Impacts of tourism and the generation of employment in Mexico

Introduction

The rapid advance of tourism and its potential for growth has accelerated even further in recent years, particularly in developing countries, as is the case with Mexico. Tourism activities, in the widest sense of the term, are considered a key variable in local, regional, national and international economic growth, due to the fact that they are based on foreign currency income, as well as generating employment and creating services and related activities.

According to the United Nations’ World Tourism Organization (UNWTO, 2013), tourism has undergone continuous expansion and diversification, becoming an important and growing economic sector on a global level. On an international level, in 2012, it contributed 9 per cent of gross domestic product (GDP), creating, on average, one out of every eleven jobs and generating income that represented around 6 per cent of world exports. In real terms, in the same year, income grew by 4 per cent, reaching a record US$1tn 75bn. In terms of this indicator, this growth is similar to the 4 per cent increase in visits by international tourists, making evident the strong correlation between the two indicators. The most recent data indicates that this activity contributes 10 per cent of global GDP, generating one out of 10 jobs and US$1.6tn in exports, which represents 7 per cent of global exports and 30 per cent of services (United Nations World Tourism Organization, 2017).

According to the Economic Census conducted in Mexico in 2014, the tourism sector represented 11.7 per cent of the economic units of the national total, generated approximately 6.5 per cent of GDP, comprised 12.7 per cent of formal national employment, and provided 7.9 per cent of the national total for wages (National Institute for Statistics, Geography and Information, INEGI, 2017). Moreover, in 2016, the tourism sector represented 8.7 per cent of GDP, employing approximately 10 million people (De la Madrid, 2017a). In fact, in the first half of 2017, approximately 19.2 million international tourists visited Mexico, generating an income of US$11,104bn for this period (De la Madrid, 2017b). According to the Travel and Tourism Competitiveness Report 2017[1] [World Economic Forum (WEF), 2017], Mexico had risen eight positions from its 22nd place in the 2015 rankings. According to this report, emerging economies, of which Mexico is one, are gaining on advanced economies.

In some countries, international tourism has acquired ever-greater importance, representing, in Mexico, at least the third largest source of international income, behind income from petroleum and remittances sent home by Mexican migrants. Furthermore, the Organization for Economic Cooperation and Development (OECD, 2017) has documented that, in Mexico, national tourism contributed 88 of every 100 pesos spent in the sector, having a direct impact on host communities. Compared to the flow of international tourists, which is concentrated in destinations such as Cancun or Los Cabos, national tourism is distributed across the entire national territory.

The positive evolution of tourism and its potential for growth have increased over recent years, establishing tourism as a source of growth (tourism-led growth hypothesis), especially in developing economies, as is the case with Mexico.

In general, it is thought that, like exports, the growth of tourism contributes positively to economic growth. However, despite the robust verification of the hypothesis postulating exports as a motor of growth, many studies have not found that exports contribute definitively to a country’s capacity to produce goods and services (Darrat, 1986; Dodaro, 1993; Hsiao, 1987). Given that tourism may play a similar role in the economy of every country, the question has been asked for years as to the contribution of national tourism to economic growth.

This relationship is important as it enables the private and public sectors to plan and manage tourism activities with the objective of maximizing the benefits they provide. The general thesis is that tourist areas will generate a sufficient flow of visitors to drive economic growth at a regional, state and, therefore, national level.

Highlighted among the effects considered for measuring the impact of tourist destinations are the increase in foreign currency income, the generation of sources of local income with the externality effects of driving increased activity in other economic sectors, and the growth in direct and indirect employment. In terms of this last effect, however, other studies have established that tourism activities have no effect on formal employment, given their seasonality.

A generalized idea of tourism, one proven in the literature, is that this sector, further to increasing resources via foreign currency income, is able to create employment opportunities. Although empirical research has been undertaken in this area, it should be noted that the use of the Granger causality test to study the causal relationship between tourism and economic growth could cause three relevant problems:

1. the question as to whether annual data are sufficient for representing the long-term relationship between both variables;

2. the inability of the annual data to eliminate the problems of short-term fluctuations due to economic cycles and structural changes; and

3. the inability to delineate economies with special characteristics in terms of distinct causal relationships.

An important advantage of tourism is its generally high level of income elasticity given the demand for tourist services (Baretje and Defert, 1972). A recognized disadvantage is that the concentration of tourist activities could lead to a more vulnerable economic structure, given the natural absence of relationships with the industrial and/or productive sector in general.

In terms of public policy, the promotion of balanced economic development requires a detailed analysis of the determinants and effects of tourism activity. Highlighted among the important variables to consider in the development of tourism at a national level are the growing demand for associated services and the affinity with the geographical, natural and cultural characteristics of the regions in which it is based. While it is certain that a high number of tourists represents a considerable source of income at a local level, negative impacts on natural capital and cultural resources are also often observed.

In both the short and long term, tourism (both local and domestic) may make a significant contribution to a nation’s economic growth, while its potential generation of income and employment may be limited by its ability to offer the goods and services demanded by tourists. This may result, for example, from the fact that intermediate imports are commonly brought in from their countries of origin to meet tourists’ consumption habits. Despite this, given the offer of tourism and the infrastructure available, the income from tourists has a considerable effect on well-being and economic activity in the host countries. At an international level, tourist exports, in terms of people, services and foreign currency, result from increased levels of income in the countries of origin, local labor policy, and the reduced cost of international, principally air, transport. Moreover, it is important to note that the attraction of international currency improves balance of payments indicators and contributes to generating stability in the exchange rate system.

It should also be noted that, to a great extent, the majority of the organizations operating in the tourism sector correspond to micro, small and, in some cases, medium-sized enterprises. Furthermore, in terms of factors of production, the sector is work intensive, absorbing labor in the primary and service sectors and, thus, in some senses, reducing the indicators associated with local unemployment.

The relationship between human capital and productivity in tourism activity has been analyzed in developing economies, particularly the elements associated with the scarcity of personnel trained for work in this sector. The importance of personal services in this industry, in which national and foreign tourists interact constantly with staff from this sector, requires the consideration of variables, such as the educational level of tourism workers and the quality of the services and/or products. The difficulties of delimiting the tourism sector complicate the study of human capital and the extant abilities required by this economic sector. Some of the most relevant questions relating to human capital in this sector refer to the contribution of labor, either vocationally or academically trained, to the productivity of the sector and the generation of related public policy, among others.

Rodríguez and Brown (2012) state that, in Mexico, the expansion of the tourism industry is very recent, having begun approximately 35 years ago. With tourism a pillar of the Mexican economy, the number of establishments offering services in this sector grew rapidly at the beginning of the 1960s, as a result of the internationalization of the port of Acapulco, in the state of Guerrero. This growth continued with the beginning of operations, in 1975, at what is now one of the main international tourism destinations, the city of Cancun, in the state of Quintana Roo. However, Brenner (2005) describes how the tourism boom coincided with the development of luxury resorts in the 1970s. This was supported by a government seeking to increase foreign investment, generate employment and integrate, into the national economy, peripheral regions with clear signs of social marginalization, the presence of shantytown[2] enclaves and environmental deterioration.

The present study examines the relationship between tourism activity and the generation of employment in the 32 federated states of Mexico, via the use of panel data methodology and the cointegration of said panel data, to respond to the following research questions:

While said relationship has been already studied by other disciplines, such as administration, anthropology and psychology, the present study comprises pioneering quantitative research for Mexico on these relationships and variables.

The first section of the study presents a theoretical review of the literature on the relationship between employment and the activity of the tourism sector. The second section presents the empirical evidence that enables the observation of the possible relationship among the variables of interest, such as employment, economic growth, national and international tourists, exchange rate, and tourism infrastructure. The models and results are presented in the third section. Finally, the last section presents the final considerations and the public policy recommendations resulting from this research.

Theoretical review

Johnson and Thomas (1990) state that analysis of the relationship between tourism and employment reveals three main trends:

1. studies of the generation of potential employment by tourism and the role it has been attributed to play in the economic revival of depressed regions;

2. the description of trends that help to explain the structural changes and generate prognoses that assist with planning; and

3. studies may comprise the evaluation of a policy or a specific program.

In the same vein, Ladking (2011) establishes that tourism has been present in the economic agenda since the 1980s, finding that the majority of studies on the tourism-employment relationship analyze impacts, the generation of income and wages, and the evaluation of the economic benefits that tourism has brought to destinations and tourism developments. The results of said studies can be used in the design of industrial policy strategy and in decision-making processes; however, they also indicate that many of the economic benefits associated with tourism activity are often exaggerated.

Gómez and Pérez (2014) establish that, in terms of public policy, the promotion of balanced economic development requires a detailed analysis of the determinants and effects of the tourism sector. Within this framework, it is necessary to analyze those variables of great relevance to the development of tourism that, to a large extent, are represented by the growing demand for associated services and the affinity of tourism sites with the geographical, natural and cultural characteristics.

It should be noted that tourism is recognized as an intensive activity in labor terms (Pais, 2006) and, similarly, that its nature is such that its multiplier and spillover effects are expected to be higher than those in other sectors. Moreover, this activity generates employment at all levels and categories of ability, as well as a higher degree of competitiveness. In the same vein, the spillover effect presents when the affluence of tourists increases demand for local goods and services, due to either direct or indirect expenditure, or multiplier effects (Kadiyali and Kosová, 2013).

In the same vein, Habibi et al. (2018) indicate that the tourism sector can, without doubt, be a long-term objective of economic policy, given its potential to increase employment and growth, by:

• generating greater efficiency and economies of scale for goods and services, based on demand;

• sending signals to the market for the entry of new participants, generating a positive impact on goods and services; and

• competition and more consumer choice options may raise quality of life.

Becerra (2009) argues that tourism generates local employment, both directly in the same sector and also in various support and resource management sectors. Moreover, it would stimulate profitable national industries, such as the hospitality sector, transport systems, artisanal manufacturing and tourist guide services, as well as driving improvements in transport, telecommunications and basic community infrastructure. She continues that it generates distribution facilities that could be used for either local communities or national and/or foreign tourists and stimulates and contributes to financing the conservation of historical sites, buildings and neighborhoods.

Along the same lines, Onetiu and Predonu (2013) describe how employment in the tourism sector attracts the labor surplus from other sectors, thus helping to reduce the unemployment rate; moreover, these new employees renew the labor market, increase consumption and, thus, contribute to GDP growth, while also improving the levels of welfare in the region.

According to Leiper (1999), there is some confusion over the generation of employment by tourism, due to the fact that the national statistics are based on tourist spending and do not focus on those industries in which the work itself is carried out, thus ignoring the concept of partial industrialization. This concept is relevant for understanding the impacts of tourism on the local environment. Although Witt and Witt (1995) concur on the point that the evaluation of the employment generated in the sector is important, they do state that there is no standard industrial classification. This is a sector defined by demand and extending to other economic activities, partially measuring the employment created in those activities characteristic of the sector, such as hotels and restaurants and, for example, accounted for in the Tourism Satellite Account.

Studies such as those by Crouch and Ritchie (1999) document the role played by tourism as a generator of prosperity and quality of life, both for tourists themselves and the host communities. They also identify the economic impacts, among which are the generation of employment and the concomitant increase in prices. García and Siles (2015) establish that the tourism-employment relationship has also been examined by numerous studies on the competitiveness of tourism destinations (Dwyer and Kim, 2003; Dwyer et al., 2003; Craigwell, 2007). The competitiveness of the destination generates employment, which, in turn, is translated into prosperity, well-being and increased income for local inhabitants in host regions.

Castillo et al. (2017) indicate that the promotion of tourism via public policy is not an objective per se, rather the income via foreign currency, economic growth and the generation of employment that its expansion would bring. The latter may be direct, indirect or induced, with a wide range of possibilities (instruction, specialization, occupation and size), and may empower vulnerable groups, given that women, young people and adults would be employed. Furthermore, the tourism sector has the advantage of having few obstacles to entry, thus opening the possibility for the starting of small enterprises and the generation of self-employment.

For the Mexican economy, at a federal and state level, the tourism-employment relationship has been important, because it has been the basis for the design of development policy, as this is considered a priority sector due to its effect on the economic structure and capacity to drive the creation of sources of employment (Barrón et al., 2014). However, to date, few studies have measured the contribution of the tourism sector at a state level in both aggregated and differentiated terms. Moreover, in terms of the sector’s contribution to employment, the available statistics correspond to official data rather than academic studies that quantify the volume of job vacancies generated, as well as the specialization and productivity in the sector and their variations in the communities, as associated with the seasonality of tourist activity[3].

Balaguer and Cantavella-Jordá (2002) studied the relationship between the variables of economic growth and tourism activity in Spain via a time series model, seeking to ascertain whether or not said relationship is a long-term one. For this latter objective, they used the Johansen cointegration methodology with GDP data, income from international tourism and the exchange rate, based on the fact that the Spanish economy is a small open economy. For these authors, the tourism industry is today of vital importance for the global economy and, in particular, those countries that depend on this sector (mainly via employment and the export of services), arguing that attention has not been paid to the study of the contribution of this sector to economic growth. These authors conducted their research in Spain as they sought to establish whether the growth in international tourism had made a significant contribution to the development of the national economy over a period of 22 years. The theoretical basis of Balaguer and Cantavella-Jordá’s (2002) study is the hypothesis of export-led growth, taking into account, in part, the non-tradable goods sector, of which tourism forms part. They found that the income generated by international tourism positively affected the growth of the Spanish economy for the period 1975-1997. The impact that tourism has had on Spanish economic growth and the magnitude of the parameter verify the long-term effects, prompting the authors to argue that this finding strengthens the predictions made in other studies that have focused on tourism as a service and a non-tradable good. They also observe that, contrary to the prediction made by means of the export-led growth hypothesis, the growth of the tourism sector is not specific in developing economies, the income of which is based on the comparative advantage found in certain sectors of the economy.

Neves and Campos (2005) analyze the causal relationship between economic growth and tourism, using a panel data model on a sample of countries that have a tourism sector playing a significant role in their total economic activity. The studies they review approach said relationship from the point of view of a time series or other analytical tools, such as panel data, based on which, as well as data from Latin American countries, a greater per capita flow of tourists is found to generate higher levels of growth in nations with low and medium income. This relationship is not observed for wealthier economies. Therefore, Neves and Campos (2005) found that the conditional impact of tourism is not significant, while, in some sub-samples, an unexpected negative impact occurs, confirming the results found in the complete sample. The sign and significance of the parameters related to the variables of the tourist sector are relevant in Africa and Latin America as they are all found in the variables for the sub-sample, which assume a comparative advantage in the tourism sector. The authors conclude that tourism, on its own, cannot contribute significantly to the high rates of growth of those economies that specialize in tourism. The most surprising finding of this study is that, when there is a significant relationship between economic growth and tourism, the sign is negative.

Barro (1991) and Islam (1995) underestimate the presence of a causal relationship between tourism specialization and economic growth, a conclusion consistent with economic theory, which establishes that growth in a country is based more on the productive sectors than services. Oh (2005) analyzes the causal relationships between the growth of tourism and the expansion of the economy of South Korea under the focus proposed by Engle and Granger, doing so in two stages and using a bivariate vector autoregressive model. Among the main findings, the cointegration results do not indicate a long-term relationship between the two series while, secondly, the results of the Granger cointegration tests indicate a unidirectional causal relationship for the economic growth either directed or caused by the growth of the tourist sector. Thus, according to this author, the hypothesis that tourism is a source of economic growth is not sustained in the case of the South Korean economy. The same conclusion is sustained by the sensitivity tests for causality conducted under distinct delay selections. The results obtained by Oh (2005) for the South Korean economy contrast with those obtained by Balaguer and Cantavella-Jordá (2002), who used the same techniques for the Spanish economy.

Oh argues that the results of the tests indicate that the economic growth of the South Korean economy in recent years has tended to attract international tourists only in the short-term, given that international trade is known to be closely related to economic expansion. Therefore, while it would be rational to think that tourism is strongly affected by economic growth, the above-described positive effects are not maintained over the long-term. The author concludes that it would be desirable to include other variables, such as the exchange rate, which were perhaps not fully considered in his study. Economic policy recommends that care should be taken with the design of public policy that promotes tourism as a driver of economic development, given that the results obtained reveal economic growth to generate the growth of the tourism sector and not the reverse.

Lee and Chan (2008), on the other hand, use the technique of heterogeneous panel data cointegration to explore the co-movements and the causal relationships between the same variables for a group of countries in which the tourism sector is important, for the period 1990-2002. The application of the panel data methodology reveals a relationship between the evolution of GDP and the development of tourism. They also document that, in countries that do not pertain to the OECD, the development of tourism has a greater impact on GDP compared to that found in countries that do pertain to said organization. Similarly, they also find that:

• If the variable of tourism income is taken into account, the greatest impact is observed in sub-Saharan African countries.

• The real exchange rate has significant effects on economic growth.

• In the long-term, the causality revealed by the panel tests shows that, while the development of tourism has a univariate directional relationship with economic growth in OECD countries, these relationships are bidirectional in countries external to the organization.

In particular, Lee and Chan (2008) analyze the economic policy implications of their results and, specifically, argue that the long-term relationship between the development of tourism and real GDP means that both variables are causally related in some way, in at least one direction. However, they do not find the relevant data to resolve the question as to whether economic growth generates economic development or vice versa. One of their most important conclusions with regard to globalization is that it is preferable to compare the relationships between tourism and economic activities by groups of countries rather than individually, namely that the regional effects should be taken into account, as should the fact that the efficacy of the models is improved.

Po and Huang (2008) use cross-sectional data for the period 1995-2005 from a sample of 88 economies, with the objective of analyzing the possible non-linear relationship between the development of tourism and economic growth when using a limit variable. The degree of specialization in tourism, defined as q_i, is the earnings from international tourism as a percentage of GDP and is used as the threshold or limit variable. The results of the linearity tests indicate that the economies considered here should be separated into three distinct groups (or regimens) to analyze the possible nexus of tourism and economic growth. These authors observed that when q_i presents a value below 4.049 per cent (Regimen – 157 countries) or above 4.73 per cent (Regimen 3 – 23 countries), a positive and statistically significant relationship between tourism and economic growth is observed. Despite this, when q_i is within the range of 4.049 per cent − 4.73 per cent (Regimen 2 – 8 countries), evidence that confirms the relationship between these variables is not found.

Similar to the above-mentioned authors, Pablo-Romero and Molina (2013) indicate that the empirical study of this relationship could be attributed, in the first instance, to the work of Lanza and Pigliaru (2000), who observed that countries highly specialized in tourism activity share the characteristics of being small countries with a rapidly increasing per capita income. This results in what is known as the tourism-led growth hypothesis. To explore this relationship, the authors undertook a review of 87 studies, finding that a univocal relationship is observed between tourism and economic growth in 55 of them and a bidirectional relationship in 16, while nine studies either verify that the relationship runs from growth to tourism or find no relationship at all. The differences among the results respond to the selection of the specification of the model and the econometric techniques used. In general, all the studies conclude that tourism contributes to economic growth; however, the magnitude differs not only among studies but also within the same studies and the estimators obtained. Therefore, they propose the determination of the contribution based on the calculation of the global measurements with the published empirical evidence, namely via meta-analysis, which will enable the integration and synthesis of estimations obtained in prior studies.

Empirical evidence

The data used in this study are taken from various sources of information: the Satellite Account for the tourism sector; the Mexican System of National Accounts and the Economic Census (both available from INEGI); DataTur, the Ministry for Tourism’s monitoring system; the National Population Council; the United Nations Development Programme (UNDP); and, the Bank of Mexico. The impact of economic variables on both employment in the tourism sector and development was studied in the 32 states of the Mexican Republic in the period 1999-2014.

The following variables were considered for the analysis: Staff Employed (EmpleoTur_it) in hospitality activities and tourism sector services, with data taken from the Economic Census for the years 2003, 2008 and 2013; National Tourists (Tur_Nac_it) – the number of national tourists per federated state i in year t; International Tourists (Tur_Int_it) – the number of international tourists received per federated state i in year t; Rooms Occupied (Cuart_Ocup_it) according to the DataTur tourism compendiums for each federated state i in year t; Real GDP at 2010 prices (PIBreal_it) for each federated state i in year t; Exchange Rate (TipodeCambio_t) in year t; the Human Development Index (IDH_it); and, the average annual temperature (TemperaturaPromedio_it) for each federated state i in year t.

The empirical evidence for the variables considered in the economic literature for analyzing the impacts of the tourism sector indicates a positive relationship among said variables. The literature on this matter considers these variables to be of the greatest relevance for analyzing the impacts of and employment generated by the tourism sector. Figure 1 shows the figures for the spread of data between two variables – employment in the tourism sector and the economic variable(s). All show a positive relationship, namely, the higher the numbers of national and international tourists, rooms occupied, and real GDP at 2010 prices, the more employment is created in the tourism sector. To date, the results are consistent with the results found in the literature.

The correlation coefficients, similar to the scatter plots, indicate a positive and statistically significant relationship with the following values: ρ_{EmpleoTur,TurNac} = 0.834; ρ_{EmpleoTur, TurInt} = 0.424; ρ_{EmpleoTur, CuartOcup} = 0.625; ρ_{EmpleoTur, PIBReal_Base2010} = 0.763; and, ρ_{EmpleoTur,TipodeCambio} = 0.1705. The variable that shows the lowest coefficient is the exchange rate. While the literature considers the exchange rate a key variable, it only indirectly impacts employment, although it does directly impact international tourists in particular.

Other results observed in the empirical evidence concur with the data for tourism employment taken from three years of economic censuses in Mexico (2003, 2008 and 2013), wherein, over the years, this source of employment has grown in the federated states of Mexico, suggesting that tourism activity has helped to increase employment.

The variables pertaining to international tourists, national tourists, state GDP and tourism employment are considered from a geographical perspective here to conduct a differentiated analysis of the states of the Mexican Republic. The maps – using geographical information systems – are presented in Figure 2. The first panel presents GDP at 2010 prices for the states of the Mexican Republic in the years 2003 and 2013, with the central and northern states presenting the most growth for these years. The states of Guanajuato, Campeche, Tabasco and Puebla showed a significant state GDP increase, while others, such as those from the south (Guerrero and Oaxaca), reduced their levels of production. In the case of the states of Campeche and Tabasco, the GDP growth may have been due to the increase in international petrol prices and the concomitant increase in production. Over the same period of time, there were states whose production levels decreased significantly, as is the case with Baja California, Chiapas, Oaxaca and Chihuahua.

Over the 2003-2013 period, an increase is observed in the numbers of international tourists visiting the states of Campeche, Yucatán and Baja California Sur; however, these numbers decreased in various states, such as Sonora, Coahuila and, to a slight degree, Chiapas. However, in absolute terms, it can be seen that the number of international tourists increased for all of the federated states. National tourists increased in number, in particular in states from the center to the south of the country, as well as in the northern states of Chihuahua, Sinaloa, Nuevo León and the two states of Baja California.

In terms of the generation of employment via distribution and hospitality activities, according to the economic censuses, a significant decrease was observed in employment associated with tourism activities from 2003 to 2013 in the states of Coahuila, Tamaulipas and Durango, which have been characterized by insecurity and violence in recent years. On the other hand, there are states, such as those in the center and south of Mexico, which maintained and, in some cases, increased their tourism-related employment levels, which is the case with Puebla, Baja California Sur, Guanajuato, Oaxaca, Chiapas and the State of Mexico. Such employment levels did not significantly increase in the rest of the states of the Mexican Republic.

Model and results

The data and the empirical evidence described in the previous section allows the a priori expectation that the tourism sector in the 32 federated states of Mexico could have a positive effect on formal employment, as reflected in jobs available within the sector itself. To measure the impact of the variables considered in the present study on employment in the tourism sector per federated state, we used panel data models and data panel cointegration. This enables us to explore the qualities of both the cross-sectional and time series data, and to establish whether there is a long-term balance among the related variables.

According to previous studies from the literature on employment in tourism and related activity, the models estimated enable the identification of relationships among the variables to study the impact of tourism activity and other relevant variables on employment.

Conclusions

This paper presents a study conducted, in the context of the Mexican economy, on the relationship among economic growth, tourism activity and employment in the sector. The relevant literature on this area is not definitive in terms of the relationship among these variables, with the studies reviewed here being of various types: time series, cross-sectional, national and international. Among these studies, some conclude that there is a relationship between the increased levels of employment in the tourism sector and variables related to said sector. We use the methodology of panel data and panel data cointegration to prove whether it is possible to find said relationship for the 32 federated states in Mexico in the period 1999-2014.

The results indicate that said relationship can be found, indicating that tourists have an impact on the generation of employment in the tourism sector in the federated states. Moreover, GDP, exchange rate and the human development index for the states have positive effects on the generation of employment in the sector. The results are of great relevance for the period studied, given that they reinforce the public policy established at a federal and state level for the tourism sector.

The public policy recommendations emerge from the results of the models estimated and the analysis based on the geo-referencing undertaken by federated state, economic variable and tourism activity. The results obtained prompt the following public policy recommendations:

• In recent years, the activity of the tourism sector has been growing in Mexico, due to which, the activity of the tourism sector should continue to be fostered, at not only an international but also a national level, because it is Mexican society itself that most impacts employment in the sector, particularly in hospitality activities and services in the tourism sector.

• Considering that the growth of the sector is not unlimited, those responsible for public policy for the development and growth of the tourism sector in Mexico must be conscious that increased activity in the tourism sector depends on other variables. These variables comprise the economic growth reflected, in part, in household income, economic, political and social stability in Mexico, security, the development of tourist destinations and associated activities, such as production and tourism services.

• Public policy in the sector not only must be oriented toward its growth but must also aim for the social and economic development of both Mexico’s tourist destinations and its federated states.

• The long-term relationships that result in a balanced sector are found in the variables of employment, national and international tourists, economic growth, economic development as measured by the human development index and exchange rate variations.

Moreover, the results open new research lines, such as the impact of the programs driving demand in terms of national tourism, such as Viajemos todos por México (Let’s all travel around Mexico) and Pueblos Mágicos (Magical Towns).