Mexican Hotel Sector Recovering With Good Prospects

In 2021, Mexico ranked as the second favorite destination for tourism worldwide. The country has almost 200 places of archeological interest, more than 100 magical towns, and 34 sites recognized as UNESCO World Heritage Sites. It also has more than 11,000 kilometers of coastline for tourists to enjoy their vacations at the beach.

Tourism represents one of the largest sources of income for the country, second only to international remittances. In addition, tourism favors the empowerment, integration, and income generation of historically marginalized populations such as rural communities and indigenous peoples. Tourism generates more than 4 million jobs and contributes just over 4 percent of the national gross domestic product.

Pillar of the Economy
The hotel industry represents 28.7 percent of Mexico’s tourism gross domestic product (GDP). Each hotel room generates 1.5 direct and three indirect jobs, equivalent to 9 percent of the jobs in the sector. By 2020, despite the pandemic, Mexico was positioned as the seventh-best country for hotel infrastructure in the world.

According to the National Institute of Statistics and Geography (INEGI), the Mexican hotel industry contributes more than 8.7 percent of the national GDP. Although in 2020, hotel occupancy decreased by 28.9 percent, in 2021, it increased by 17.3 percent. Thus, the Mexican hotel sector began 2022 with a promising forecast.

Braulio Arsuaga believes that the hotel industry is essential for Mexico because it generates jobs and is sustainable and avant-garde. Arsuaga is the president of the National Tourism Business Council (CNET), which groups the different hotel chains operating in Mexico. We could mention Meliá Palace, NH Hotels, Barceló, AMResorts, City Express, Grupo Posadas, Hyatt, Brisas, and Grupo Presidente.

Investment in the Sector During 2022
According to the country’s Secretary of Tourism, Miguel Torruco Marques, by the end of February, the sector expects an investment of more than $10 million. Torruco Marques explained that this figure is distributed in 521 projects within the tourism sector. He also stated that more than 75 percent of these projects involve the construction of new hotel rooms.

This investment would generate more than 115,000 new direct and indirect jobs. The state with the most significant investment in the sector is Nayarit, followed closely by Mexico City and Baja California Sur. In addition, the conditions of Yucatan, Guerrero, and Quintana Roo also received part of the investment.

Global Perspective
One out of every ten jobs in the world is supported by the hotel and tourism sector. The sector generates more than 25 million jobs across hundreds of companies in Europe alone. Most of these jobs were eliminated during the pandemic due to reduced flights and biosecurity protocols.

Despite the health emergency, Mexico ranked as the second most visited destination worldwide in 2021. International tourists specifically preferred the state of Quintana Roo, Cancun mainly.

Other favorite destinations, such as France, Italy, Spain, Germany, the United States and Turkey suffered considerable losses. More than 60 percent of tourists preferred to visit other territories. On the other hand, Mexico only sustained a 19.4 percent reduction in international visits during the year 2021.

The Future of the Hotel Sector
The Mexican Republic expects an increase of 22.5 percent in foreign tourism exchange compared to 2021. Likewise, an increase of 25 percent in the number of international visitors is estimated, which will positively impact hotel occupancy. The goal is for the annual average to exceed last year’s figures by 12.9 percentage points.

Miguel Torruco Marqués assured that by the end of the year, tourism consumption would exceed 146 billion. This would be equivalent to an increase of 12 percent over the previous year if international and local spending is added together.

Mexico’s Secretary of Tourism stated that more than 40 million international visitors are expected to arrive. More than 8 million more than the previous year, representing an increase of 25.6 percent.

Remember that after remittances, hospitality and tourism represent the country’s largest source of foreign exchange income. It is expected that in 2022, foreign exchange income from international tourists will exceed 24 million. According to Mexico’s Ministry of Tourism, the average expenditure per international tourist would be approximately $380.

The ideal forecast is to reach 7.1 percent of the national economy. Eventually, the goal is to recover a share above 8.3 percent, just three-tenths of a percentage point below 2019.

The hard work must continue for the remainder of the year. It must be reinforced at the beginning of next year since several international organizations that govern the industry assure that the sector will have to wait until 2023 to see earnings similar to those before the pandemic, derived from travel and tourism.