Both international and domestic travel bode well for leisure destinations in Mexico, said speakers at the 2019 Mexico Hotel & Tourism Investment Conference, and the country’s government and hoteliers need to do what they can to capitalize on that.
Editor’s note: Quotes in this story were derived from a Mexico Hotel & Tourism Investment Conference panel that was conducted in Spanish and translated by event staffers in real time at the event.
MEXICO CITY—There are positive signs both within Mexico’s borders and across the globe that the country’s leisure destinations are poised for long-term strength, according to a panel of experts speaking at the 2019 Mexico Hotel & Tourism Investment Conference.
Federico Moreno-Nickerson, VP of development for Apple Leisure Group, noted how Mexico’s international profile continues to grow, with it recently placing sixth overall in international visitations and surpassing both Turkey and the United Kingdom. He said there is more than one reason for that growth.
“It’s not only due to the attractions but because of the service in Mexico,” he said. “Mexico compares well to other destinations because the service is superior to many others, including our northern neighbors.”
Ruben Becerra, VP of corporate affairs and business development for Karisma Hotels & Resorts, said tourism is an increasingly important part of the Mexican economy, but hoteliers need to bring some creativity to the industry to add fuel to the fire.
“You have to find a specific concept that has exponential growth to attract tourists based on that concept,” he said, noting the country has “great natural beauty” that could be a driver of travel.
Domestic demand must be met
Michel Montant, corporate director of development for Grupo Posadas, said it’s important to remember that three out of four travelers in Mexico come from within the country’s borders, and that means there are opportunities to develop destinations other than the big international landing spots like Cancun, Los Cabos and Riviera Maya.
“Mazatlán was mentioned earlier; that’s one of the markets that can emerge and create a critical mass as a new destination,” he said.
He said the way that is achieved, as showcased by Mazatlán, is in infrastructure investments in things like highways to provide greater access.
Deals are getting done
Panelists noted the pace of development in Mexico has slowed a bit as investors have grown cautious about some economic issues in the country, but they are optimistic Mexico’s long-term growth is keeping things from completely going cold.
“It’s slowed down but hasn’t stopped,” said Alonso Burgos, VP of Caribbean and Latin America development for Marriott International, noting the company has inked deals for new St. Regis and Ritz-Carlton destinations.
All-inclusive is increasingly important and diverse
Moreno-Nickerson said that appetite for the all-inclusive segment is growing, and those properties, which have historically been more cost-oriented, are now seeing some growth in the luxury segment. He said many of the major international brands are also showing interest in having an all-inclusive footprint in the region.
“I say the more the merrier because it helps us all,” he said. “The mass market is still there, but the ones who are struggling are because they are unable to differentiate, and competing just on rate is a touch-and-go game.”
Mario Carbone, director of development for Central America and the Yucatan Peninsula for Hilton, said his company is one of those working to carve out a space in the segment.
“There’s room for all-inclusives that provide exclusivity and service,” he said. “We are working on a flagship property in Riviera Maya.”
Product needs to match the traveler
Differentiation remains key for Mexican resorts, whether that means positioning themselves as high-end luxury offerings or offering options to specific types of travelers. Moreno-Nickerson said that’s why Apple Leisure Group has brands for both adult-exclusive travelers and families.
“For us, it’s been very appropriate,” he said. “I’m a father of three, and at the end of the day, I’d like to be able to go on mom-and-dad vacations. You need that space.”
Carbone agreed that differentiation remains key, especially among all-inclusives.
“For a couple, it can be chaotic with 700 children running around the resort or in the swimming pool,” he said. “So we see hybrids with an adult wing and family wing.”
Airlift still dictates potential
Moreno-Nickerson said the reason he’s viewed Airbnb as a disruptive force in Mexico is because each international traveler who opts to stay in accommodations affiliated with that company is occupying one of a limited number of “plan seats.”
“That offer is increasing at a high rate,” he said. “That’s a situation we need to watch for.”