Mexico’s Puerto Vallarta experiencing measured growth

Aerial Shot

Located on the Pacific Ocean’s Bahia de Banderas in the state of Jalisco, Puerto Vallarta—and the greater Riviera Nayarit region—has been a major Mexican resort destination since the 1970s. Puerto Vallarta received a publicity shot-in-the-arm in the 1970s, in fact, when the Hollywood celebrity couple of the moment, Elizabeth Taylor and Richard Burton, spent time there while Burton filmed a movie.

Like such competing Mexican resort areas as Cancun and Los Cabos, Puerto Vallarta today features hotel inventory that is a mix of local and regional Mexican brands (Fiesta Americana, Secrets, Villa), U.S.-based global brands (Hilton, Hyatt, Marriott, Sheraton, Westin), Europe-based global brands (RIU, Melia, Iberostar, Barcelo) and independents (Hotel Mousai, Garza Blanca Preserve).

Considering that Puerto Vallarta’s current inventory includes 81 resorts, accounting for 11,824 rooms, there isn’t a significant amount of beachfront land available for development. At the same time, after years of looking the other way when it came to protecting the environment, local authorities have begun to be more vigilant. These two factors, plus rising costs and increased guest expectations, have resulted in fewer new projects entering the construction pipeline during the past few years.

Modest construction pipeline

Indeed, Lodging Econometrics cites only one new project, accounting for 127 rooms, under construction as of July 1. Three more projects (another 570 rooms) were in the early planning stage.

By contrast, Mexico’s leading urban market, Mexico City, had 12 projects, accounting for 1,695 rooms, under construction as of the same date. Meanwhile, four more were scheduled to begin construction in the next 12 months, while yet another project was in the early planning stages.

One U.S-based brand that has grown especially aggressively in the Mexican resort sector is Hard Rock Hotels. In addition to Puerto Vallarta, it operates all-inclusive properties in Cancun, Riviera Maya and Los Cabos with properties on the drawing board in other destinations. Its Hard Rock Hotel Vallarta property features 348 rooms divided among nine different room types. Given its all-inclusive business model, the resort offers six restaurants, covering a range of cuisines from Mexican to Asian, and five lounges.

Other amenities include two swimming pools, a children’s program, full-service spa, 24-hour fitness center and nightly theme parties held in an outdoor amphitheater.

New convention center opening

Group and incentive programs, many coming from the U.S., have traditionally been a mainstay of Mexican resorts, including Puerto Vallarta. With an eye to this market segment, the Hard Rock plans to open a new 12,900-square-foot group facility this year called the Sanctuary Convention Center. Billed as the largest such venue in Riviera Nayarit, it will triple the resort’s existing meeting and event space to nearly 20,000 square feet. In addition to conferences and social events, the facility is designed to host concerts and sporting contests.

The Hard Rock brand is built on a connection to not just rock ‘n’ roll music, but popular music generally. The hotels reflect it not only in their display and sale of memorabilia, but in their design and general ambiance. Hard Rock Vallarta is no exception. The top guest categories, for example, are called Rock Star and Rock Royalty Suites. With a nod to the latest music listening technology, guestroom televisions offer complimentary streaming music channels.

Looking as far out as 2018 and beyond, Lodging Econometrics doesn’t foresee Puerto Vallarta experiencing any dramatic growth spurt. Rather, growth is likely to continue on its present steady, predictable course. Specifically, 2016 should see one new resort come on line, adding 127 rooms to the destination’s inventory. The following year should be quiet, but come 2018 and beyond, three projects, accounting for 570 rooms, are likely to make their debut.

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