Hotel Occupancy Booms in Popular Mexico Vacation Destinations

Hotel Occupancy Booms in Popular Mexico Vacation Destinations

Mexico’s economic expansion is stimulating resurgence in tourism. Hotel occupancy rates in the 70 top Mexico vacation destinations climbed to 52.3 percent in the first five months of the year, from 49 percent in 2009. “The very worst seems to be over from last year,” Nuria Jorba Arimany, a credit analyst at Union Bancaire Privee in Zurich, said in a telephone interview. “They have taken the right measures to get a recovery in the company.” 

To focus on a case study, Grupo Posadas, a hotel business in Mexico, said in April, that revenue rose 10 percent to 1.7 billion pesos ($147 million) in the first three months of 2011. Posadas also reported net income of 109.2 million pesos in the January-through-March period, a second straight three- month period of profit, when the occupancy rate at Posadas’ hotels rose to 57 percent from 54.8 a year earlier. “The operational part of the company is improving along with the Mexican economy,” Araceli Espinosa, a debt analyst at Scotia Capital in Mexico City, said in a telephone interview. 

Posadas might attain an average 60 percent occupancy rate in the second half of the year, according to Monica Ponce, a credit analyst at S&P in Mexico City.  “The tourism sector is being reactivated. We aren’t anticipating any more problems like those caused by swine flu and Mexicana. The gains in the economy are starting to be reflected in the tourism industry” said Ponce.

Mexico’s economy may even increase as much as 5 percent this year on top of the 5.4 percent expansion in 2010 that was the fastest in a decade, according to the central bank.