Editor's note: Quotes in this story were originally spoken in Spanish and come via a live translation provided by the conference.
Both hotel brand executives and operators in Mexico are confident the country is set up for a broad-based period of growth, fueled by a new era of business travel to the country.
Speaking during the "Drilling Down on Hotel Supply and Demand — Business Travel" session at HVS' 2023 Mexico Hotel & Tourism Investment Conference, Erick Brunet, managing director of global corporate services for Newmark, explained that "nearshoring" — which is the idea that North American companies are looking to bring manufacturing and supply-chain logistics closer to home — is a long-term trend.
"This is not a fluke," he said. "It's something that will continue happening ... because of the global geopolitical situation, and [Mexico] will be the receiver of a big part of the phenomenon of nearshoring, friendshoring or allyshoring."
Both the pandemic and Russia's invasion of Ukraine gave companies a new perspective on how to protect their supply chains and calculate risk, Brunet said, and growth in that sector could happen quickly, perhaps over the next eight to 12 months.
Patricio del Portillo, vice president of development in Latin America for Aimbridge Hospitality, said the shift is something hoteliers must be poised and ready for. He added that much like leisure travelers who have had increasing service expectations as rates increased, business travelers are going to expect more from business hotels than they did prior to the pandemic.
He said this will be more difficult to navigate in markets lacking in sophisticated operators. Many parts of Mexico are still dominated by family-owned and operated hotels, he said.
Gustavo de la Serna, director of business development in Latin America and the Caribbean for Wyndham Hotels & Resorts, said he's already seeing a big spike in demand in some business-driven markets such as Mexico City, Guadalajara and Monterrey. He said the nearshoring trend, if fully realized, will represent a dream finally becoming a reality.
"I don't remember how many years ago it was that we started talking in Mexico about how it'd be a great solution to leverage our geographical situation because we're the closest country to the most important market in the world," he said. "And we're in the same situation maybe 40 years later."
He said most of the benefit from nearshoring will come in the northern and central parts of the country, with the southeast continuing to struggle.
He also said the trend could open up the possibility of the extended-stay hotel segment gaining a much greater foothold in the country.
"This is coming in the future," de la Serna said. "When companies send technicians to stay here three months, extended stay is much more efficient. We have to start thinking about different things."
Alonso Burgos, vice present of development in Central and Latin America for Marriott International, said his company is sending a clear signal on the future strength of business travel in Mexico with its pending $100 million acquisition of Mexican-based brand Hoteles City Express.
He said the next stage of growth for the country needs to be in sophisticated third-party managers, which will support the types of investments brands are making in Mexico.
"It's very important to have operators like [Aimbridge] to operate hotels like this," he said.
Burgos said the fact that business interest in Mexico is so broad-based — although it's headlined by the automotive sector with new Tesla and BMW plants — is one reason he has continued optimism for growth.
Del Portillo said hotel developers in the country are starting to catch on to the trend, as well.
"I've never seen a pipeline like the one we have," he said. "There are more and more interested groups, including family offices."