Investors Positive on Mexico, LATAM Tourism Industry in 2025

Hotel and hospitality investors anticipate a positive 2025 for Mexico, Latin America, and the Caribbean, citing the recent surge in tourist arrivals as creating a resilient environment, CBRE reports. The "opportunistic" strategy is the top choice for investors, favored by 42%.

According to the latest CBRE survey on Hospitality Investors’ Intentions, the increase in international tourist arrivals contributes to a resilient environment for hotel industry growth. In 2024, Mexico welcomed over 45 million international tourists, marking a 7.4% increase compared to 2023. The Dominican Republic also saw significant growth, receiving over 11 million international tourists, a 9% rise. Costa Rica experienced a 7.7% increase with 2.7 million international tourist arrivals.

The opportunistic strategy remains the most favored approach among hotel investors, with 42% indicating a preference for this method, CBRE reports. This aligns with market conditions where higher yields are sought, and investors often consider unbranded hotels for renovation. The strategy was followed by the Value-add and Core strategies, each with 25%. 

Investors express continued confidence in the sector, primarily due to optimistic prospects for total returns. The tourism industry’s resilience and growing demand in the region are key factors, CBRE notes. The hotel sector plays a vital role in the regional economy, contributing approximately 8.6% to the GDP in Mexico, nearly 20% in the Dominican Republic, and around 8.2% in Costa Rica.

The survey also indicates a growing interest in hotels affiliated with recognized global brands. The region has seen numerous hotel openings, and major hotel chains anticipate sustained demand growth in 2025. Resorts continue to be the most attractive type of location for hotel investments, driving new developments in both established and emerging destinations. Investors also show a preference for luxury hotel chains, as the region becomes a prime destination with significant potential.

International tourist spending saw increases in 2024, with Mexico registering a 6.7% rise, the Dominican Republic around 9.4%, and Costa Rica an estimated 4.9% increase compared to 2023. 

Full-service hotels are the primary acquisition target for investors. However, branded residential hotel developments are gaining popularity, driven by the growth in luxury tourism.

Los Cabos in Baja California Sur maintains its position as the most attractive destination for investment in 2025, achieving a hotel occupancy rate of 76.9% in 2024 and solidifying its status as a high-end tourism hub. Playa del Carmen in Quintana Roo is also emerging as an appealing investment location due to strong rental yields and property value appreciation potential, and Punta Mita in Nayarit is also considered an attractive destination within Latin America and the Caribbean.