Introduction to the Caribbean Mexican Hotel Market
Despite a challenging year for hotel occupancy in the Mexican Caribbean, consulting firm CBRE reports double-digit growth in hotel profitability in Cancun and Riviera Maya during the first half of 2021.
Key Metrics: ADR and RevPAR
The Average Daily Rate (ADR) saw significant growth: 21% in Cancun and 15% in Riviera Maya. Meanwhile, Revenue per Available Room (RevPAR) increased by 27% in Cancun and 12% in Riviera Maya, highlighting the strength and appeal of both destinations in the national and international tourism market.
RevPAR, a crucial financial metric in the hospitality industry, measures a hotel’s revenue performance by dividing total revenues by the available rooms during a specific period. This indicator assesses a hotel’s ability to fill rooms at an average price, and it is essential for evaluating overall profitability, setting strategic pricing, and comparing performance against other establishments.
Continued Hotel Construction Amid Challenges
CBRE’s report also notes that this profitability has motivated the construction of new rooms, with 2,100 added in Cancun and Riviera Maya alone during the first half of 2021, accounting for 97% of all new offerings nationwide.
Bernardo Cuesto Riestra, Quintana Roo’s state tourism secretary, recently commented that hotel infrastructure has continued to grow even during the 2020 pandemic, enabling Quintana Roo to become one of the world’s most significant tourism destinations by room count.
Quintana Roo now boasts 136,000 rooms and anticipates reaching the scale of massive destinations like Las Vegas, which has 150,000 keys, within the next five years.
Impact on the Tourism Industry
The robust performance of Cancun and Riviera Maya’s hotel sector, despite global challenges, underscores the resilience of Mexico’s Caribbean tourism market. The double-digit growth in ADR and RevPAR demonstrates the destinations’ enduring appeal to both domestic and international travelers.
These positive results are crucial for the region’s economic recovery, as tourism is a vital source of income and employment for Quintana Roo. The continued investment in new hotel rooms reflects confidence in the market’s long-term potential.
Key Questions and Answers
- What is ADR, and why is it important? The Average Daily Rate (ADR) measures the average rental income per available room in a specific period. It is crucial for evaluating hotel profitability, setting strategic pricing, and comparing performance against competitors.
- What does RevPAR stand for, and how is it calculated? Revenue per Available Room (RevPAR) is a financial metric that divides total revenues by the available rooms during a specific period. It assesses a hotel’s ability to fill rooms at an average price and is essential for analyzing overall profitability.
- Why is the growth in hotel construction significant? The continued addition of new rooms indicates confidence in the long-term potential of the Mexican Caribbean tourism market, contributing to economic recovery and job creation in Quintana Roo.
- How does this growth impact Quintana Roo’s position in the global tourism market? With 136,000 rooms and plans to expand further, Quintana Roo aims to become a leading tourism destination, competing with established markets like Las Vegas.
