Mexico’s Hospitality Sector Reaches Pre-Pandemic Levels

Mexico’s hospitality sector has achieved a 26% increase in RevPAR compared to 2019 levels, outperforming regional growth through a strategic shift toward premium segments and a 30% rise in Average Daily Rates. This recovery, driven by North American connectivity and preparations for the 2026 FIFA World Cup, signals a transition toward high-value, experience-based tourism and digital service integration. The development primarily impacts institutional investors, luxury developers, and the 129 projects currently in the regional pipeline.

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The hospitality industry in Mexico and Latin America has achieved a sustained recovery, with key performance indicators now matching or exceeding 2019 levels, reports EY. According to the firm’s latest Real Estate, Hospitality, and Construction (RHC) analysis, Mexico’s leadership is underscored by a 26% increase in RevPAR compared to pre-pandemic benchmarks.

According to EY, while urban hotels continue a gradual recovery, coastal tourist destinations led occupancy rates through 1Q25. Coastal markets recorded the highest occupancy levels in 2024, with Cancun averaging 74%, Los Cabos 72%, and Puerto Vallarta 68%. 

Industry projections remain positive for the 2026 period, supported by the upcoming Easter holiday season and Mexico’s role as co-host of the 2026 FIFA World Cup. This demand is further bolstered by air connectivity with North America, notes the EY report. Between January and October 2024, international arrivals from the United States reached 11.5 million. This volume allowed resort properties to surpass pre-pandemic performance, while urban centers maintained a steadier upward trajectory.

This positive trend expanded to 2025, as the country recorded 47.8 million international tourists during 2025, a 6% increase from 2024, as reported by MBN. In this sense, Mexico surpassed the global rate, as in 2025, global tourism reached 1.52 billion international travelers, a 4% increase. Regional data showed that Europe grew by 4% with 793 million tourists and Africa expanded by 8% with 81 million travelers. Asia-Pacific recorded a 6% rise with 331 million visitors, while the Middle East grew by 3% with 100 million. The Americas increased by 1% with 218 million tourists.

The report identifies a significant shift in pricing power across Latin America. While average occupancy across the region sits at approximately 57%, which is three percentage points below 2019 levels, the Average Daily Rate (ADR) has increased by nearly 30%. Consequently, Revenue per Available Room (RevPAR) has risen more than 26% above pre-pandemic figures. According to EY, Mexico currently records the highest RevPAR growth in the region. Even when measured in local currency, hotel rates have remained above inflation, demonstrating resilient demand despite global economic shifts.

The premium and luxury segments are experiencing a historic expansion in Latin America. Currently, there are 129 luxury projects in development, representing 26,077 rooms under construction. Investment models are also evolving toward asset-light strategies. Expansion is increasingly supported by franchise models funded by private equity from the United States and the Middle East. These entities often provide financing without holding direct equity in the physical hotel assets.

Trends in the Hospitality Sector

EY identifies several primary drivers shaping the future of the hospitality sector, starting with a significant digital transformation. This includes the increased adoption of contactless technology, AI-driven guest services, and cloud-based property management systems. “For a foreign tourist, a successful first payment is the first indicator of how modern and secure the country receiving them is. For Mexico, the tourism sector currently represents the first line of contact with global capital and, therefore, functions as the main showcase for our technological competitiveness,” says Juan Soto, General Manager, Nuvel, in an MBN Expert Contributor piece.

Demographic shifts are also redefining the market, as the growing participation of Millennials and Gen Z travelers has fueled the rise of workcations and digital nomadism. These generations are also driving a surge in event-based tourism, where demand spikes are directly linked to international concerts, music festivals, and major sporting events. This trend is already visible in World Cup host cities, where the combination of younger travelers and high-impact events is sustaining occupancy levels.

Additionally, the industry is seeing stronger ESG commitments through the integration of local energy sources and regional product sourcing. Travelers today are seeking not just places, but true meaning. They look for sustainability that protects the environments they visit, wellness that restores their balance, gastronomy that connects them with culture, and nature that offers perspective. Recognizing these psychological motivations is the key to creating travel experiences that resonate deeply,” notes Rodrigo Esponda, Managing Director, Los Cabos Tourism Board, in an MBN Expert Contributor piece.

These shifts occur alongside a transition toward hyper-personalized guest experiences and local branding. "Latin America has become a primary destination for international travelers seeking experiences that connect with culture and the environment," stated Luiz Campos, Government and Infrastructure Leader, EY Latin America.