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Mexico pushes arrivals to record high
Hotel & Motel Management / June 16, 1997

By Larry Luxner

Last month (May), Bill Clinton toured Mexico on his first official trip as president -- adding his name to the 22 million foreigners expected to visit Latin America's No. 1 tourism destination this year.

In fact, Mexican Tourism Minister Silvia Hernández says estimated income from tourism reached $7 billion in 1996, representing 5% of total GDP. Tourism now ranks third, behind manufacturing and oil, as a source of foreign exchange. No one disputes that cheap airfares, renewed investor interest and a weak Mexican peso are combining to push tourist and business arrivals to record highs.

The resulting boom in hotel construction can be seen from Tijuana to Cozumel.

Fiesta Americana, the Mexico City-based chain owned by Grupo Posadas, ranks as the largest hotel chain in Latin America, with 7,996 rooms in 30 properties. Its Fiesta Inn subsidiary will open five new hotels in Mexico this year -- the 121-room Fiesta Inn Monclova, 102-room Fiesta Inn Colima, 126-room Fiesta Inn Naucalpan, 149-room Fiesta Inn Saltillo and the 121-room Fiesta Inn Ciudad Juarez.

Fiesta Americana also plans a $70 million project in the Cabo del Sol development at Los Cabos, on the southern tip of Baja California. The Fiesta Americana Cabo del Sol will be a 27-acre property, consisting of a 250-room hotel and another 350 rooms in 234 single-level vacation ownership units. Completion is set for December 1998.

Nearby, Ritz-Carlton plans its second Mexican property, in Los Cabos, at a cost of $80-100 million. The 350-room Ritz-Carlton Los Cabos, on 20 acres, follows the 1993 opening of the chain's $100 million Ritz-Carlton Cancún. Indeed, with two luxury hotel properties underway and two more planned, Cabo del Sol is becoming a major resort destination. It's also the site of a planned 600-unit Grand Hyatt.

Yet at present, Cancún is still Mexico's most popular beach destination, according to the Tourism Secretariat. During the first nine months of 1996, Cancún received 1.795 million hotel visitors. Other popular beach resorts were Acapulco (1.53 million visitors); Puerto Vallarta (680,000), Mazatlan (576,000), Los Cabos (391,000), Manzanillo (331,000), Ixtapa-Zihuatenejo (308,000), Cozumel (238,000) and Huatulco (125,000).

Meanwhile, hotel occupancies in Ixtapa have jumped to 80-95% from the high 70s and low 80s, says Arturo Galindo, undersecretary of tourism for the state of Guerrero. One reason is the start last November of non-stop flights out of Los Angeles by Alaska Airlines.

Just a few miles from Puerto Vallarta, in Punta de Mita, Four Seasons Hotels & Resorts has broken ground on its first Mexican property. The 100-room resort will be part of an upscale development that'll include three golf courses, as well as owned and timeshare villas and casitas on a 1,800-acre property. Work on Phase I -- a $100 million development covering 400 acres -- began in November.

An unrelated joint venture between Grupo Piasa and U.S.-based Chartwell Leisure Corp. announced plans to develop 30 hotels throughout Mexico; focused toward the busienss traveler, the venture will invest around $114 million.

ITT Sheraton, which now has eight hotels in Mexico including the Maria Isabel Sheraton (Mexico City's largest property, with 700 rooms) has acquired the 239-room, five-star Ambassador Hotel in downtown Monterrey. Likewise, Holiday Inn plans to open seven hotels throughout Mexico this year, says regional marketing director Victor M. González. Besides its own brand, Holiday Inn manages the Crowne Plaza, Express, Select, Garden Court and Sun-Spree chains. The new properties represent a 27% expansion of the Holiday Inn presence in Mexico.

Finally, Carnival Hotels & Casinos in February launched its first Mexican venture, with the opening of the Grand Bay Hotel & Resort Puerto de la Navidad north of Manzanillo, along the Pacific Coast. The $85 million hotel has 191 luxury rooms, with rack rates starting at $450 during high season.

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