Mexico’s Hotel Boom: Why More Rooms Mean Profit

QUINTANA ROO — Despite the addition of more hotel rooms generating intense internal competition that is already impacting occupancy levels, tourism officials have agreed that investment cannot be turned away, stating that the construction of new resorts in the Mexican Caribbean remains profitable.

The constant increase in the number of hotel keys is frequently cited as the reason for not surpassing 80 percent occupancy. The state's Secretary of Tourism, Bernardo Cuenta Riestra, maintains this position, indicating that far from representing a stagnation, the figures reflect the sustained expansion of the tourism infrastructure.

The official has even pointed out that achieving 85 to 90 percent occupancy five years ago is not the same as the hospitality sector now achieving 75 percent, as there is a greater number of rooms and new hotels are added each year. This, he stated, signifies that the Mexican Caribbean continues to be profitable.

The president of the Cancún, Puerto Morelos, and Isla Mujeres Hotel Association, Rodrigo de la Peña Segura, downplayed the fact that occupancy rates are decreasing each year, noting that there is currently fierce internal competition due to the increase in new rooms.

However, when addressing voices calling for a halt to hotel construction in favor of other tourism products to diversify the industry, he stated that investment cannot be shut out because it ultimately implies development and is a signal that the destination is competitive.

The president of the Riviera Maya Hotel Association, Tony Chaves Palomo, asserted that the drop in occupancy is due to a multitude of factors, including greater competition from new hotels and vacation rentals; thus, the same pie is being divided among more participants.

Nevertheless, he also concurred that having greater hotel infrastructure is part of the tourism activity; therefore, all investment is welcome. Furthermore, those who invest conduct their studies, which means the destination is profitable.

In turn, the executive director of the Association of Vacation and Tourist Complexes (Acotur), Jesús Calahorra, admitted that having a larger hotel infrastructure in the state is generating intense competition, making it more difficult to achieve occupancy rates above 80 percent.

"We are not only competing with the rest of the world's destinations, but among all the options available in the Mexican Caribbean, which is why more is now being invested in promotion and strategies are being innovated to meet goals; these are the challenges of tourism," he said.

He also rejected the idea that construction of more resorts should stop simply because it is more complicated to fill hotels as new rooms are added daily, stating that this reflects how attractive Quintana Roo remains for new brands.