Mexico hotels aim to jump-start group business ‘engine’
 
Mexico hotels aim to jump-start group business ‘engine’
24 FEBRUARY 2020 9:19 AM

Experts speaking at the 2020 Mexico Hotel & Tourism Investment Conference said Mexico isn’t getting its fair share of groups and conventions and must take steps to fix that.

Editor’s note: All quotes in this story were derived from presentations at the Mexico Hotel & Tourism Investment Conference that were conducted in Spanish and translated by event staffers in real time.

MEXICO CITY—Mexico ranks just fifth among countries in the Americas in meetings hosted, according to the International Congress and Convention Association, with its largest market, Mexico City, coming in behind South American cities such as Buenos Aires, Argentina; Santiago, Chile; Sao Paulo, Brazil; and Lima, Peru.

At the 2020 Mexico Hotel & Tourism Investment Conference, experts on the country’s hotel industry said steps need to be taken to improve the its overall standing and win its fair share given the country’s size and location.

“Buenos Aires is No. 1 in the region and 11th in the world, and why can’t Mexico City be where Buenos Aires is?” asked Carolina Lacerda, SVP of investment sales for JLL’s Hotels & Hospitality Group. “It’s incomparable to what we have. Mexico has air access and is well-located.”

Buenos Aires’ relative distance from North American markets is overcome by meeting planners’ concerns about health and safety in Mexico, she said. The country continues to struggle with negative perceptions abroad about safety issues, she said.

“We need to talk about how to mitigate the perception of constant insecurity for a country where it’s not a constant problem,” she said. “We have to get hotel people and associations working to promote the destination when negative events happen.”

Panelists noted the country has potential for group and conventions business in both large urban markets such as Mexico City and Monterrey, as well as resort markets like Cancún.

Alfredo Reynoso, director of development in the region for Hyatt Hotels Corporation, said conventions and group business is key for companies like his to grow in Mexico. He noted his company has more than 20 brands to address different traveler segments, but demand for group business is key for growing some of its more marquee brands.

“For conventions, Hyatt Regency and Grand Hyatt are specifically designed to host groups and conventions in the best way possible,” he said.

Marcos Sacal, CEO of Murano, said group offerings must be tailored to markets to thrive, noting the importance of a resort feel to convention spaces in Cancún.

At the Hotel Grand Island Cancún, “everything is crystal and open,” he said. “People who come to a meeting in Cancún want to feel like they’re in Cancún, not enclosed in a ballroom.”

Alejandro Ramirez, CEO of BTC, said expanding group business in Mexican markets “has a lot of potential” and would help stabilized business within the country as groups are booked out much earlier than transient.

“A group you sell a year out or at least six months in advance gives you (the opportunity) to only worry about filing the gaps,” he said.

Expanding conventions business
Panelists said a boost in conventions business must come from joint efforts of state, local and national governments in Mexico, along with work from associations and entrepreneurs.

Lacerda lamented the cancellation of the new airport construction in Mexico City, noting the city’s airport is “the worst in Latin America.”

“Some governmental decisions have affected (conventions business) a lot,” she said.

The country also lacks broad tourism promotion to combat negative perceptions about crime and safety, particularly because the national organization to promote tourism was eliminated, she said.

Panelists also noted that safety and security issues aren’t purely a perception problem, and must be addressed directly.

“The most important risk is safety risk, when it comes to large groups,” Sacal said. “The responsibility falls on the companies behind these events, and they’re the ones to cancel trips if things are unsafe.”

He said companies must invest in continued marketing as a defensive measure against negative perceptions of the country.

Reynoso said Mexico has a lot working in its favor already, including a good airport in Cancún, which he hopes can be replicated in other markets, and strong industry collaboration in markets such as Los Cabos.

“There are still many challenges, but the upside is so high,” he said.

Building conventions markets
Panelists noted many markets outside the top urban and resorts destinations in Mexico have potential for great groups business, but they face a chicken-and-egg situation, in which it is unclear where the investment in hotels and infrastructure will come from without that demand already in place.

Sacal said that sometimes comes down to clearly explaining to government officials what the real value of a convention center is.

“It’s hard to have a convention center that is profitable,” he said. “But at the end of the day, it’s like an engine or power source (for a market).”

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