by a rising need for skilled workers, prompting companies to increase salary offers. Consequently, overall wage costs rose at the fastest rate since the PMI survey started in 2009.

Facing mounting cost pressures from higher raw material prices, firms raised their selling prices sharply in June , the biggest increase since late 2023, reversing declines recorded in two of the previous three months. This price hike largely reflected the passing of higher operating costs onto customers, although some companies opted for competitive pricing strategies by cutting prices.

Resilient Economic Outlook

Looking ahead, non-oil private sector firms remained confident about business activity over the next 12 months. Optimism hit a two-year high, supported by resilient domestic economic conditions, strong demand, and improved sales. Supply-side conditions also showed positive momentum, with another strong improvement in supplier performance.

Dr. Naif Alghaith, Chief Economist at Riyad Bank, said: “Future expectations among non-oil companies remain very positive. Business confidence reached its highest level in two years, underpinned by strong order inflows and improving local economic conditions.”

He added: “However, cost pressures became more pronounced in June, with wage growth hitting record levels as companies compete to retain talent. Purchasing prices also rose at the fastest pace since February, partly driven by increased demand and geopolitical risks. Despite these challenges, companies broadly raised selling prices to recover from May’s declines, reflecting an improved ability to pass higher costs onto customers.”