Business in Paradise - February 2004

by Lee Kraft

It’s high season again and people are flocking into Mexico from all over the USA, Canada and Europe. Business has been going quite well for Ixtapa-Zihuatanejo in general, and for the hotels, restaurants and shops in particular. It must be said, however, that since 9/11 the industry has changed somewhat and the percentages regarding the origin of our visitors have shifted significantly. Hotel occupation has grown slightly, but instead of 60% foreign visitors, the destination now receives only 35% to 40% from abroad and above 60% come from within Mexico instead. In a way that’s good news, because Mexicans are big spenders, some of the best in the world, as a matter of fact, …just ask hotels and tour operators in Europe. The weekend and school vacationers from our neighbor state Michoacán are buying condos and building new homes in Ixtapa. It’s a pity, however, that the US citizens seem to have lost confidence in air travel. The “terror of terrorism” and the continued promotion of fear have left a distinct mark on the tourism trade everywhere. To quote a Greek philosopher: “the words you use to describe your reality create reality”.

The local tourism industry is aware of the fact, that Ixtapa-Zihuatanejo needs to recover market shares in the US and Canada. It’s time to promote our destination again north of the Rio Grande. Some steps have already been taken and as a result scheduled flights to ZIH are increasing to pre 9/11 levels. New non-stop services from important hub airports in the USA are part of the winter itinerary. The most important news: American Airlines is coming twice per week from Dallas, connecting ZIH to it’s worldwide network of destinations and Frontier also operates two weekly frequencies from Denver, with connections to a good number of important cities (see box). Both new services are scheduled to continue during the whole year, although the frequency might be reduced to one flight per week during the summer and fall. Other scheduled flights include Continental Airlines daily from Houston, America West once per week from Phoenix and Alaska Airlines daily from Los Angeles and three times per week from San Francisco. With non-stop flights from and to such important hub airports as Dallas, Denver, Houston and Los Angeles, visitors from all over North America can now connect comfortably to Zihuatanejo.

While regular flights arrive at ZIH all year long, charter flights, on the other hand, operate almost exclusively during the winter months, but the list of originating airports is growing as well. According to Jorge Morales, head of the Zihuatanejo airport, OMA – a subsidiary of Aeroports de Paris (ADP) – owner and operator of ZIH, is satisfied with the overall air traffic development and continues investing into the infrastructure at a rate of 25 million Pesos per year, mainly in the passenger terminal, which has grown from 5,600 square meters to 9,000 square meters, featuring new lighting, a special elevator and other facilities for handicapped passengers. The ramp recently grew as well, with an additional parking position for wide body aircrafts. At this time the biggest airplane flying into ZIH is the Lockheed Tristar with 350 passengers on board. Although the runway has the capacity for a B-747-200, we have not seen one here for quite a few years.

During February or March, the Capricho, a beautiful boutique hotel in Ixtapa, which was designed by architect Enrique Mueller, will go into the final construction phase. Mueller built famous Casa que Canta in Zihuatanejo and some of the most spectacular private homes in the area. After the demise of one of the main shareholders of Capricho, the project was stopped for almost two years, but according the General Manager, Marcela Mier y Concha, we should be seeing the inauguration of the beautiful property sometime soon.

Enrique Mueller is working on another interesting project in Ixtapa, right within the premises of the Palma Real golf course. The new development is called Meridiana; it’s composed of 22 lots and 150 condos next to the fairways of holes 3 and 8 and will operate under a system of full time ownership with hotel and rental service. Information is available from Lourdes Blanco at phone 044-755-102-3546.

The take-over of the Sheraton and Krystal hotels in Ixtapa by Spanish hotel companies Barceló and NH respectively diluted the once excellent level of our local hospitality industry. Both hotel groups, as well as the Radisson and Continental now cater to mass markets – instead of the previous philosophy of personalized service – and have adjusted the rates accordingly. The disappearance of the Aristos (have you noticed, the building is gone?) on the other hand and the construction of Bay View Grand in it’s place, hopefully will make up for the above mentioned. Bay View Grand supposedly will be run by upscale hotel operator Quinta Real, but inside sources inform, that, although the logo of Quinta Real is displayed at the property and all over the website and printed promotion material, the contract with the Guadalajara based company has yet to be signed.

While the Intrawest property in Zihuatanejo is in it’s final phase of construction, a mega-development above Playa de las Gatas just began with the preparation of it’s infrastructure on December 23rd. Cerro del Vigia is a 170,400 square meter property, designed for 220 homes sitting on 450 square meter (about 4500 square foot) big lots, the lots being priced around 80,000 USD each.