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Bloomberg Reports on Mexico Real Estate Investment Surge

23 January, 2014

More international visitors are heading to Mexico than ever before, prompting a surge of new investment dollars in the commercial real estate market. According to Bloomberg, hotel occupancy rates in Mexico have outpaced numbers throughout the rest of Latin America, driven by a growing middle class, business expansion and the skyrocketing number of new vacationers from destinations around the world.

“Hoteliers and investors are counting on a continued surge in tourism across Mexico,” writes Bloomberg. “Hotel demand in Mexico is increasingly coming from places not traditionally associated with travel to the country.”

This includes a rise in tourism from China, as well as Germany, Italy and France, as well as Russia and other parts of Europe and Asia, according to Ricardo Suarez, vice president of acquisitions at Starwood Hotels. In addition, Orbitz reports that hotel room bookings rose by more than 11 percent during the first half of 2013 and continued to rise throughout the end of the year. In fact, tourism – and consequently the number of international investors looking at new real estate opportunities – is expected to remain big business in Mexico, especially in coastal areas, such as Cancun, the Riviera Maya, Playa del Carmen, Tulum, Cabo San Lucas and Puerto Vallarta.

International visitors heading to Mexico rose by more than 8.4 percent in 2013, while arrivals from China grew by nearly 30 percent and Russian travelers grew by more than 56 percent. Visitors from the U.S. made up around 56 percent of the total number of arrivals by air.

“We believe that the potential for growth in both the business and leisure segments is very strong in Mexico and, therefore, have chosen to invest in the market in order to establish a strong foundation for our brands there,” shared Patrick McCudden, senior vice president of Latin American development and acquisitions for Hyatt, which also announced a $325 million partnership to open new resorts in Mexico last year. In addition, Starwood plans to increase its presence in Mexico by around 30 percent, with eight new properties already in the works.

“Investors are getting more comfortable with putting money into Mexico’s real estate market,” shared Rajiv Trivedi, chief development officer at La Quinta. “As business, employment and the middle class grows, so will travel demand.”

Topics: Real Estate Investment Bloomberg