Hotel Brands Want to Be in Mexico But Investors Look Elsewhere
Photo Credit: Relatively strong pandemic performance in Mexico may attract brands, but investors want the discounted pricing that comes with a troubled asset. Pixabay / Michelleraponi
Skift Take
The large supply of independent hotels in Mexico is a massive opportunity for companies like Marriott and Hilton to quickly beef up their portfolios without the drawn-out process of new construction. Investors, however, will likely favor markets that performed worse during the pandemic.
Mexico, with more than half its hotel stock marked as independent, should be a hunting ground ripe for major brands to swoop in and make deals.
While international tourist arrivals dropped 74 percent last year around the world, they were down a more modest — albeit still extreme — 46 percent in Mexico, according to JLL. This largely stems from Mexico’s open borders to travelers arriving by air.
No matter the hotel company, they’ve all spent the better part of the last year touting the benefits of brand affiliation coming out of the pandemic and laying out a strategy for wooing independent hotel owners. A bigger brand’s name recognition, loyalty program, and global distribution platform would help a property quickly get back to pre-pandemic performance, the thinking goes.
But real estate experts note wooing investors isn’t as easy as showing strong market fundamentals during the crisis.
“Brands definitely want to be here,” said Carolina Lacerda, JLL’s senio
