Arnolfo Cabral leaned against his 1980 Dodge Dart parked in front of the 430-room Galeria Plaza Hotel, the newest hostelry in Mexico City's fashionable Zona Rosa (Pink Zone).
"Business is not good, senor," said Cabral, one of hundreds of self-employed tour guides who earn their daily bread hauling foreign visitors around the oldest capital in the Americans.
"The inflation is driving the tourists away," Cabral continued, wiping the spotless hood of his chocolate-brown Dart.
Mexico is no longer the bargain it was four years, or even two years, ago. An inflation rate estimated variously at 35 percent to 50 percent, depending on whose figures you choose to accept, is rapidly lifting Mexico from the bargain basement of tourism up to the boutique level.
In just two years hotel prices have almost doubled. In 1979, for example, a single room at the El Presidente Chapultepec went for $50 to $55. Today that room is $85 to $95. A single in Western International's Galeria Plaza is $80. Naturally, by stepping down a notch or two you still can get a perfectly good room in hotels such as Quality Inn's Geneve ($30) for a double) or the Montejo ($40 for a double), both in the prestigious Zona Rosa.
Dining, one of the few bargains left for the peso-pinching visitor, nevertheless can net you a $40 to $50 check for two persons if you choose to patronize a first-class restaurant. But, as in any other major metropolis in the world, you can find plenty of meals for two in the $15 to $20 range.
"A lot of Americans are shocked when they come here," said Cabral, who has been a licensed tour guide for almost 20 years. "They expect their dollars to go a long way, and when they don't, they think they are being cheated. But the fact is, we are all being cheated in Mexico these days because of the inflation. I am 55 years old, and I have never seen anything as bad as this."
What has caused this unprecedented price explosion south of the border? The answer is simple: oil. Billions of barrels of it. Mexico is sitting atop an ocean of the black gold -- 60.1 billion proven barrels and 250 billion barrels of potential reserves.
In the last three years Mexico has averaged almost $10 billion a year in oil revenues. Most of that money has been plowed back into the petrochemical industry to try to move Mexico into the big league of industrialized nations. But that kind of government spending has created a plethora of pesos, which in turn has fueled the fires of inflation.
Mexican oil also has relegated tourism, long this nation's leading earner of foreign currency, to second place as a national industry. (Last year Mexico earned about $5.4 billion from tourism -- including border transactions.)
"Touris is No. 2 now, but I think in the long run it will be No. 1 again," Mexico's new minister of tourism, Rosa Luz Alegria, said. "I say that because oil is a nonrenewable resource, and touris, and its potential, is not. Tourism is capable of continuous growth, capable of generating more and more employment.
"We have barely tapped our tourism resources," said Alegria, the first woman in Mexican history to hold a cabinet-level job.
But while Mexican tourism fights its way back to the top, it must contend with the effects of an inflation rate that is at least three times worse than that of the United States. Not only is Mexican inflation a barrier to the 4.2 million foreign travelers who visit Mexico each year, it is driving Mexican tourists to the United States where they can get more for their peso. About 2.6 million Mexicans visited the United States in 1980.
"Mexicans are spending more than the 10 million Canadians who visit the United States each year," according to Peter Bohen, director of the U.S. Tourism Office in Mexico City.
"They have discovered that they can get more for their money in the States.
They are buying lots of appliances, watches, radios, TVs. They are without a doubt the most important ingredient in America's $5 billion-a-year tourist industry. All of which has the Mexican government worried."
Hoping to offset the higher cost of traveling in Mexico, the government ha embarked on an ambitious program aimed at developing dozens of new tourist sites.
This is all part of Mexican Presidednt Jose Lopez Portillo's campaign to persuade private investors to construct some 100,000 new hotel rooms during his six-year-term, which ends in 1982. Each new hotel room, according to tourism ministry figures, will create 6.4 new jobs in a nation with underemployment at about 40 percent.
The new resorts also will provide rooms for the 24 million visitors Mexico estimates will be vacationing there by the year 2000.
Already, projects are under way to develop Cabo San Lucas, Loreto and San Jose del Cabo in Baja California. Mexico's western coast is also under development, with places such as Ixtapa Manzanillo (where the film "10" was shot, Carreyes, Guayman, Kino Bay and San Felipe growing fast and attracting more tourists.
All this investment is happening in inflation-plagued Mexico because the government is guaranteeing attractive, low-interest loans.
As a result of this plan, hundreds of little-known and out-of-the-way attractions are suddenly blossoming. One example of this phenomenon is a singularly beautiful hotel called La Mansion Galindo, which lies some two hours by car north of Mexico City on the road to Queretaro.
La Mansion Galindo was originally built in the 16th century by Hernan Cortez for his Aztec mistress, Malinche. It is a sprawling old hacienda in the village of Galindo complete with courtyards, fountains and 400-year-old paintings and tapestries.
Managed by Hyatt, the 140-room hotel has been renovated to the tune of $10 million. It boasts large, comfortable rooms with private courtyards and whirlpool baths. There is a large swimming pool, horseback riding, a gourmet restaurant, a bar with entertainment, a cantina, a small shopping area and even a colonial church, which Cortez had built into the hacienda.
There is also the kind of Spanish colonial ambience and grace once ubiquitous in Mexico City, but now all but devoured by the virulent urbanization of this sprawling metropolis of 16 million. For reservations in La Mansion Galindo, dial 467-2005 in Mexico City. A double room with whirlpool bath runs about $65. However, there are less expensive accommodations.
Even the Zona Bosa, the elegant heart of Mexico City, with its shops, hotels, outdoor cafes, theaters and restaurants, has benefited from the government's liberal loan guarantee policy. Just when you think the 12-square-block area famous for its pink sidewalks (hence the name) has grown about as much as it can, up springs another new restaurant or hotel.
A case in point is Cicero, a new establishment right out of prohibition-era Chicago (or Cicero). The owners have spent almost $3 million on the decor alone in an effort to make Mexicans, tourists and visiting Chicagoans feel as if they are dining with Al Capone, John Dillinger and others out of Front Page Chicago.
There are red velvet walls loaded with photos of such famous (or infamous) Americans as Machine Gun Kelly, Pretty Boy Floyd and Ma Barker. There is also a bar with more brass railings and fittings than the Queen Mary.
Cicero offers a varied continental menu, but the red snapper Vera Cruz is excellent. Prices range from $8 to $20 a person. Reservations are helpful. Cicero is located at Londres 195, just a block from the Galeria Plaza; 525-6130.
For gourmands there is the Ille de Franc, a new French restaurant in Galeria Plaza at Hamburgo 195, which is causing a mild sensation in Mexico City, and Hacienda de los Morales, located in Mexico City's Polanco district at Vazguez de Mella No. 525; 540-3225.
For fun and good food there is Anderson's at Reforma 400 on the edge of the Zona Roa's a few blocks from the American Embssy. Anderson's is famour for its wisecracking waiters, a marimba combo and the longest menu in town. Prices are moderate.
One of the newest innovations in Mexico City has been the installation of a magic telephone number for troubled, lost or forlorn tourists. Operated by the ministry of tourism, the 24-hour number is manned by multilingual individuals who can provide answers to questions in additiona to help. The number is 250-0123.
A word of caution: Mexico City is at an altitude of 7,200 feet. Thus it pays to let your body become acclimated before inflicting seven-course meals on your digestive tract or an excessive amount of tequila on your liver. Those who don't heed this advice are invariably the ones who return home with the horror stories of "Montezuma's revenge."
Mexico City is also, despite its size (twice as populous as New York City), a relatively safe place. However, as in any big city, it is always foolish to flash large amounts of cash in public.