Timeshares: Reliable Source for Repeat Tourism

Internal and external factors have led to a slowdown in the tourism sector but there are still significant opportunities and room for growth, says Juan Ignacio Rodríguez, Managing Director of timeshare exchange company RCI Latin America. “Mexico is a country of experiences and the tourism industry here has been recognized globally for its high quality. The country has a number of unique advantages, including service, gastronomy, weather and culture. Sun and beach destinations are our main strength, coupled with our proximity to the US and Canada and the numerous flights coming from across the globe, but there are other opportunities to explore. Capitalizing on experience tourism is one such opportunity,” says Rodríguez.

Mexico is the world’s seventh-most popular destination for tourists and ranks 16th in foreign currency exchange, according to UNWTO. “In the first half of 2019, we had 10 percent economic growth in the sector and a higher number of foreign visitors year over year,” says Rodríguez. The country also has a strong base of domestic tourism, which was the main driver for growth in the 18 months to January 2018. Since then, however, the sector has decelerated due to security perception, a reduced promotional program and the deluge of sargassum that washed up on Quintana Roo’s shores.

Rodríguez highlights that slower tourism can affect a wide range of sectors and companies due to their importance in certain regions. “All of Mexico’s main tourism destinations have lower unemployment rates than the rest of the country. Being a tourism pole provides many direct, indirect and induced economic benefits for the entire area,” he says. Tourism also attracts long-term investment. “Tourism investors do not invest for six years but for 20 or 30 years. The sector does not operate in the short term.” All these benefits could be in danger from deceleration across the industry.  

In the long term, tourism destinations should gradually become self-sustainable. To that end, it is necessary to generate services that support the local population at schools and hospitals. “A successful example of this policy were the Centros Integralmente Planeados (Integrally Planned Centers) but it is necessary to follow up on these projects over time.” For the tourism sector to grow, a strong regulatory framework, investment in promotion and public-private strategies are needed, says Rodríguez. “Coordinating the federal, state and municipal governments has always been key to the development of the sector. Through AMDETUR, we are promoting these initiatives to the Ministry of Tourism, FONATUR and the Ministry of External Relationships.”

To attract tourism and spending into a region, the timeshare industry can be an excellent ally, Rodríguez says. RCI is a global timeshare company that provides access to 4,300 affiliated resorts in over 110 countries and sees interesting opportunities in Mexico. “The timeshare industry offers a repeat visitor for a destination. Moreover, timeshare visitors spend about twice as much per trip than a regular tourist because timeshare visitors often come with more people and stay longer.” For those reasons, he adds, timeshares generate a constant flow of tourism even in the face of poor environmental conditions and economic troubles. 

The timeshare model has proven to be popular in the Mexican market. “The Mexican timeshare market is valued at US$4.8 billion, which was almost a quarter of the global US$20 billion.” Moreover, about 42 percent of Mexico’s sun and beach hotel offering is for timeshares. In 2019, RCI expects 3 to 5 percent growth in its results, according to Rodríguez. “We are also seeing a significant investment in vacation resorts so we expect continuous growth through 2020 and 2021.”

Rodríguez also sees significant opportunities ahead as global tourism continues to grow. “One out of every eight people travels abroad but by 2050 that rate will be one of every two, according to recent studies.” To grab these opportunities, the sector must strengthen its natural markets – the US and Canada – and prepare for an increase in tourism from Asia. “China is generating the largest number of international tourists. It is necessary for global tourism service providers to adapt to these travelers.”