Opinion

Last updated: 7th Feb 2012

Mexico continues to be a destination of choice for many visitors around the world.

The country is currently ranked 10th globally in international visitor arrivals and 23rd worldwide in total tourism spend – US$11.9bn in 2010.

Mexico had 22.4m visitors/annualised in 2010 according to the World Travel Organization, and experienced a 3.3% year on year increase during the first six months of 2011. Moreover, the hotel occupancy rate increased by 2.3% during 2010.
Mexico intends to welcomes upwards of 50 million international visitors and become atop five global tourist destination by 2018. Tourism contributes 8.2% of the GDP in Mexico and plays an important role in the economy. Over the last few years there has been an increase in tourists visiting from Brazil, Russia and China.

Interestingly, Mexico is the second most visited country for cruise travellers. During 2010, six million cruise passengers visited Mexico.
Mexico is also well known for having world class luxury resorts. Cancun, Riviera Maya, Los Cabos, Puerto Vallarta and Mexico City all being some of the most popular places to visit in Mexico.

There are currently several major investments being channelled into the sector:

• Baluarte Bridge is a US$1.42bn project set up to improve trade and increase the tourism between the City of Durango and the coastal city of Mazatlan. This project will be finished this year and upon completion will be the tallest bridge in North America, and also the highest cable stayed bridge in the world.

• Tiger Woods Design is opening an 18-hole, 6,835 yard, par 70 golf course as the centrepiece of the Punta Brava community, located in North of Mexico by the Pacific cost. This will be the first Woods designed golf course in Latin America, projected to open during 2013. It will offer views of the Pacific Ocean.

• The Intercontinental Hotels Group has announced that it will open 12 new Holiday Inn, Holiday Inn Express and Indigo hotels in Mexico during 2012. The new hotels will be situated in destinations like Mexico City, Nogales and Guaymas in the state of Sonora, PuertoVallarta in the state of Jalisco and Acapulco in the state of Guerreroas part of a US$500m investment plan geared toward opening 49 new locations in Mexico during the next 4 years.

• Courtyard Mexico City Airport: Marriott International will open its first Courtyard by Marriott hotel in Mexico City at the BenitoJuarez International Airport. The 292 room hotel is estimated to open early this year.

• Mundo Maya 2012 is a program that the president of Mexico launched to increase tourism and promote the Mayan Culture Legacy in Mexico. Up to the 21st of December 2012, when the Mayan calendar officially ends, the Mexican government will promote a variety of events in southeastern Mexico`s “Mayan World”, made up of the states Campeche, Chiapas, Tabasco, Quintana Roo and Yucatan. This regions is home to six of Mexico`s 27 UNESCO World Heritage sites, the most found in any one country in the world.

• National Institute of Anthropology and History (INAH) will open a museum in Cancun next year to spread the archaeological culture of Quintana Roo.

In terms of Merges and Acquisitions there have been 19 M&A sector related transactions in Mexico over the last four years. The most active area is the hotel sector with 11 transactions, followed by five in restaurants and three in leisure. Deal value ranged from US$8 to US$100.
On the back of the aforementioned broad investments we expect elevated M&A activity going forward.

Luis Garcia Diaz
Senior Partner
Sinergia Capital