Staying Power, Diversity, and the Emerging Elite Niche
This is a balmy moment for Mexico’s tourism sector, the third industry in the country, representing 8.2% of GDP. The 1.7 million people it employs have worked hard to earn it a worldwide prestige and poise that have become especially evident in the last four years.
Armed with a new-found maturity – factor-30 on, yoga positions second-nature now – tourism in Mexico has a bright future well beyond sunburn and hangovers. This is something to write home about in an increasingly competitive world market where there is no time to put your feet up, much less to enjoy a margarita and be lulled by the waves.
“There have never been so many travel magazines and articles, as people devote a higher percentage of disposable income to travel,” said UK-based publisher Nigel Bolding, shortly after the Dec. 2004 launch here of the book Mexico Chic, originally conceived for the lucrative European travel market.
“People are more adventurous than they have ever been and there are so many niche operators out there.”
Standard expectations have changed, said Brian Seagrave, General Manager of the W hotel – catering mostly to business travelers – that opened in Polanco just over a year ago, Jan. 17.
“Five years ago, having high speed internet was a differentiator, but now it’s standard. Before, spas were special, and hotels just had a fitness center, while now the move is towards round the clock spa service.”
One of the observer / players in this future is Guillermo Osorno, editor of the Mexican travel publishing phenomenon Travesías. Despite the hurdle of launching just before 9/11, the magazine soon gained a reputation for being “the Condé Nast Traveler of Mexico.”
The magazine’s Mexican readers (it is also distributed in South America and the United States), between 25 and 40 and based in Mexico City, Guadalajara, Monterrey, Puebla, Guanajuato, Veracruz and Cancun, are surprisingly affluent, Osorno said. He knows this because Travesías regularly commissions polls and surveys into Mexicans’ travel habits and the tastes of its readers.
“Every day there are more people seeking unique experiences,” Osorno said Jan. 18. “When we carry out qualitative analysis, we see a growth in ecological and sports tourism.”
The tourism market for Mexico has become more refined since 2001, Osorno affirms.
“Mexico is every day more suited for the luxury market, with a greater offer of corresponding hotels and destinations.”
Mexico’s obvious tourism strengths are its 6,000 miles of coastline and its fine climate. However, it is the country’s diversity that allows it to keep at the cutting edge, of responding to new world trends and developing new international, and national, markets.
Although over 80% of tourism in Mexico is national and, for its international visitors, beach resorts are still “the main reason” to visit the country (for the largest segment, 36%, followed by 20% to see family and friends – Sectur study on international tourist satisfaction, 2002) its cultural offer is what makes it unique and is its great reserve for the years and decades ahead.
Mexico’s diversity — marketed beyond dreariness with the phrase “los muchos Méxicos” – is evident in the country’s varied geography, flora and fauna. Its varied “tangible” cultural heritage is seen in pyramids, colonial churches, rambling haciendas, pretty contemporary Maya villages, and modern efficient cities such as Monterrey. Less tangible, but just as attractive, features range from cuisine – Mexico’s being some say the third most complex in the world after French and Chinese – to ethnicity, ranging from Zapotec communities in Oaxaca to the Purépecha in Michoacán and many more up and down the country, but especially in the southeast.
Most important for the tourism sector, the diversity is firmly established in the country’s wide range of tourism offerings, from budget and backpacking, charter groups and package tours, to exchange programs and cultural tours, business, conference and incentive tourism, eco-adventure tourism, and luxury or high end tourism.
You can snuggle down with five other people in a cozy cabin on the Malinche volcano for only 520 pesos per night (i.e. just over $8 per head), or you can pay 4,000 plus dollars per night for presidential suites in the Camino Real, the W, or the tried and tested Four Seasons.
Best of all, however, somewhere in between, you can pay from 70 dollars to 500 for a room in design or boutique hotels and converted haciendas throughout the country.
This last segment is not new, but is newly consolidated as a niche category, and even has an official name: “Turismo Premium,” for the Mexican Tourism Board (CPTM here). Under this heading the government tourism promotion office groups boutique hotels and haciendas, golf, spas and nautical tourism.
“The premium visitor’s daily expenditure is approximately double (or more) the average of tourists to visit Mexico. It is not common for the elite tourist to make use of any tourism package service, but will rather visit the country with his own plan and chose his own hotel according to his preferences,” said the Board’s Marketing Division Director, Luis Manrique Jan. 17.
However, there is an important precursor to this niche recognition, a small hotel association started by an astute, Puerto Vallarta-based Canadian. Founded in 1999, Hoteles Boutique de Mexico, known as HBM in Spanish (or Mexico Boutique Hotels, MBH, in English), both helped identify and create this market and the appealing products that are being developed to serve it. This company is now referred to and quoted by the CPTM in its latest documents on the theme.
The association (www.MexicoBoutiqueHotels.com), currently with 31 member hotels in 20 destinations, is essentially a full-on reservation service with state of the art travel information and ability to coordinate extensive circuit trips. Its original aims were to help travelers find the kind of small, exquisite hotel, distinguished by personal service, that MBH founder John Youden liked himself – ones that were not part of a larger group or chain.
Within three years, copycat companies were proof of the pudding. This was the way to go. Major chains joined in the happy chaos, starting to misuse the term “boutique” in the heated scramble to be up there, blabbing out the word indiscriminately, sometimes applying it with unintentional comic effect to hotels with 100 plus rooms.
Others followed suit in a more cautious fashion, realizing that MBH was more than just in the right place at the right time. It was also offering quality service, analysis and follow-through. Some adopted elements of the group, such as Starwood Luxury Collection with El Careyes Beach Resort & Spa and El Tamarindo Golf Resort & Spa, both on the Pacific coast’s Costalegre.
“After qualifying the hotel for suitability to our concept, which includes individuality in style and character, intimacy of size and idyllic settings (or, in the case of city hotels, prime locations), personal inspections are made to ensure that the physical attributes are supported by our cornerstone requirement: outstanding personal service,” said Sylvie Laitre, MBH Director, on Jan.10.
“Inspections include everything from linen to food quality but genuine hospitality is necessary to make the mark.”
Villa Ganz (www.mexicoboutiquehotels.com/villaganz) in Guadalajara would be a good example, a small palace where you are served an unsolicited glass of wine and little snack as you check your emails on the laptop computer by one of the antique fireplaces. The linen is the kind that makes you go to bed early, and take all your paperwork between the sheets to make the experience last as long as possible.
With regard to what executives are seeking, Laitre says, MBH requirements are twofold: “Since our parameters encourage diversity and uniqueness, we appeal to the elite travelers’ varied tastes, and our emphasis on service levels concurs with their greatest expectations – being catered to in an unpretentious and sincere manner. To put this into context, one hotel may be remote and rustic while another could be the ultimate in sumptuousness, but both will have the people factor that puts them at the top level of hospitality.”
Examples here would be the company’s dream getaway on Holbox Island, Hotel Xaloc, with its gritty and informed boat crew who accompany guests on the whale shark tour, and the Hotel del Angel in Puerto Vallarta, one of the most tasteful hotels I have ever seen, whose cocktail hour is a rich soaking in the glamorous lifestyle of the guests whose only worries are getting permission to knock down walls of their new mansions, and that their dogs fly in comfort.
Nothing could be further than the corporate tourism that works well – at least it still gets points for speed – but still has that dull tie-pin, paid-for female escort and ashtray feel.
Five years on, HBM knows the high-end tourists here down to a T. They are used to being pampered, being in charge, getting what they want and having “staff” handle details for them, Laitre says.
The trends she saw for executives in 2004 are truly to get away from it all.
“They do not want pre-fabricated packaged holidays that have no essence or
authenticity. They do not want to be bothered, talked to by people they do not choose to associate with. They want privacy, great service and ‘attention without intervention.’”
At the same time, “the tourist bubble” created for the package holiday guest who speaks no language but his own, and feels threatened by unfamiliar food or mealtimes, is not what the elite tourist is after.
The Hacienda Xcanatun, one of MBH’s members, notes that searching for new experiences is key to a successful vacation break.
“We find our guests like the fact that the hacienda is not just for foreigners. They have a chance to mingle with affluent members of Mérida society.”
While there are slight differences as to who exactly is the high-end tourist, everyone agrees that this market has a real time deficit and will not suffer fools.
Way to Go, Where to Go, What to Wear
So what are the hot destinations for this market niche?
Mesones Sacristía says colonial cities and Los Cabos; Laitre says, “For us the hottest hotels were practically destinations unto themselves … San Miguel de Allende continues to be strong and Morelia is definitely growing in popularity.” The Tourism Board underlines Loreto and Los Cabos, Puerto and Nuevo Vallarta, Cancún and the Riviera Maya and haciendas in the Yucatán.
Ironically, once it has reached credibility factor, the problem in the niche is who to believe. Everyone, from the government to the small entrepreneur, wants to sing the praises of the destinations they are investing in and, at this level, there are no bad apples.
In addition a little stardust certainly does no harm. Everyone in the niche recognizes that celebrities and glossy magazines are their best friends along with old fashioned word-of-mouth (nowadays called “bragging” in status-concerned aspects of the niche).
Indeed, you do not visit too many elite, boutique or hacienda hotels in Mexico without discovering that a number of them were former homes of the extremely wealthy who had the means to build their own homes in wonderful places. Often these family homes were expanded, used for guests – such as the famous Villa Vera in Acapulco – and the next step was to make them full-fledged paying hotels. The haciendas of course were family homes of pioneer landowners, renowned tyrants, crafty impresarios, bull-breeders and the like, even if their names mean nothing outside their region.
Celebrity isn’t just about nostalgia either, and tourism a la mode is hardly jostling to take a back seat.
“High end tourism is not about outrageous prices but about charm, ambience, style, design and innovation,” says Rafael Micha, co-founder of one of Mexico’s most talked-about and most feted hotels, Habita in Polanco, Mexico City. “It’s sophisticated travelers that appreciate a Arne Jacobson 1,000 USD bathroom faucet but are not overwhelmed by it, even though is in the permanent collection of the MoMA in NY.”
I asked Micha, just as he was about to open hotel “CONDESA” on Jan. 27 this year, what Habita and Deseo, in Playa del Carmen, had taught him about the high end niche?
“It’s a ball … good design IS good business. The greatest acknowledgement after three years of HABITA, was Starwood Hotels opening a 60 million plus venture outside the USA in Mexico City because HABITA had developed a market, a segment, and proved successful.”
Mode-sensitive tourism keeps the concept people on their toes. You have to be fast to know when to swim against the tide. Micha’s hopes for CONDESA were: “Younger hipper clientele but staying power … away from fickle fashion.”
And his observance of trends reflect what his group are doing with their latest beach hotel, also in Playa: “No more spas … it’s sooo over the top … we are doing a hammam & therme … No over the top design … too much is just too much and it shows. Back to basics … think BASICO in Playa del Carmen. No more ‘haute design’ but run down/atmosphere like places with TOP NOTCH service. Being there FIRST!”
Finally, a blink away from the bright lights, one recurrent issue in this segment in Mexico is that often the client knows more about what the service should be than the service provider. This is often a problem with spas, despite Mexico’s success in creating last year a legal standard to which spas should adhere.
A wider ramification of this phenomenon, one where past sloppy practices, infighting and politics-playing are still painfully evident, is when the individual boutique or elite hotel – or even just an efficient hotel that serves a sufficiently foreign clientele – knows more than the local tourism authorities, and exposes government inefficiency.
Elite tourism makes it clear that many service attitudes still very prevalent in this sector in Mexico are hopelessly outmoded. With the spotlight on this niche, there is a push towards change that will probably benefit tourists, international and national, on the lower income / spending echelons.
In the wake of these challenges, as long as the choppy waters of past mismanagement and development without care for sustainability are navigated carefully too, Mexico could start to develop a tourism culture that reflects its magnificent tourism offering to the world and to its own people.
Barbara Kastelein for Business Mexico
Special Report on high-end tourism