Blanca Rodríguez
Partner
BTCM IM
/
View from the Top

Cultural, Archeological Alternatives to Beach Tourism

Wed, 05/08/2019 - 16:19

Q: How is BTCM IM positioned in the Mexican tourism industry?

A: BTCM IM works in several fields within the tourism sector. As a consultancy, we advise different players and hotels, such as Banyan Tree. In 2015, we partnered with Banyan Tree to establish a private equity fund to boost the sector. Due to factors such as volatility generated by elections and the dollar-peso exchange rate, the fund was put on hold but the idea is for it to continue. In addition to the fund, we also provide consulting services to tourism businesses.
In the past five years, the tourism sector has grown at a very fast rate. Mexico has become the sixth most-visited country in the world, according to the Ministry of Tourism, with around 40 million foreign tourists visiting the country in 2018. The tourism sector demands significant requirements of human capital, which makes it a significant generator of employment and a crucial engine for many areas in the country. These are some of the factors behind BTCM IM’s decision to translate its experience in the real estate industry to the tourism sector. We plan to set up projects in states such as Chiapas, Quintana Roo and Baja California Sur with a focus on low environmental impact and social responsibility. 
Q: Beyond places like Cancun and the Riviera Maya, what other locations are likely to develop as tourism hubs?

A:  Places like Cancun, Los Cabos or Riviera Nayarit are extremely important. Riviera Nayarit is registering impressive growth rates and still has room to expand its offering. The same is true for Los Cabos, an area that in the next two to three years will add a significant amount of rooms. In the Riviera Maya, some locations are a little saturated, but there is still a good deal of room for growth. 
We have partnered with Terragon Off-Grid, a company that specializes in constructing self-sufficient units as part of auto regenerative cities. These constructions do not depend on the services provided by the government, since they generate what they need. The idea is to set up tents or rural cabins that can be moved to different locations. We are considering Chiapas, Chetumal, Ensenada and Todos Santos. All these areas have the necessary infrastructure and connectivity, but at the same time they are somewhat isolated, which generates a different travel experience. Our target is the segment of the luxury market that does not want to stay in a luxury resort; it is more adventurous and connected with local communities.
Within these communities we are also creating innovation and technology centers. The idea is for people to come and study how local communities grow their food. It is not just about going on a vacation to do nothing but to learn and become submerged in a different experience. 
Q: How will sophisticated financial instruments such as Fibras impact financing in the tourism industry?

A: The tourism sector has traditionally been one of the most difficult to finance, since many companies and investors do not treat tourism as they would real estate. Financing an industrial warehouse is not the same as a hotel with different occupancy rates. In addition, tourism markets are subject to different variables. The emergence of these new financial vehicles is creating financing opportunities for the sector. Although private banking has not always been a fan of the hotels segment, development banks like Bancomext are extremely committed to the industry’s development. 
Q: How can the industry change the narrative related to perceived must-see destinations in Mexico?

A: That is what we want to do. Through this new business model, we are trying to convey the message that Mexico has more than just beach tourism and that only one hour away from popular beach destinations visitors can become submerged in cultural or archaeological activities. Because our units are nomadic, we can place them in one location for one season and then move them to a different area for the next. This will help create regional tourism that better promotes more of Mexico.