Eight People Killed in Mexico Resort City of Cancun

Eight Mexicans died in an attack early this morning at a bar in Cancun, the resort city known for its white-sand beaches, spring-break festivities and as the site for this year’s global climate-change summit.

The attack occurred at a bar called Castillo del Mar, about 5 kilometers (3.1 miles) from the city’s main hotel zone, and all the victims were Mexican, according to the Quintana Roo state Attorney General’s office.

Mexico’s push to draw tourists, among the country’s biggest source of dollar inflows, is getting harder as violence connected to drug trafficking persists. Cancun and Acapulco hotels saw a smaller-than-normal influx of college-age revelers in March, tour operators there said.

Violence is intensifying as the government steps up its battle against drug traffickers and organized crime, expanding its focus beyond the northern border with the U.S. where most smuggling is concentrated. In May, federal police arrested Cancun Mayor Gregorio Sanchez for alleged money laundering and ties to drug-funded organized crime groups.

Quintana Roo Attorney General Francisco Alor said the killings today wouldn’t have any effect on Cancun tourism.

“People will keep going out, keep living life,” Flor said in an interview. “It has absolutely nothing to do with the tourist hotel area. We won’t have to increase security in the hotel zone.”

Photographer: Alfredo Estrella/AFP/Getty Images

Edgar Valdez Villareal aka 'La Barbie'of the Beltran Leyva drug cartel, is presented to the press at the Federal Police headquarters in Mexico City. Close

Edgar Valdez Villareal aka 'La Barbie'of the Beltran Leyva drug cartel, is presented to... Read More

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Photographer: Alfredo Estrella/AFP/Getty Images

Edgar Valdez Villareal aka 'La Barbie'of the Beltran Leyva drug cartel, is presented to the press at the Federal Police headquarters in Mexico City.

Impact of Violence

Mexico’s government says violence saps 1 percentage point from gross domestic product annually. The country’s drug cartels generate as much as $30 billion a year selling marijuana, cocaine and heroin to users in the U.S., according to data from the U.S. State Department.

The peso dropped 0.6 percent to 13.2327 per dollar at 2:47 p.m. New York time. Earlier today, it fell 0.9 percent to 13.2625 pesos, the lowest since May 25.

Grupo Aeroportuario del Sureste SAB, the company that operates airports in southern Mexico, including Cancun, dropped as much as 1.5 percent to 54.22 pesos, the lowest level in a year. The stock was down 1.2 percent to 54.4 pesos at 2:47 p.m. New York time.

The attack may have been related to a previous attempt to extort the owners of the bar, Alor said, adding that he couldn’t confirm whether drug traffickers were involved.

“We’re not ruling out that it could have been revenge for an extortion complaint made by the owners,” Alor said.

Cancun is hosting the next major round of United Nations- sponsored talks on carbon emissions and global warming, scheduled for late November.

Mexico’s international tourism fell for the first time in a decade last year amid a weak economy and a swine-flu scare, bringing in $11.3 billion compared with $13.3 billion in 2008.

‘La Barbie’

The Cancun attack came hours after the federal Attorney General’s Office said police apprehended a suspected Texas-born drug trafficker, known as “La Barbie” for his blonde hair and fair complexion. U.S. authorities he say has smuggled thousands of kilograms of cocaine from across the border in Mexico.

Edgar Valdez Villareal, an alleged leader of the Beltran Leyva Cartel, was captured yesterday in central Mexico after a yearlong investigation. U.S. authorities had offered a $2 million reward for his arrest.

Violence related to organized crime has killed more than 28,000 people since President Felipe Calderon came to office in December 2006, mostly people involved in the drug trade or officials fighting against them.

Former Governor Mario Ernesto Villanueva Madrid, who led Quintana Roo state, which includes Cancun, was charged in the U.S. in May with conspiring to send cocaine and laundering almost $19 million through accounts with Lehman Brothers Holdings Inc. He pled not guilty in federal court in New York.

To contact the reporter on this story: Jens Erik Gould in Mexico City at jgould9@bloomberg.net

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