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Gov’t. Subsidies Energize Mexican Resort Business: Funding Boost Will Enable Destinations to Renew Ad Efforts; Some May Shop for New Ad Agencies By J.L. Sulliva

LOS ANGELES – Picture a game of musical chairs set t

Armed with new government regulations that will bolster contributions made by resort associations to community ad chests, a number of destinations which had suspended advertising are expected to renew their efforts. Some new destinations are likely to launch ad campaigns. And an as-yet-undetermined number of tourism accounts may go into review. Industry sources estimate that only about half of the destinations earmarked for a spending boost are currently hooked up with any ad agency.
Among those destinations likely to shop their accounts: Los Cabos, Ixtapa/Zihuatanejo, which had been dormant; and Oaxaca, Puerto Escondido and Taxco, all new destinations added to the roster to receive government support.
The chase began in May, when Mexico’s state and federal officials reordered their policies on matching any funds raised by business associations in resort destinations. Previous custom allowed the associations – made up largely of hotels – to use pledges of support from members as the basis for applying for matching government funding. The pledges often went unfilled, however, leaving either empty ad pockets or budgets so small they couldn’t accommodate any real ad effort.
If the program succeeds, sources said, the government will probably play a greater role in the advertising process. In the past, even those who made use of government funds often ignored the requirement to hold agency reviews annually. But the government is expected to take a stricter stance on the policy in the future.
The new attitude on funding appears to come with a new philosophy on marketing, according to Chuck Reynolds, president of Reynolds & Associates/Manhattan Beach, Calif., which just landed a $3-million piece of business from the Acapulco Resort Association. ‘I think that Mexico as a country and the individual (resort) destinations realize they have a great opportunity to increase tourism,’ said Reynolds, who has also handled Puerto Vallarta’s account for the past year. The private sector in Mexico realizes ‘now is the time to be aggressive,’ he added.
Copyright Adweek L.P. (1993)