Hotel Industry in Mexico Reports Negative Results for Q1 2019

Rendering of the Caesars Palace Luxury Resort Coming to Puerto Los Cabos, Baja, Mexico
Hotel Industry in Mexico Reports Negative Results for Q1 2019

Mexico's hotel occupancy dropped 4.9% to 61.9% in the first quarter of 2019 while ADR declined 2.4% to 2,554.40 Mexican pesos ($134.40) and RevPAR decreased 7.2% to 1,582.40 pesos ($83.26).

Mexico’s hotel industry reported negative performance results during Q1 2019, according to data from STR.

Compared with Q1 2018:

• Occupancy: -4.9% to 61.9%
• Average daily rate (ADR): -2.4% to MXN2,554.40
• Revenue per available room (RevPAR): -7.2% to MXN1,582.40

The absolute occupancy level was the lowest for any Q1 in the country since 2013. The year-over-year dip in occupancy came as a result of healthy supply growth (+2.7%) and weakened demand (-2.3%). STR analysts note that beyond the continued security concerns affecting tourism, the government’s decision to disband the Mexico Tourism Board has begun to affect performance levels, as the combination of an unsafe image of the country and the lack of an organized approach might have travelers looking at alternative destinations.

Among STR’s defined markets for the country, Mexico Northeast registered the largest increases in ADR (+5.1% to MXN1,328.38) and RevPAR (+2.7% to MXN821.83).

Mexico Central South experienced the only rise in occupancy (+1.3% to 51.0%) and the only other lift in RevPAR (+2.5% to MXN567.11).

Mexico Northwest posted the only double-digit decrease in occupancy (-12.0% to 56.6%), which resulted in the only double-digit drop in RevPAR (-13.0% to MXN1,783.00).

Mexico Central North saw the second-largest decline in RevPAR (-8.5% to MXN1,094.51), due primarily to the second-steepest drop in occupancy (-8.5% to 58.9%).

Only two markets reported decreases in ADR: the Yucatan Peninsula (-4.8% to MXN4,053.03) and Mexico Northwest (-1.1% to MXN3,150.28).

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