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What the “Tourism Time Bomb” Means to Mexico Real Estate

4 April 2008 495 views 2 Comments

By: Charles Sipe

Mexico real estate values should see acceleration in the future as international tourism is predicted to double world wide by 2025. This prediction is made in a recent paper in the Harvard Business Review titled “The Tourism Time Bomb”. One reason for this tourism boom is the growing middle class in emerging markets such as India and China. This post takes a look at the possible implications of such a boom to Mexico real estate.

World Wide Tourism to Increase from 800 million in 2008 to 1.6 billion by 2020

This will have an obvious impact on demand for hotels and attractions at popular Mexican tourist destinations. Cancun, Cabo San Lucus, and Puerto Vallarta are just a few of the places that are likely beneficiaries. Less developed areas may become the next Cancun or Cabo for the tourists who can not book the one of the main destinations.

Urban Real Estate will Skyrocket

Smaller investors and businesses will be forced to move outward from city centers, as urban real estate will be at a high premium. If you own a prime location in a main city this would be a valuable scarce resource.

Travel Infrastructure will be Highly Stressed

A majority of travelers will still want to visit the most well known locations, such as Cabo San Lucas, Cancun, and Acapulco. The authors of the “Tourism Time Bomb” believe travel providers will be at an overcapacity and be forced to implement waiting lists to get to popular sites.

This trend of increased tourism in the future should lead to increases in the value of key real estate locations, such as Cabo and Cancun as well as create opportunities for expansion and new development.

Source: Investment Opportunities from The Tourist Time Bomb

2 Comments »

  • The Rise of the Rest: Effects on Mexico Real Estate « Mexico Real Estate Investment said:

    [...] worldwide travel and thus demand for the rental market as was discussed in the previous post, What the Tourism Time Bomb Means to Mexico Real Estate. Here is a very interesting video on global [...]

    # 12 June 2008 at 11:37 pm
  • An International Airport for Tulum | Mexico Real Estate Investment said:

    [...] The idea of building and operating an international airport in Tulum has been circulating for years now, but has met with opposition from both environmental groups concerned with the impact on the ecosystem as well as opponents who fear the competition to Cancun’s airport. According to Buen, the airport project for the Riviera Maya is part of an integral national plan to include new airports for the resort area of Puerto Peñasco, Sonora and San Blas, Nayarit hoping to increase national air transport capacity by 50% in the next ten years. A second runway is also being added to the Cancun airport, which should be finished by the third quarter of 2009, requiring over $70 million in new investment, hoping to increase its passenger totals to 25 million yearly. Related Stories A Black Eye for Tulum, Mexico What the “Tourism Time Bomb” Means to Mexico Real Estate [...]

    # 20 August 2008 at 5:14 pm

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