Mexico & Caribbean Continue Upmarket Trend
-- Hotels, 8/1/2007
Despite the controversy around the changing U.S. passport require-ments, Mexico and the Caribbean continue to spark developer interest thanks to strong demand, improved airlift and the overall trend toward upscale development with mixed-use residential. Mexico, particularly its eastern coast, is among the hottest development regions for luxury product. Both Cancun—which has come back even stronger post Hur-ricane Wilma—and the Riviera Maya are attracting luxury hotel chains in increasing numbers. Across the entire area the trend continues to move away from the all-inclusive model into much higher-end proper-ties.“Mexico is probably our best market [in Latin America/Caribbean] by far. All of our brands are doing well there,” says Carlton Ervin, sen-ior vice president, development for Marriott for Latin America and the Caribbean. “The demand for Marriott products runs across the spec-trum.” The company recently signed the Ritz-Carlton Mexico City and, Ervin says, “there is lots of developer interest in Ritz-Carlton in Cabo, Riviera Maya.” Further, the company plans to add two Marriott hotels a year for the next five years in primary and secondary markets. Courtyard, he says, is currently doing two or so hotels a year, but the company is hunting for a “multiunit deal.”
Starwood is also making a stronger push into Mexico, recently an-nouncing the first Westin hotel in Mexico City as well as a St. Regis Hotel Mexico City, St. Regis Resort Punta Mita and Le Meridien Can-cun Resort & Spa. Previously announced projects in the hot Riviera Maya, including concepts by Fairmont, Rosewood, Banyan Tree, and Viceroy, will see the addition of a second Paradisus by Sol Melia as well as the Mandarin Oriental opening this fall. By 2025, officials say, there will be 110,000 hotel rooms on Mexico’s Caribbean coast.
Mixed-use hotel development continues at a brisk pace as well across the Caribbean as hotels there continue to profit from strong in-creases in demand. The region has benefited from an increasingly competitive airline market, as well as increased airlift to both tradi-tional and emerging destinations. As a result, more high-end projects are debuting across the region. “The trend toward upscale is following consumer demand. Today there is a lot more branded product [in the region] as a result of available capital,” Ervin says of the current wave of development in the region. “The [area] is attractive to consumers who are willing to buy that higher end product.”
Operators cite the Eastern Caribbean as among the hottest area for new upscale product, citing markets like Turks & Caicos, St. Lucia, Anguilla and St. Croix. Prime examples include a new, 275-room Ritz-Carlton St. Lucia resort that will also included branded residences and a planned140-room, mixed-use Fairmont resort in Anguilla, which also will include a Jack Nicklaus Golf Club. Puerto Rico and the Bahamas also continue to attract more attention given their close proximity to the U.S. mainland and the lack of passport issues. “Puerto Rico is a great market for U.S. travelers,” Ervin says. “It mixes the exotic with the known and comfortable.”
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