Apple Leisure Group slows Mexico hotel investment

The Secrets Playa Mujeres Golf & Spa Resort in Cancun.
The Secrets Playa Mujeres Golf & Spa Resort in Cancun.

Citing a downswing in Mexico tourism, Apple Leisure Group executive chairman Alex Zozaya said the company will be putting up to $600 million in Mexico hospitality investments on hold.

At a press conference earlier this month, Zozaya said ALG plans to put the construction of four or five Mexico hotels “on pause.” He attributed the deferral in part to the Mexican government’s decision to shutter the Mexico Tourism Board earlier this year. 

According to Zozaya, the tourism board’s closure has impacted visitor numbers, with U.S. travel to Mexico on the decline. He also pointed to growing pressure on hotel profitability as well room supply growth outpacing demand. 

Despite these challenges, Zozaya said ALG’s AMResorts is still on track to open six hotels in Mexico by the end of next year. 

Still, the company’s decision to pull back in Mexico is a significant shift in strategy. In April, Zozaya told media at the Tianguis Turistico conference that Mexico expansion was one of the company’s “major priorities,” and that ALG was “bullish on the country's long-term potential.” 

AMResorts has 34 resorts in Mexico operating under the Zoetry, Secrets, Breathless, Dreams, Now, Reflect and Sunscape flags.

Year to date through October, Mexico’s hotel sector saw occupancy dip 3.3%, to 61%, and average daily rate slip nearly 4%, to $113, according to STR. Revenue per available room was down 7%, to $69, over the same period. Supply, meanwhile, was up 3%, as demand dropped 0.3%.


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