Mexico is quickly becoming more than just one of the world’s hottest vacation destinations (although it is definitely that as well),but the nation’s booming tourist industry is responsible for several recent stock recommendations from Zacks and NASDAQ. In fact,the number of visitors flying into Mexico from around the world has risen sharply,giving a tremendous boost to air traffic,both domestically and internationally.
“The Mexican economy was the hottest in North America in 2012 with GDP growth around 4 percent,” writes Zacks. “Unemployment is just 4.5 percent,the lowest in four years.”
All of this growth has spurred an expansion among the nation’s middle class and a major uptick in Mexico real estate development and purchases,which has led to a booming travel industry. Of course,the country’s most popular resort areas have seen the most significant jump in visitors. The Cancun International Airport,for example,saw domestic traffic grow by at least 25 percent in 2012,which is good news for pending plans to add a second international airport to the Riviera Maya region just south of Cancun in Tulum. In addition,the major industrial city of Monterrey reportedly saw domestic traffic rise by more than 8.7 percent last year.
“The airport operators are an interesting niche way to play Mexico’s continuing growth,” shared NASDAQ. “Economists expect Mexico’s GDP to grow another 3.5 percent in 2013. Analysts also expect airport traffic to continue to rise.”
Conveniently,the three companies that have come to dominate Mexico’s exploding airport market over the last ten years,all of which have come to dominate specific geographical regions,are all listed on the American stock exchanges. First,Grupo Aeroportuario del Suereste (ASR),which is also commonly known as Asur,operates nine airports in southeastern Mexico,including the major tourist hubs of Cancun,Cozumel and Merida. According to Nasdaq,Asur’s stock has been “on fire” for the last decade,returning more than 1,000 percent since 2003 alone!
“The Mexican government has been intending to build a new international airport near the city of Tulum at the southern end of the Riviera Maya since 2006,” writes Zacks. “In 2011,it was taking bids from domestic and international companies for both the construction and operation of the new airport. There are still plans for the airport.”
Another recommendation from NASDAQ and Zacks is Grupo Aeroportuario del Centro Norte (OMAB),which is otherwise known as Oma and operates 13 airports in Mexico’s central and northern states,including the booming industrial city of Monterrey. This is followed by Grupo Aeroportuario del Pacifico (PAC),commonly known as Gap,which operates 12 airports in Mexico’s Pacific region,including the tourist destinations of Puerto Vallarta and Cabo San Lucas.