Mexico is now among the 15 most-visited destinations worldwide with more than 23 million visitors each year. According to global real estate firm Jones Lang LaSalle (JLL), strong tourist demand and budding economic and political environments are driving institutional investment into the region.
“We expect the Mexican lodging sector to continue its positive trajectory this year and throughout the next several years,” says Clay Dickinson, executive vice president of JLL’s hotels and hospitality group advisory practice in the Latin America region. “Hotel transaction volumes are projected to reach $700 million this year-the highest level in ten years. New construction is also on the rise, with more than 191,600 new rooms expected before 2022.”
From a low of less than $100 million in hotel trades in 2009, transactions in 2013 climbed to $600 million. Despite the new development activity, investors feel steady performance growth has resurged investment prospects. JLL expects deal flow to rise 15 percent in 2014 to the second-highest annual level on record-more than $700 million in hotel transactions.
In addition to an uptick in investment activity, construction is also expected to increase throughout the next decade by a compound annual growth rate in room supply of 4.9 percent. This projected change would be more than three times the growth rate expected for the U.S.
