Cancun Spared Worst by Hurricane But Cost Seen at $4 Billion

(Bloomberg) -- Cancun woke up to much of the city without power, fallen trees and shattered windows as Hurricane Delta made landfall Wednesday morning as a Category 3 storm.

Cancun is now in a rush to restore electricity and clear roads, with state Governor Carlos Joaquin saying the storm could still cause intense rain showers and winds of up to 120 kilometers per hour. He has called on people to remain at home, although he expects the thousands of tourists who were ordered to evacuate resorts and move into shelters may be able to return in the coming hours.

The most visited city in Latin America, Cancun was spared the worst of predictions but the impact could still cost the region as much as $4 billion in damages, according to Chuck Watson, a disaster modeler with Enki Research. The estimate threatens to further slow the Yucatan Peninsula’s recovery from economic ruin brought on by the coronavirus.

It could’ve been worse. Damage predictions were as high as $16 billion when it looked like the hurricane would hit at Category 4 strength. The airport was scheduled to reopen at 3pm local time, Cancun’s Mayor Mara Lezama said in a radio interview.

“Thankfully we didn’t see the worst-case scenario come to fruition,” said Jose Manuel Lopez, head of Mexico’s tourism business chamber Concanaco Servytur, in a phone interview from Merida, Yucatan. “Some of the hotels I’ve spoken to won’t even use insurance policies because the deductibles are higher than the actual damages, which were relatively minor.”

The northern side of Yucatan state remained on red alert, Governor Mauricio Vila said on Twitter, calling on citizens to remain cautious.

Mexican utility CFE said in statement that Delta affected 33% of power customers in the Yucatan peninsula, while America Movil SAB’s Telmex said its land lines were operating normally.

Lost Jobs

The region had already lost more than 100,000 jobs in the service sector as the coronavirus pandemic halted travel and forced hotels and restaurants to shut down.

Over half of Cancun lost power, as did Playa del Carmen and Cozumel, Joaquin said. The latter two towns were also reporting flooding, he said.

The pandemic practically grounded air travel earlier this year, with passenger arrivals dropping 97% in April. Figures were beginning to show some signs of recovery: in September, Cancun airport operator Grupo Aeroportuario del Sureste SAB reported only a 22% drop in domestic travel from a year ago.

Yet visits by international clients, which are sometimes preferred by local businesses due to their increased spending power, are still down 66%, Asur said. Now, with canceled and delayed flights due to the storm and the added complications of traveling during a pandemic, the recovery might slow down again.

“We debated about travel, decided that we felt safe with protocols in place from both the airlines and the hotel,” said Chris Roquemore, 47, who’s sheltering at a resort between Cancun and Playa del Carmen. “We got here Sunday and now this. LOL. I can only chalk it up to 2020.”

©2020 Bloomberg L.P.