Head South
Mexico has plenty of opportunity for vacation ownership.
With its diversity of tourist destinations, rich gastronomy and natural surroundings, it’s no surprise Mexico is a top vacation spot for travelers from the U.S., Canada, Europe and other countries. While the U.S. dollar has strengthened against the Mexican peso recently, this has had a very limited effect on tourism and the vacation ownership industry in Mexico. Los Cabos, Riviera Nayarit/Puerto Vallarta and Cancún/Riviera Maya – the Mexican destinations U.S. travelers head to most – are largely unaffected by currency fluctuations because transactions for products and service are mostly conducted in U.S. dollars.
Exchange-rate fluctuations may even lead to a favorable outlook for vacation ownership. “The strong dollar has opened an interesting window of opportunity for timeshare developers, since they can build using a qualified workforce and construction materials acquired in pesos that will be monetized in dollars,” says Juan Ignacio Rodríguez, vice president of business development and operations for RCI Latin America. Development opportunities and operational advantages exist in areas where the U.S. dollar is not the only currency accepted, Rodríguez adds, such as Mazatlan, Ixtapa and Huatulco. According to Rodríguez, in these regions, there are many businesses that transact in pesos, but the U.S. dollar is accepted in all cases.
Despite the socio economic challenges, there is a wide array of opportunities for the vacation ownership industry. According to “Analysis and Perspectives of the Vacation Ownership Latin America and the Caribbean” (a publication of RCI Latin America), in 2016 alone, 20 new resorts were added – including eight in Cancún – and sales are up 7% over 2015, with an average $19,000 USD timeshare membership price. That figure has remained steady with little variation over the last five years, regardless of the exchange-rate fluctuations, says Rodríguez. Overall tourism continues to thrive as well. The Mexico Tourism Board reported that international tourist arrivals in 2016 surpassed 34 million, a 9 percent increase over 2015.
In response to the tourism growth and a strengthening dollar, vacation ownership in Mexico has evolved and diversified. “More than 15 new projects will open in Los Cabos in a mere 24 months.” Rodríguez says. “In addition, Cancún /Riviera Maya has grown at an average of 5,000 guest rooms annually over the past five years, with no impact on occupancy.” Even with a weakening peso, the forecast remains sunny for both vacation ownership and tourism in Mexico.
