Investing in Mexico

One of the world’s top 10 tourist destinations, Mexico boasts a robust tourism industry. This high-growth sector is driven basically by two factors: international travelers and their preference for Mexico’s sunny climate, spectacular beaches and singular attractions, and Mexico’s National Trust Fund for Tourism Development, known by its Spanish acronym, FONATUR.

FONATUR has boosted the nation’s tourism sector, and generated much needed foreign revenue, through resort planning and development, including the beach resorts of Cancun, Ixtapa, Los Cabos, Huatulco, Loreto and the new Litibu. Known in FONATUR parlance as “Integrally Planned Resorts,” or IPRs, these tourism magnets offer investors myriad opportunities to invest in one of Mexico’s best-performing industries.

Cancun

An unqualified winner, both in terms of visitor satisfaction and return on investment, FONATUR’s first IPR has been a resounding success. It was launched in 1974 and little more than 30 years later, has turned into Mexico’s most renowned beach resort, with an efficient modern infrastructure and an amazing array of tourism services and facilities. Cancun welcomes more than 3 million visitors a year — its airport is the country’s second busiest — and continues to grow and evolve. Land access has been improved with the expansion to four lanes of the Cancun-Xcaret roadway, and the linking of Merida and Cancun via a modern highway.

Ixtapa

FONATUR’s second IPR and the first tourism project to be funded by the World Bank, Ixtapa went into operation almost simultaneously with Cancun, in 1974. Its proximity to Mexico City helped take some of the pressure off nearby Acapulco and it soon experienced a booming real estate market for houses, condominiums and timeshares. A family-friendly destination, as well as a popular choice for incentive and convention travel, Ixtapa is strongly positioned in the US and Canadian markets. To attract more upscale tourism, FONATUR is diversifying the resort’s recreational activities and tourism services through the promotion of golf and sport fishing, and the construction of a cruise dock, boutique hotels, spa, villas, residential developments, and beach clubs.

Los Cabos

In 1976, FONATUR launched its third IPR, Los Cabos. Close to the Canadian and US west coasts, its natural attractions are complemented by a state-of-the-art marina and nearly 10 excellent golf courses, where more than 200,000 rounds are played annually. Mexico’s golf capital has a huge potential market, being a stone’s throw from millions of golfers in the US southeast and west coast. Los Cabos is a popular vacation destination for upscale travelers, mainly from California, Arizona, Texas, New Mexico, Washington, Colorado and New York, thanks to its numerous luxury and five-star hotels. To guarantee this IPR’s top performance, FONATUR has taken key steps to upgrade the urban infrastructure.

FONATUR plans to make the most of Los Cabos’ strategic location: as Mexico’s second most important cruise harbor, it is considered essential towards the consolidation of the sailing (and golf) segments, and will form part of a nautical network of marinas being developed all along the Sea of Cortez.

Loreto

Located in the center of the Baja California Peninsula, on the Sea of Cortez, this IPR is comprised of three areas: the traditional town of Loreto, which was founded by Jesuit priests and boasts an old mission; the Nopolo tourist zone, which features 4.6 km of beaches and a natural oasis called Primera Agua; and the Puerto Escondido marina, which has been earmarked to form part of the nautical network of marinas along the Sea of Cortez. International developers saw in Loreto the perfect site to build a mega residential-resort development designed to be ecologically sustainable. The Villages of Loreto Bay, an 8,000-acre seaside community neighboring the historic town of Loreto, was showcased in late 2008 on the Home and Garden Network’s (HGTV) nationally broadcast TV series, “House Hunters International.”

By the year 2012, development projects now underway are expected to draw 113,500 new international tourists and 224 million pesos in foreign revenue. Aware of international trends in tourism, FONATUR is grooming Loreto to meet the demands of the sailing, health and golf travel segments, as well as ecotourists and nature lovers.

Huatulco

Located on Oaxaca’s coast, the Huatulco IPR is comprised of nine bays surrounded by majestic mountains, valleys and hillsides kept lush by the Coyula, San Agustin and Copalita rivers. The project to turn this paradisiacal landscape into FONATUR’s fifth master-planned beach resort was launched in 1985. Today Huatulco has 2,597 hotel rooms that represent 50% of the destination’s projected hotel capacity, and a spectacular 18-hole golf course, and has set its sights on the world cruise ship market by opening the Santa Cruz Cruise Dock, which can simultaneously receive up to two ships with an average of 3,350 passengers, plus 1,100 crew members, each.

Huatulco is more accessible than ever thanks to both domestic and international Canadian, US and British carriers. The transportation ministry is working hard to expand ground access by modernizing and enlarging several roadways, one of which will cut driving time between the beach resort and Oaxaca City from 6 and a half hours to 3 and a half hours.

A certifiably green destination, Huatulco has received Green Globe certification four years in a row. While the goal is to double the current hotel offer with 2,500 additional rooms, reaching 5,000 rooms during the present administration, it’s all to be achieved by means of sustainable, high-quality, low-density development that is kind to the environment.

Litibu

The youngest of FONATUR’s IPRs, Litibu is just beginning to take shape on Mexico’s verdant Pacific coast, in an area known as the Riviera Nayarit. Located just north of renowned Puerto Vallarta, portions of this slice of coast have already been claimed by several major hotel chains. Real estate opportunities here are abundant, with land earmarked for everything from boutique hotels to beachfront villas and condominium towers.