Mexico has historically been a country that is sensitive to global, geopolitical shockwaves, and hoteliers in the country say they need to prepare for issues like ongoing trade tensions and the spread of the new strain of coronavirus.
Editor’s note: All quotes in this story were derived from presentations at the Mexico Hotel & Tourism Investment Conference that were conducted in Spanish and translated by event staffers in real time.
MEXICO CITY—The Mexican hotel industry is currently awash in both risk and opportunities, according to a panel of experts at the 2020 Mexico Hotel & Tourism Investment Conference.
Speaking during the “Industry priorities” session, Ricardo Zuñiga, director general of Vertex Real Estate Investors, said hoteliers in Mexico need to be aware of the various issues presenting challenges around the globe, including trade wars and concerns over the new strain of coronavirus (COVID-19).
“We’re in a lake with a lot of black swans swimming,” he said. “Mexico is never exempt from geopolitical risk or external shocks. It seems like there are many swimming in the lake we’re operating in, and we need to keep them on our radar and keep (their effects) limited.”
Grupo Posadas CEO José Carlos Azcárraga acknowledged the risks, but said there are still opportunities within Mexico.
“The future of tourism is promising, and there are very few industries where you can say that,” he said. “Mexico can be very attractive (to investors), and we are next to a very important market, which is the U.S.”
He said Mexico has an inherent competitive advantage over other countries with its “history, weather, people, service quality, product quality” and spirit of entrepreneurship.
He said those facts need to be continually underlined to governmental bodies so they can see the value of expanding tourism.
“Mexico needs tourism,” he said. “It has a lot of benefits that governments are looking for. It brings good employment with good development. Tourism plays a key role, and (the government) doesn’t understand that yet and isn’t acting upon it.”
Panelists expressed disappointment that President Andrés Manuel López Obrador dissolved the Mexico Tourism Board, which was the primary body in charge of marketing the country and its destinations abroad.
Azcárraga said the private sector will need to step up to fill that gap.
“A lot of things depend on us,” he said, referring to Mexican hoteliers. “We have to go through process where we can (show) the big important thing for Mexico is tourism.”
He acknowledged, though, that individual companies can only do so much, and organizations like the tourism board give those companies’ marketing efforts “structure and clarity.”
“We’re talking to authorities so they can understand that message and what needs to be done,” he said.
Roberto Kelleher, director general of Inmobilia, said he’s hopeful for Mexico’s hotel industry, as intuitional investment and debt markets continue to grow in the country.
“What matters is (investors) have entered the market and had good returns and they like it,” he said.
What the country continues to need, Zuñiga said, is more sophisticated local investors across the board, although the market continues to see more sophisticated operators.
He predicted that in five to 10 years, the country’s capital markets will have “more players” and deeper selections of products.