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Lisa Napoli: This week, the U.S. State Department issued a travel alert for Americans heading to the northern border region of Mexico. The reason: a surge in violence and kidnappings linked to Mexican drug cartels. Marketplace’s Jeff Tyler reports the violence it’s starting to take its toll on the tourism industry.

Jeff Tyler: Last year, 26 American citizens were kidnapped in or near Tijuana. That’s more than double the number from the year before. And the kidnappers show no sign of backing off.

Darrell Foxworth: This operates like a business for them.

That’s FBI Special Agent Darrell Foxworth. He says the kidnapping cells usually target people with a business or family on the Mexican side of the border.

Foxworth: Kidnappers appear to do some type of research prior to the kidnapping, so that they have an idea as far as the individual, the family or business’s ability to pay a ransom. So, when it comes to your everyday tourist traveling down to Mexico being a victim of the kidnappings, that’s not what we’re seeing.

But everyday tourists are staying away. Thanks in part to the kidnappings and a rise in drug violence, the number of Americans visiting Tijuana is down 50 percent. Business is suffering in the nearby beach town of Rosarito, where Louie Navarro owns a cigar shop.

Louie Navarro: It’s slow. Sales have been down anywhere from 70 to 80 percent.

Crime also threatens the real estate business at a time when the sluggish U.S. economy has people thinking twice about buying a vacation home. I asked Baja’s Secretary of Tourism, Oscar Escobedo: What kind of money are we talking about?

Oscar Escobedo: Talking about billion dollar projects. We started in Tijuana with a development with the four towers that Donald Trump Group are doing.

Thousands of seaside condos are being built. Plus a Greg Norman-designed golf course. To counter bad PR, Baja is spending almost $2 million to promote tourism. A new tourist police force has been established specifically to help protect foreigners. But Escobedo says the threat is overblown.

Escobedo: As far as Tijuana is concerned, tourists are safer in Tijuana than in any major city in the U.S.

The local community seems to agree. A Baja newspaper recently ran this headline: “Travel Warning — Avoid the United States.”

In Los Angeles, I’m Jeff Tyler for Marketplace.