Tourism and Hospitality industries see growth
Latin America is one of the world’s fastest growing vacation and leisure markets. After a very slow 2012, hotel and tourism developers are back to building with high expectations for 2014. Developers are adding new properties in Mexico and the Caribbean in record numbers, the number of hotel construction projects in Mexico has more than doubled in the last 6 months. Only five hotels (with a total of 354 rooms) opened in the region in 2012. As of today, 131 hotels are under construction with a total of 21,957 rooms being added in Mexico and the Caribbean, of those 4,000 rooms are in the luxury segment.
An example is Starwood Hotels & Resorts Worldwide, Inc., who announced plans this month for a 50 percent expansion into Latin America during the next five years. Starwood CEO, Frits van Paasschen, sees, “strong growth in lodging demand and many opportunities for Starwood to expand in the region.” In the last two years, the company has opened 13 hotels in Latin America including its first hotel in Mexico City.
Other countries showing hotel construction booms: Dominican Republic (2,475 rooms), Bahamas (2,271 rooms), Puerto Rico (709 rooms), Aruba (320 rooms), and Jamaica (238 rooms).
Mexico in line to become one of the world’s top 10 aviation suppliers
With the close proximity to the US, the world´s main consumer for military and aviation, Mexico is prime real estate for aviation related industries. With 50% shorter delivery times to the US than Asia and 30% savings on wages for skilled labor, Mexico is very competitive in all areas of manufacturing. Mexico has developed a solid industry for automobile manufacturing and now a new industry is emerging, aviation. The aviation supply manufacturing industry, mainly devoted to supplying parts to US based manufactures, has seen a 20% annual growth in Mexico since 2006. About 20 new projects are expected this year, worth $1.3 billion dollars and aviation exports doubled between 2009 and 2012 to reach $5.4 billion in Mexico. Says Carlos Bello Rocha, head of Mexico’s Aerospace Industry Federation (Femia): “Our country is attracting the biggest share of aerospace investment worldwide.”
A facility that will eventually employ 3,000 specialist technicians is under construction near Querétaro and it is the result of a joint investment of $40 million dollars between Aeroméxico and Delta Air Lines. Canada’s Bombardier has had a large presence in Mexico, since 2005, when they built a $200 million dollar site. They have since then spent a further $300 million dollars in Mexico, and they employ 1,800 people. Eurocopter came in to Mexico in February of 2013 and opened a 12,000 square meter facility that will employ 200 people by next year. They have invested $100 million dollars to produce parts for Airbus and plan to invest $500 million more dollars over the next 15 years. In 2012, French conglomerate Safran opened an engine workshop in Querétaro and it is now Mexico’s largest aerospace firm, with 4,000 employees.
Femia forecasts that there will be 450 companies working in this field by 2020, representing 110,000 jobs and $12 billion dollars in export sales.
A lot of money is coming into Mexico from investors across the globe. This represents some serious opportunities for businesses, investors and real estate practitioners.