The dynamic development of Mexico`s tourism

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The
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of Mexico’s
tourism
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Mexico’s tourism industry is
in a dynamic growth mode
Mexico’s tourism industry, and the country’s economy overall, are in a powerful growth
mode. Travel Weekly asked Gerardo Llanes, chief marketing officer of the Mexico Tourism
Board, to discuss how these dynamics are shaping investment in the country’s travel and
tourism infrastructure.
Gerardo Llanes,
Chief Marketing
Officer, Mexico
Tourism Board
Q. According to Sectur, tourism
investment in Mexico for Q1 2011
was up 127% compared with the same
period in 2010. What are the marketplace dynamics behind this significant
increase in tourism investment?
A. This is essentially due to supply and
demand. From January through July 2011,
1.35 million international tourists traveled to
Mexico, a 3.5 percent increase year over year.
The more people who travel here, the more
infrastructure is required. At the same time,
Mexico’s tourism industry is undergoing a
significant diversification.
Q. What business sectors are the
primary contributors to the increase
in tourism investment?
A. Certainly the hotel industry—approximately
$1.5 billion will be spent on new hotel developments in Mexico by a variety of companies
in the next few years. Major global hotel
chains are opening and redeveloping hotels
across the country in a significant way including Intercontinental Hotel Group (IHG), Rosewood, Hilton, Hyatt, W Hotels, Ritz Carlton,
AM Resorts, Four Seasons, and Sol Melia.
Q. What do these investment figures
and infrastructure projects indicate to
you about the health of Mexico’s tourism
industry?
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A. Across various categories—from tour operators, airlines, resorts and cruise lines to attractions—the first three months of 2011 have
proven to be a time of growth and continued
prosperity for Mexico’s tourism industry. In
fact, there are many exciting developments
happening in Mexico’s tourism industry each
and every day.
Q. Mexico’s economy grew 5% in Q1
2011, and the 2010 annual growth rate
was 5.5%, the highest in 30 years. How
does the health and growth orientation
2
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of Mexico’s economy overall affect
tourism development?
A. Mexico offers an attractive destination for
foreign direct investment (FDI) and opportunity for business growth. Mexican authorities predict foreign investment in the tourism
sector will amount to $3.5 billion and generate
a capital inflow that will create about 20,000
jobs in that sector, over the next three years.
Q. What role does the growth of Mexico’s
tourism industry play in the strength of
the country’s economy overall?
A. Tourism is one of the most important industries in Mexico and represents the third largest
portion of Mexico’s gross domestic product.
Mexico is currently ranked 10th globally in
international visitor arrivals. Mexico is the only
Latin American destination in the top 10 for
international visitors, and second after the U.S.
in top visitor arrivals in the western hemisphere.
Q. There are a number of infrastructure
developments and renovation/restoration
projects underway in Mexico that will
have an impact on the travel and tourism experience. How extensive are these
projects?
A. As a result of the signing of the Conventions of the Reallocation of Resources, 1.67
billion pesos (about $US125 million) has been
allocated to states throughout the country,
which will trigger investments of 3.27 billion
pesos (about $US245 million) in the improvement of tourism infrastructure. A total of 263
infrastructure improvement projects have
been launched in 171 municipalities.
These resources will improve services as
well as the quality of the urban image in the
country’s tourism destinations. Specifically,
Mexico plans to invest 60 million pesos (about
$US4.4 million) on highways in Guerrero in
order to generate more tourist flow to Ixtapa
Zihuatanejo.
mexico:
investing in
the future
diversification
is key to growth
Mexico is focusing on a strategy
of diversification to expand the destination’s image internationally and promote
the country’s diverse cultural and natural
attractions.
“Mexico’s tourism industry is undergoing
a great and stunning renaissance predicated on a bold strategy of diversification
that includes tourism products and also
the diversification of tourists themselves,”
said Gerardo Llanes, chief marketing office
of the Mexico Tourism Board.
“We are committed to diversifying Mexico’s tourism portfolio beyond the sun and
beach destinations it is known and loved
for. Mexico has a plethora of different
geographies and activities for the mature,
sophisticated global traveler.”
Part of the commitment to diversifica-
San Miguel de Allende,
a World Heritage site
Educate Your Clients
“
“Mexico is committed to
diversifying its tourism
portfolio beyond the sun
and beach destinations it
is known and loved for.”
—Gerardo Llanes
tion includes, “promoting one-of-a-kind
traditional and historic towns in Mexico,”
Llanes said.
“Of particular interest is ‘Mundo Maya’
or Mayan World, a celebration of the end
of the ancient Mayan calendar (12/21/12).
Southeast Mexico—including the five Mayan states of Yucatan, Campeche, Tabasco,
Quintana Roo and Chiapas—will be ground
zero for the festivities,” he said.
“This creates an opportunity to position
Mexico as a rival to other iconic cultural
travel destinations like Egypt, China or Italy.”
A Wealth of
opportunities
Mexico is world-renowned for
its beaches, and the resorts along
the coasts are where most U.S. travel
agents send their clients. But the
Mexican Tourism Board wants agents
to know that the country has so much
agent-to-agent
more to offer.
“Mexico has a broad, diverse and
dynamic tourism product,” said Alfonso
Sumano Lazcano, director of the Americas for the Mexico Tourism Board.
“This is excellent news for travel agents
and for the consumer—the global traveler,” he said. “Travel agents have a host of
products, destinations and competitively
priced packages to offer their customer
base, and the consumer has the opportunity to indulge in the very best Mexico has
to offer at vastly competitive rates.”
Here’s a quick look at some of Mexico’s offerings beyond the beaches:
¢ Mexico possesses a unique and
intriguing cultural history, exemplified by
myriad sites and ancient cities.
¢ Mexico has 110,000 historical monuments, 30,000 archaeological zones, 37
World Heritage Sites, 62 ethnic groups,
and 3,000 years of history.
Mexico is a passion of mine.
There are six of us in our office.
We go there often to do hotel
inspections. We go by ourselves,
get in taxis and go to the hotels.
We would not be doing this if
we didn’t feel safe; all of us have
families.
I would never let my clients
travel anywhere that I didn’t personally feel comfortable going
myself. I think the country has
gotten a bad rap. It’s the media
wanting to create sensational
headlines. Yes, a lot of our clients do express concerns about
safety in Mexico. We try to educate them as best as possible.
Our job as travel professionals
is to educate the public about all
the benefits of Mexico.
”
—Mary Jo Nelson,
owner, Travel Partners,
Sioux Falls, S.D.
¢ Mexican cuisine was designated an
Intangible World Heritage by UNESCO.
¢ Mexico places in the top 20 position
or above in the Anholt-GFK Roper Nation
Brand Index for “rich historic landmarks”
and for “vibrant city life” as well as for its
“natural beauty.”
¢ Mexico is one of the most biologically
diverse places in the world, ranking first
in reptiles, second in mammals and 10th
in birds.
¢ According to a June 2011, Conde Nast
Traveler poll, Mexico
has 19 of the top 250
spas, globally.
Alfonso
Sumano Luzcano,
Director of
the Americas,
Mexico Tourism
Board
Discover more at www.visitmexico.com
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mexico:
investing in
the future
Microtel Inn Mexicali
Mexicali,122 rooms, Nov. 2011
•
Courtyard by Marriott
Hermosillo, 130 rooms, 2012
•
•
Building Boom
Holiday Inn
Express
Chihuahua
An estimated $1.5 billion worth of
activity in Mexico’s hotel construction pipeline will add 90 hotels
and 12,000 rooms to the country’s
accommodations landscape between
2011 and 2015. This map provides a
snapshot of key hotel developments
through 2012.
Chihuahua,126 rooms,
Mar. 2012
La Quinta Inn &
Suites Chihuahua
Holiday Inn
Express
Guaymas
$$
under
construction
Chihuahua,100 rooms,
Mar. 2012
Guaymas,
127 rooms,
Dec. 2011
The dynamic growth mode
of Mexico’s tourism industry
is evident in the amount
and variety of infrastructure
development underway, including new hotel construction
and destination renovation
projects.
•
La Quinta Inn & Suites Reynosa
Reynosa, 106 rooms, Mar. 2012
•
Holiday Inn Express
Monterrey Plaza Tanarah
Sources: Hotel pipeline data
provided by STR Global.
Civic infrastructure project
information from Travel Weekly
research.
Monterrey, 170 rooms, Mar. 2012
St Regis Hotel
& Residences
Puerto Los
Cabos
••
San Jose Del Cabo,
200 rooms,
Jan. 2012
Grand Solmar
Land’s End
Fairfield Inn Resort & Spa
Los Cabos
Los Cabos, Feb. 2011
Cabo San Lucas,
128 rooms,
Nov. 2011
Key Infrastructure Projects
Hotel Tourism Corridor restoration, Mazatlan.
Focusing on the ‘Golden Zone’ resort district, Phase II of the restoration is a
combined effort by local, state and federal governments totaling about $5.4
million. In progress.
Old Mazatlán Historic District Project. Public and private investment of more than $32 million has been made to date to refurbish
the historic central district that was once Mazatlán’s commercial center.
Congress and Convention Center Queretaro (QCC).
Opened in February 2011 after an investment of $51.6 million, with a total
of 354,778 square feet from meetings, conferences and expositions and the
capacity to host up to 9,000 people.
Global Entry kiosks, San Jose del Cabo International Airport (SJD). Beginning in May 2012 the kisoks will allow
pre-approved low-rish travelers to avoid standing in line and proceed for
expedited customs clearance.
Malecón renewal project, Puerto Vallarta. The old
town’s iconic waterfront, locally known as the Malecón, will be renovated to
include pedestrian-friendly public space as part of a 20-year strategic plan
to upgrade a series of tourism-related areas. Opening October 2011.
Convention center, Riviera Maya. Experiencias Xcaret has fi-
nalized plans to construct a state-of-the-art convention hall that will hold up
to 1,200 people; the adventure destination also announced a multi-million
dollar investment in its eco-adventure programs.
Expo at Mundo Imperial, Acapulco. A private group is
investing $28.3 million to build a new meeting and convention center in
Acapulco’s Diamond Zone, including 355,000 square feet of meeting and
exhibit space. Completion is scheduled for early 2012.
•
Wyndham
Mazatlan
Mazatlan,
68 rooms,
Nov. 2011
Park Inn Tamazunchale
San Luis Potosi, 69 rooms, Oct. 2011
•
San Luis Potosi, 120 rooms, Nov. 2011
Westin Guadalajara
Guadalajara, 250 rooms, Sept. 2011
Holiday Inn Express
Guadalajara Aeropuerto
Guadalajara, 150 rooms, Mar. 2012
•
Hampton Inn Guadalajara Expo
Guadalajara, 120 rooms, July 2012
Wyndham Garden
Hotel Colima
•
Colima, 93 rooms,
Nov. 2011
Courtyard by Marriott Toluca
Toluca, 182 rooms, Nov. 2012
Holiday Inn Express
Toluca Galerias
Metepec, 76 rooms, Nov. 2011
Courtyard by Marriott
Leon @ The Poliforum
•
Leon, 140 rooms, July 2012
Queretaro,
120 rooms,
2012
Holiday Inn
Express
Cuernavaca
Cuernavaca,
70 rooms,
Mar. 2012
Tlalnepantla, 120 rooms,
June 2012
Doubletree
Merida Yucatan
•
• •
•é
• •
Fairfield
Inn
Staybridge
Suites Poza Rica
Poza Rica, 160 rooms,
Dec. 2011
•
Playa del Carmen, 512 rooms,
Nov. 2011
Mexico City, 223 rooms, Jan. 2012
Mexico City, 292 rooms, Mar. 2012
•
Paradisus Playa del
Carmen La Perla
Hampton Inn
Ciudad del Carmen
Puebla, 80 rooms, Nov. 2011
Puebla, 120 rooms, June 2012
Ciudad del Carmen,
120 rooms, Nov. 2011
Holiday Inn Acapulco La Isla
•
Secrets Huatulco
•
•
••
Paradisus Playa del
Carmen La Esmeralda
Marriott Mexico City Santa Fe
Courtyard by Marriott
Mexico City Airport
Ikal Cancun
Resort & Spa
Punta Maroma, Cancun,
493 rooms,
86 rooms,
Nov. 2011
June 2012
Mexico City, 110 rooms, Nov. 2011
La Quinta Inn & Suites Puebla
Acapulco, 101 rooms, Jan. 2012
Merida, 100 rooms,
Dec. 2011
Inter-Continental Presidente
Santa Fe Mexico
Holiday Inn Express Puebla
•
Capella
Bahia
Maroma
Hotel Ibis
Tlalnepantla
Hotel Ibis San Luis Potosi
•
Playa del Carmen, 394 rooms,
Nov. 2011
Viceroy Mayakoba
Playa del Carmen, 136 rooms,
June 2012
Holiday Inn
Express Chetumal
Chetumal, 80 rooms,
Feb. 2012
Hilton Garden Inn
Tuxtla Gutierrez
Tuxtla Gutierrez, 167 rooms, Sept. 2011
Holiday Inn Express
Tuxtla Gutierrez
Tuxtla Gutierrez, 84 rooms, Nov. 2011
Bahias de Huatulco, 399 rooms, Nov. 2011
Discover more at www.visitmexico.com
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mexico:
investing in
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agent-to-agent
Safety Matters
“
When we get questions
about safety and security,
we tell our clients that the resort areas in Mexico are very
safe, probably more so than
south Texas. But, we don’t
want them to think we are
giving them the brush-off, or
just giving them a standard
response to get the sale.
The fact is, we want our clients to be comfortable with
a destination, and we want
them to have confidence in
us and in our professional
knowledge of the world situation. We take all of our clients’
concerns about safety very
seriously. One of the things
I mention to clients is that
I’m planning a destination
wedding in Mexico for my
brother next June. That’s
a pretty strong statement
about my feelings for travel
in Mexico.
”
—Becky Jones, owner,
Becky Jones Travel Inc.,
San Antonio, Texas
getting there:
key trends in u.s.
airlift to mexico
Airlift to Mexico is steadily climbing
back up to cruising altitude after a rocky few
years following the loss of Mexicana Airlines.
Noteworthy recent developments include
Southwest Airline’s code-share arrangement
with Mexican low-fare airline Volaris. And,
within the last year, Virgin Atlantic introduced
service from San Francisco to Los Cabos and
Cancun, and from Los Angeles to Cancun.
The airline adds its third Mexican market in
December when it starts service from San
Francisco to Puerto Vallarta.
“We’re based on the West Coast, so it was
natural to launch our new service to Mexico
from here. We also have a lot of folks connecting to Mexico from our flights from the
East Coast,” said Abby Lunardini, VP of corporate communications for Virgin America.
We’re pretty happy with the bookings to date,
and the positive trends we’re seeing overall,”
she says.
For additional trends and an overall outlook
on airlift to Mexico, Travel Weekly spoke with
noted industry analyst, Henry Harteveldt,
cofounder of Atmosphere Research Group in
San Francisco.
Can you give us an overview of what
airlines currently have service to
Mexico from the U.S.?
Harteveldt: Right now you have American, Delta—which is doing some creative
code-sharing with Aeromexico—United,
Continental, Alaska, Frontier, Virgin America,
Southwest—through its code-share with
Volaris—US Air, Jet Blue, Spirit and Allegiant,
which is in the charter market.
What are the primary U.S. gateways?
Harteveldt: The major gateways are essentially the major airline hubs in the country,
such as New York, Atlanta, Dallas-Ft. Worth,
Houston and Los Angeles. U.S. Air is operating a lot of flights to Mexico from its Phoenix
hub. There has also been some growth out
of Florida, from cities such as Ft. Lauderdale,
Orlando and Tampa down to Cancun and
Cozumel.
What are the current pricing trends?
Harteveldt: Fares are trending up, but not
quite as aggressively as we’ve seen with
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major hotel
Brands expand
in mexico
There’s positive news on a
number of fronts when it comes to
the hotel scene in Mexico. Hotel
occupancy is on the upswing in key
destinations, and there’s some $1.5
billion dollars worth of activity in the
new hotel construction pipeline.
According to the research firm STR,
90 hotels presently in the planning
or construction stages in Mexico are
poised to add an estimated 12,000
rooms to the country’s hotel landscape between 2011 and 2015.
Here’s a look at some expansion plans in Mexico by major U.S.
brands.
Marriott International, Inc. is
among the major chains in the midst
of substantial expansion in Mexico.
The company plans to add 11 new
hotels and nearly 2,000 rooms to its
portfolio in the country.
“Mexico is one of the most
benito juarez
airport in
mexico city
fares in the domestic market. It’s a very delicate environment right now. When Mexicana
folded, it resulted in less capacity and less
competition. That gave airlines pricing power,
and they are definitely trying to raise fares.
But, the challenge is that Mexico is such a
budget-friendly destination that airlines can
only increase fares so much before bookings
fall. And, of course there are factors such as
the media coverage of violence in Mexico.
Americans are terrible with geography, and
they assume that all of Mexico is affected by
the violence. So, that obviously puts downward price pressure on airlines, hotels and
tour operators.
Are there any developments emerging that could influence air lift from
the U.S. to Mexico in the future?
Harteveldt: There are a few factors to
watch. One is the progression of Mexico as a
manufacturing center. As that manufacturing
base gets stronger, airlines will have to add
more service to cities in the northern part of
the country. Another segment where Mexico
is strong is in energy and minerals. The country has tremendous natural resources. Airlines
may eventually have to add lift to accommodate American business travel involving those
industries. There could be some opportunity
for growth as far as business travel goes,
which in turn will create even more opportunities for agents with a good understanding
of Mexico.
agent-to-agent
See For Yourself
“
We’re always down there. I think
that’s the strongest statement I can
make in response to my clients’ safety
concerns about Mexico. I have agents
there twice per month walking around
the beaches, navigating the excursions
and activities. We speak to our clients
intelligently and with experience about
the security issues. Another factor is
that Mexico is an incredible value right
now. I had clients looking at a Bahamas
package for six nights at $1,800 per
person. But, they decided to book the
Riviera Maya instead, for $1,299 per
person, and it became a group booking. If you have confidence in answering
your clients’ questions about security in
Mexico, it can present a lot of opportunities right now.
”
— Lynn Farrell, president,
Foremost Travel & Tours, Chicago
What it Means for Travel Agents
New customer base
“You have brands coming in at a lower price point, because they are not necessarily on
the beach. These hotels are appealing to the customer who wants to design a vacation
themselves, as opposed to a packaged experience. That opens up a different customer
base, and agents should get on top of that.”
—Patrick Ford, president, Lodging Econometrics
Beyond the resorts
“Mexico is a big country, just like the U.S. It has a diversified economy with leisure
centers and corporate centers. Recognized brands are coming in throughout Mexico, and
this should really help travel agents, especially if they have customers interested in areas
beyond the resorts.”
—Jeff Lugosi, SVP, PKF Hospitality Research
important hotel markets in Latin
America. To date we have 18 hotels
open under five of our brands; we’ll
have 19 at the end of October with
the opening of the Fairfield Inn Los
Cabos and 22 by the beginning of
next year,” says Alejandro Acevedo,
VP of international hotel development
for Caribbean/Latin Ameria, Marriott
International.
In the works for Marriott are projects under the Ritz-Carlton, Marriott
Hotels & Resorts, Courtyard by Marriott, Fairfield Inn and Editions brands
in destinations including Los Cabos,
Mexico City, Toluca, Leon, Hermosillo
and Queretaro.
“Our global growth strategy has
been to open hotels in the gateway
cities and primary resort destinations,
and then expand within the country.
That strategy has been consistent in
Mexico and will continue to be the
case in the future,” said Acevedo.
Hilton Worldwide is also making
news with Mexico expansion plans.
The company opened DoubleTree by
Hilton Queretaro and Hilton Garden
Inn Tuxtla Gutierrez, Chiapas in 2011.
“Our commitment to expanding all
of our brands in Mexico is authentic. We have 23 hotels and resorts
throughout Mexico, and by the end
of 2012 we anticipate opening another eight hotels and resorts,” says
George Massa, VP and managing
director of development, Mexico, for
Hilton Worldwide.
According to Massa, three of the
new properties will be under the DoubleTree by Hilton brand, three will be
Hampton Inns by Hilton, one will be a
Hilton Resort, and one will be a Hilton
Garden Inn. The properties will be
located in destinations ranging from
Mexico City to Puerto Vallarta, Los
Cabos, Guadalajara, Merida, Saltillo
and Ciudad del Carmen. By 2015 the
company anticipates a presence of
more than 60 hotels in Mexico, says
Massa.
In addition to Marriott and Hilton,
the InterContinental Hotels Group
(IHG) is also in the midst of a major
push in Mexico. The company will
add 47 new properties and close
to 5,000 new rooms in the next five
years, primarily under its Holiday
Inn Hotels and Resorts and Holiday
Inn Express brands in commercial
destinations throughout central and
southern Mexico.
And, W Hotels is set to open the
new 132-room W Santa Fe in 2012,
as part of the new mixed-use Liberty
Plaza development in the Santa Fe financial district of Mexico City. Featuring branded W amenities, the project
is designed by Pritzker prize-winning
architect Richard Meier. Discover more at www.visitmexico.com
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