Juan Carlos Reus
Expansion Director Mexico, Central America and the Caribbean
NH Hotel Group
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Insight

Hotel Chains Ride the Tourism Wave

Tue, 11/01/2016 - 14:41

Whether it is business or pleasure, the number of people coming to Mexico is on the rise. Just in the first half of 2016, the country saw 47 million international visitors, up 9.4 percent from the same period in 2015, according to the Ministry of Tourism. The burgeoning tourism landscape has opened an opportunity for hotel chains to strengthen their position. NH Hotel Group is among them.

“Mexico has welcomed our services,” says Juan Reus, Expansion Director of NH Hotel Group. “Hotel chains are starting to come to the forefront of traveler priorities. The market has diversified and now is the time for the hotel industry to become more professional and increase profits.” With 11 hotels in Mexico, the group’s goal is to have between 30 and 50 operating units by 2020, focusing on quality and the middle to upper-scale niche in the market. “We want to provide the services our end users demand,” says Reus.

Attracting investors does not pose a great challenge to NH Hotel Group as its investors are generally loyal to its brand, says Reus. “When it comes to attracting investors and partners, we let the quality of our hotels and customer satisfaction levels speak for themselves,” he says. “We all enjoy coming to a place that treats us well, with well- decorated rooms in a safe location. For this reason, we strive to offer our end users high-quality services. Investors like the fact that we offer a convenient balance between price and value, which makes us competitive in the market.” Reus says that while independent hotels make up 70 percent of the market in Mexico, they do not have the same salesforce and weight in negotiations as the larger hotel brands. “It is one of the most important factors investors look at to define how much a brand is worth,” says Reus. “The second most important factor is economies of scale. Hotel chains have the ability to negotiate in a wide range of fields. We have a wide network of suppliers and strong relationships with travel agencies that help us negotiate profitable rates.”

NH Hotel Group strives to maintain top of the line architecture, technology, gastronomy, design and technology installed in its hotels. “The hotel industry tends to offer return rates based on their niche in the market,” says Reus. “Hotels that focus on the three-star niche of the market require a lower level of investment but the profitability is equally affected. We look for quality in material.”

Hotel chains clearly differentiate themselves from each other when it comes to the fees, quality and services they offer. Reus says NH Hotel Group targets executive tourism and clients that travel for business. “We do not worry much about new trends like Airbnb as they have their own niche in the market,” explains Reus. “A business person is unlikely to exchange the professional services a hotel can provide like Wi-Fi, business centers and breakfast for a room that is cheaper.” Keeping in line with its core target of business travelers, the group has a hotel at the international airport in Mexico City so executives do not have to face the city’s notorious traffic. “Many executives opt to have their meetings there so they do not have to leave the hotel,” says Reus. “The way executives do business is changing. They travel lighter and carry their offices in small devices. They are interested in doing business in a comfortable and safe manner.”

In its 10 or so years in Mexico NH Hotel Group has seen significant growth in the main business cities of the country. Along with local partners, it is building structures that are functional enough to last over 50 years in the market.