Mexico a land of prosperity for InterContinental Hotels Group

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With dozens of new hotels in Mexico coming on line, it's safe to say that InterContinental Hotels Group is in growth mode.

IHG recently celebrated the opening of its 100th property in Mexico, the Holiday Inn Cancun-Arenas. More openings are on the way.

The company now manages nine Presidente InterContinentals, 16 Crowne Plazas, 54 Holiday Inns, 22 Holiday Inn Expresses and one Staybridge Suites.

By year's end, six more hotels will open. Before 2010, 37 hotels will join the IHG family in Mexico, adding 4,109 guest rooms to the company's inventory in that country. Ninety percent of the hotels are new constructions.

"We have very aggressive growth plans," said Jorge Apaez, senior vice president and director general of IHG in Mexico. "Our plan is to double the number of properties we have open in five years. ... We have created a very productive value proposition for our franchisees in Mexico."

According to Apaez, the hottest destinations in Mexico right now for hotel development are Mexico City, Monterrey, Toluca, Tampico and Puebla.

"However, our growth isn't limited to these destinations," he said. "We have new contracts signed for the construction of 44 hotels throughout the country. Specifically, these will be 16 Holiday Inns, 20 Holiday Inn Expresses, four Crowne Plazas, two Staybridge Suites, one Presidente InterContinental and one Hotel Indigo."

Among the properties scheduled to open is the 199-room Crowne Plaza Mazatlan. It will make its debut in 2008 as the brand's first condo-hotel in Mexico. The 150-room Hotel Indigo Mexico City-Santa Fe will be the first Indigo in the country.

Apaez said that each of the company's brands has successfully targeted a different market.

"Our current distribution of Holiday Inn and Holiday Inn Express hotels is oriented primarily toward business destinations," Apaez said. "On the other hand, the InterContinental and Crowne Plaza brands, which in Mexico are operated through an alliance with Presidente InterContinental Hotels, have an even balance between beach and business destinations."

But that balance of business vs. leisure is scheduled for a change, at least with some brands, according to Apaez. He said that IHG plans to increase the presence of the Holiday Inn and the Holiday Inn Express brands in several Mexican resort destinations.

"We already have signed contracts in destinations like Los Cabos, Cancun and Puerto Penasco," Apaez said. "We have finalized the first franchise to introduce the Hotel Indigo brand. The only brand that we are not marketing [in Mexico] is Candlewood Suites, because it is an extended-stay concept ... and it's necessary to carefully analyze the best way to introduce and expand its presence in our region."

Apaez said the introduction of the Indigo brand in Mexico is an important reflection of market demand.

"The behavior of the Mexican consumer is very similar to that of consumers from the U.S. There is a clear niche, and a clear interest on the part of Mexican guests, to stay in hotels that more closely fit their lifestyle and allow them to experience new levels of personal service. Our first Hotel Indigo will be developed in the Santa Fe district, and we are analyzing additional opportunities in other parts of Mexico City, as well as in Monterrey and Guadalajara."

The word from Presidente

Grupo Presidente, which operates the InterContinental brand in Mexico, is equally growth-minded. Presidente InterContinental now operates about 3,400 rooms in Mexico, or about 4.25% of the nation's tourist-class inventory.

The reason for the growth is tied closely to each destination where the company has a presence, according to Gordon Viberg, president and CEO of Presidente InterContinental Hotels Mexico.

"Presidente InterContinental is expanding in Mexico City due to the increase in demand for hotel accommodations in the Polanco hotel zone, which is the social and business center of Mexico City," Viberg said. "We have new hotels in Merida and Puebla, which are state capitals and have increased demand for high-end business accommodations."

Some of the hottest destinations, according to Viberg, are the Riviera Maya, Baja California and Punta Mita. "We are looking for hotel development in these areas," he said.

The U.S. market continues to be important for Presidente InterContinental. Of the company's guests, Viberg said that about 72% are from other countries, with 80% of those from the U.S. The business-leisure mix varies by destination.

"In Mexico City, Guadalajara, Monterrey and Puebla it is about 85% business and 15% leisure," Viberg said. "At our resorts in Los Cabos, Puerto Vallarta, Ixtapa, Cancun and Cozumel, it is 90% leisure, including incentive conventions, and 10% business. In Merida, the rate is about 50-50."

"IHG has been present in Mexico for more than 30 years, and our brand portfolio has achieved enormous acceptance," said Apaez. "In the last five years we have accelerated our growth, and we plan to continue this pace in the future. Recently, we reached one of our most important goals: the opening of our 100th hotel, the Holiday Inn Cancun-Arenas, and that is proof of the confidence we have in the future of tourism in this country."

To contact reporter Mark Chesnut, send e-mail [email protected].

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