Mexico’s Los Cabos enjoys steady wave of development

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Located at the southern tip of Mexico’s Baja California Peninsula in the state of Baja California Sur, facing the Pacific Ocean, Los Cabos has seen a significant amount of resort development in the past 20 years, though there are still large stretches of undeveloped beachfront remaining. Consequently, Los Cabos retains its sense of seclusion—laid back, undiscovered and unspoiled—qualities that many leisure travelers find highly attractive.

Tourism is the main economic engine with roughly 2 million leisure travelers visiting each year. Submarkets include Cabo San Lucas and San Jose del Cabo. Resorts are also located in a corridor between the two.

Existing resort inventory consists of a mix of U.S.-based global brands, internationally based global brands, local Mexican and regional brands and, finally, a large number of independent properties. Many are all-inclusive and feature golf courses and spas.

Lodging Econometrics reports steady, though hardly explosive, growth in the larger Los Cabos market. Two hotels or resorts opened in 2013, one in 2014 and two through the second quarter of this year for a total of 78 properties, accounting for 12,306 rooms. Five properties are currently under construction, which will add another 999 rooms to the inventory. By comparison, Cancun, another well-known Mexican resort market, presently has more than double (161) the number of resorts or hotels open, accounting for practically triple (36,870) the number of guestrooms.

Wide Brand Representation

Hilton Worldwide, Hyatt Hotels Corp. and Starwood Hotels & Resorts Worldwide’s Sheraton and Westin brands are among the U.S.-based players with a flag here, while IHG’s Holiday Inn, Melia Hotels International’s ME and Melia brands and RIU Hotels & Resorts are among the international contingent. Local Mexican and regional brands are led by Fiesta Americana, Pueblo Bonito, Dreams and Secrets.

Given its growing focus on Mexico, it’s no surprise that Hard Rock Hotels is in the process of adding a Los Cabos property to its portfolio. Plans for the 600-room, all-inclusive beachfront property were unveiled in mid-2014 with completion scheduled for 2016.

Hard Rock already operates all-inclusive resorts in Cancun and Riviera Maya on the Yucatan Peninsula and Vallarta, also on Mexico’s Pacific coast. A fifth property, the 1,800-room Hard Rock Riviera Cancun, also under construction and scheduled to open in 2017. Currently, there are 20 hotels in the Hard Rock portfolio overall worldwide. All Hard Rock’s Mexico properties are part of its all-inclusive collection.

Multigenerational Focus

 Like other Hard Rock properties in Mexico, the Los Cabos resort is being designed to be multigenerational. “Certain aspects are intended to be family-friendly, while other parts are adult only,” said Marco Roca, Hard Rock Hotels & Casinos EVP and chief development officer. Like all-inclusive resorts generally, there will be a high number of food-and-beverage options for guests to choose from—six in the case of the Los Cabos property.

In addition to leisure travelers (both families and individuals), Hard Rock will be targeting the group market in Los Cabos. A total of 54,000 square feet of meeting and event space is planned, both interior and exterior. Guestrooms and public space will be designed to be stylish and contemporary.

Specific to all Hard Rock International properties, including the cafes and casinos, is a celebration of rock ‘n’ roll music, which is woven into many of the resorts’ amenities and programming. The Los Cabos fitness center, for example, will be branded Body Rock; the full-service spa is called Rock Spa; and the gift shop is known as Rock Shop. Famous originally for its marketing of rock ‘n’ roll memorabilia, Hard Rock will continue the tradition at the Los Cabos property with items available for sales as well as displayed onsite.

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