San Miguel de Allende’s Economic Recovery

By Carola Rico and Francisco Peyret

Many wonder how San Miguel de Allende was spared a severe crisis from the pandemic. We are not saying there were no casualties and consequences, but compared to other tourist destinations, SMA was spared. For example, in the hotel sector, the pandemic did not affect all tourist destinations equally in Guanajuato State. Since last year, statistics have shown signs of recovery, and in SMA this process has been more dynamic. 

In 2021, the Tourism Observatory of the State of Guanajuato (OTEG) indicated that over 1.5 million visitors stayed in one- to five-star hotels, and revenue reached 4,518,000 pesos in that sector.

2021: The most-visited cities in Guanajuato State*    

*Cumulative figures from January to September 2021 in the most visited cities in Guanajuato State 

Daniel Velázquez Gómez, president of the Association of Hotels of SMA, spoke exclusively with Atención. He pointed out that one of the business sectors most affected by COVID-19 was the hotel industry. There, hundreds of workers whose main source of income was the hotel business, were laid off. Fortunately, today the outlook is different.

Velázquez pointed out that during the most recent vacation period, hotel occupancy rate rose significantly compared to that of 2021. During Holy Days (Thursday, Friday, and Saturday) occupancy was 85-90%, and for the rest of the week it was 65-70%. The figures were 15-20% higher than last year’s. Velázquez emphasized, “We can clearly see an improvement in the economic flow of tourism in the city.”

With respect to labor recovery, Velázquez noted that during the pandemic 30% of the jobs in the hotel sector were lost. Today, however, they have fully recovered, especially since February of this year, with the opening of new hotels.

Regarding sanitary and civil protection measures, Velázquez noted that on May 2, the State Government announced that the COVID-19 contagion risk traffic light was suspended. Establishments are no longer obliged to screen patrons at hotel entrances, and masks are no longer mandatory. However, each hotel is free to apply the health measures it considers pertinent.

During Easter Week this year, tourism in Guanajuato State seems to have recovered almost completely. According to figures from OTEG, over 1.1 million visitors flocked to the state during the period. Guanajuato’s destinations draw visitors to cultural activities, nature, romance, gastronomy, wine, spirits, wellness, business, and sports. During the two-week vacation period (April 8 to 24), the state recorded an economic intake of over 2.3 million pesos, a 59% increase year over year. In terms of the number of visitors, this year’s figure was 43% higher than in 2021. 

OTEG figures indicate that in Guanajuato State, 224,000 tourists stayed in 1- to 5-star hotels during the Easter vacation, which registered an average occupancy rate of 31%. The destinations with the most visitors were León, Guanajuato capital, and SMA. León recorded 34% hotel occupancy with 70,000 tourists arriving at hotels; Guanajuato capital recorded 43% occupancy with 45,000 tourists arriving at hotels; and SMA had 53% occupancy with more than 45,000 tourists arriving at hotels.

What are the keys to SMA’s faster recovery than other tourist destinations’?

In Peyrets’ opinion it is very likely that San Miguel de Allende took adequate measures to control the pandemic, which allowed it to keep economic sectors active during 2020 and 2021. Also, dozens of SMA businessmen took out loans from Fondos Guanajuato to stay afloat.

We note that at the beginning of 2022 the Tourism Council was disbanded, and a new model of tourism promotion is still being worked out. That has not been detrimental to areas such as weddings and activities outside the city center. 

Looking more closely, however, we find that within this apparent economic success, other economic sectors were more severely hit. These include the industrial and artisan sectors. Although they are back on their feet, the prognosis is a little less encouraging, especially for those businesses with a direct relationship with international trade. Other hard-hit sectors are the supply side of the automotive sector and businesses that require steel and other inputs related to heavy industry.

On the other hand, during the pandemic new investments arrived. Although some restaurants and hotels had to close, in the last year SMA has seen a proliferation of new cafes, restaurants, and terraces. Also, corporate brands such as City Market, Walmart, and Hilton arrived in SMA. Even during this health crisis, great investments were being made in SMA.

Finally, according to sources in the real estate sector, this market moved just over US$75 million in 2021, and so far in the first half of 2022, has exceeded US$45 million. These are clear signs of a very dynamic sector (including land in industrial estates). 

Tourism is back, and other sectors are contributing to the wave of recovery. What many people are wondering in this post-pandemic awakening is if all this development is sustainable. We are the start of reflecting on how we want to manage this new cycle in San Miguel de Allende.