Deadly Mexico flu outbreak scares away tourists

MEXICO CITY, April 28 (Reuters) - A deadly swine flu outbreak in Mexico is scaring away foreign tourists and hotels are reporting cancellations across the country in a blow to an important engine for Mexico's economy.

Mexico is one of the world's top vacation destinations and foreign tourists spent more than $13 billion last year visiting its lush beaches, colonial towns and pre-Hispanic pyramids.

But as fear spreads over the flu outbreak that has killed 149 people, cruise ships have canceled stops at Caribbean resorts like Cancun. Land-based tour groups were also calling off trips to the area's beaches, a local official said.

Governments around the world have issued travel alerts to Mexico, and some flights out of the country were reported to be overbooked.

"They are really rushing to get out," said Alexander Kittler, 32, a flight attendant for Lufthansa.

Some of his colleagues grabbed armfuls of food and water as they arrived at Mexico City airport and went to hole themselves up in their hotel until they could leave. One said she planned to wear surgical gloves on the flight back.

The United States, Canada and the European Union have advised against non-essential travel to Mexico, and Cuba has suspended all flights to and from the country.

Canadian tour operator Transat AT (TRZa.TO) (TRZb.TO) said on Tuesday it was postponing flights to Mexico until June 1. A flight into Mexico City from New York on Saturday evening was practically empty.

Mexico City's hotel association said about 60 percent of the capital's hotels have reported cancellations due to the epidemic, caused by a never-before-seen virus with elements of swine and avian flu.

Only a handful of foreigners could be spotted in Mexico City's historic center, which normally brims with tourists, as everyone from police to taco vendors wore surgical masks to ward off the virus.

British tourist Guy Waddington, 29, had just gotten off a bus from a backpacking trip through northern Mexico and was looking for a pharmacy. He plans to leave Mexico on Wednesday.

"My parents texted me and told me to buy a mask," he said.

TOUGH BACKPACKERS UNDETERRED

Mexico's tropical beaches are major destinations, though foreigners also flock to the capital to visit colonial churches, museums, Aztec ruins and tequila-swilling cantinas.

The flu scare is the latest bad news for Mexico's economy, which is in recession because the U.S. economic crisis has led to a collapse in demand for its exports.

Shares in airport operators rebounded on Tuesday after plunging the previous day. Mexican operator GAP (GAPB.MX) rose 3.38 percent after nosediving nearly 14 percent on Monday.

Some hardcore backpackers would not be deterred, however.

Roberto Landi, 29, of Italy was about to start a three-week trip through southern Mexico and Central America. He survived a trip to Taiwan during Asia's 2003 SARS pandemic and thought the death toll in Mexico was not that high given the crowded capital alone has a population of some 20 million people.

"I feel OK and I want to keep on traveling," Landi said. (Additional reporting by Luis Rojas in Mexico City and Jose Cortazar in Cancun; Editing by Catherine Bremer and Eric Beech)