Experts Doubt Hurricane-Battered Cancun Could Be Up and Running for Xmas

Mexican President Vicente Fox says the seaside resort of Cancun, devastated by Hurricane Wilma, will be rebuilt by Christmas. Hotel operators and engineers say it can´t be done.

“To repair the hotels 100 percent will take eight months,´´ said Alejandro Ortiz, an engineer hired by Europe´s largest travel company, TUI AG, to assess losses.

Insurance companies including Bermuda-based PartnerRe Ltd., estimate damage to the hotels of Cancun, Mexico´s top tourist spot, Cozumel and Playa del Carmen at about $2.6 billion. Restoring beaches stripped of their white sand will add to the cost.

Fixing the damage is crucial to Mexico´s economic growth, said John Welch, a New York-based economist at Lehman Brothers.

Tourism is the country´s biggest revenue generator after oil and money from Mexicans working abroad. The three Caribbean Sea beach towns account for a third of the $12 billion the Mexican government says foreign tourists will spend in 2005.

Mexico´s growth will be cut by as much as 1.6 percentage points in the fourth quarter because of lost tourism revenue, Welch said. The slowdown will drag on annual growth that economists already forecast will fall short of the government´s 3.5 percent estimate for this year.

Mr. Welch lowered his fourth-quarter growth estimate to 3 percent and his annual forecast to 2.8 percent from 3.1 percent after Wilma battered the Cancun area on October 21 and 22. The economy last year grew 4.4 percent.