Oaxaca has been the recipient of federal grant money to rebuild the coastal highway from Puerto Escondido to Huatulco, expanding it to two lanes in each direction, and construct a new highway from Oaxaca City to Ventanilla (near Puerto Escondido) which will cut travel time substantially for travelers to the coast. The investment is part of Calderon’s plan to promote tourism on the Oaxacan coast and generate development similar to what is found on the Riviera Maya or the Acapulco-Ixtapa route in Guerrero.
According to a recent article at Notihuatulco.com, construction on the remaining 104 km in the Oaxaca-Costa route has been approved and is restarting after budgetary problems stalled the project in 2009. That route is scheduled to complete in 2 years for a total cost of 600 million pesos.
The east-west route from Puerto Escondido to Huatulco has been halted at El Tomatal due to a dispute with the agricultural community of San Francisco Cozoaltepec, which has filed a claim against the Secretaría de Comunicaciones y Transportes (SCT) in the agrarian courts. They are requesting compensation for allowing the roads to pass through the communal land in Santa María Tonameca, and it seems the neighboring district of San Pedro Pochutla will want a piece of the pie too. There will be no further construction until the matter is settled in court, and this particular court is known for moving at speeds that one friend described to me as “como una tortuga”.
The highways have been hyped up somewhat to generate great expectations in coastal towns for improved revenue from tourism, which has spurred increases in land purchases by small developers and aspiring home owners. Businesses imagine flocks of city dwellers from Oaxaca (and Mexico) as travel time to the coast drops from 8 hours to only 3.
However, the highways may become bogged down in further political infighting and budgetary mismanagement and will likely take longer to complete than anticipated. Once eventually finished, it may indeed bring hordes of people from Oaxaca City during Semana Santa and Christmas, and more condos will be sold to rich Mexicans. But the condos and hotels will still be vacant most of the year, and for most of the area, a huge influx in tourism seems unlikely until general conditions in Mexico improve. Most Oaxacans (and other Mexicans) work 6 days a week and don’t make enough money to take weekend trips to the coast even if it is only 3 or 6 hours away, and those that have a lot of money would probably prefer to spend vacations somewhere with more services, such as Acapulco or the Riviera Maya on the Caribbean.
Unfortunately, over recent years, crowds at the beaches during Christmas and Semana Santa have gotten smaller, not bigger. However, despite the fact that tourism numbers only remain steady or are falling in recent years, investors continue to build. In many places more people come to the coast with the goal of providing services (selling things, i.e. building a posada, or starting a restaurant) than consuming them, and this trend will probably continue in the short term.
This trend also pushes local prices up, and the price inflation derived from anticipated growth has not helped attract tourists or benefited locals. In the smaller communities, locals would benefit much more from selling their extra land assets at a fair price and investing the profits elsewhere, rather than waiting indefinitely for prices to meet their ever growing expectations.
Of course it could be that development explodes after the economic crisis dies down in a few years, and that land prices are indeed at bargain rates. However, the frantic pace of development over the last decade was spurred by credit availability, not actual demand, and in most tourist locations in Mexico and worldwide there are now too many hotels and many are failing. Appetite for new development may not return quickly, with governments suffering heavy debt loads and so many new projects being sold cheap out of foreclosure.
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