Business in Paradise - March 2003

by Lee Kraft

For our visitors each day in Ixtapa-Zihuatanejo is another day in paradise,Is it true for local businesses as well?

Hotel occupation is up, time-share developments are doing well, new condos and vacation homes sprout in Zihuatanejo, Ixtapa and also in Troncones and Barra de Potosí. A couple of new upscale boutique hotels are “in the making” and since September 2001 we fortunately have not seen major incidents in the U.S. or elsewhere, that would have influenced the tourism industry, although that might have changed by the time you read this article. Contrary to other beach resorts in the world and in Mexico, Ixtapa-Zihuatanejo keeps growing in spite of recent world history: During the first ten weeks of 2003 (until March 9th) hotel occupation has increased 6% (*) over the previous year. 2002 also held a couple of surprises: 4% increase over the previous year and the best summer in 14 years. Hotels in Zihuatanejo and Ixtapa are extending labor contracts and will hopefully maintain most of the employees for the entire year, and not just during the few months of high season. A pretty stimulating picture for the population and the business community.

Of course, there is no perfect place on earth, and while we are confident that our visitors enjoy vacationing in paradise, many of the local businesses seem to have had a hard time lately. When talking to restaurant and shop owners or tour guides in Zihuatanejo and Ixtapa you might end up listening to a worried friend. “Last year was better” is the general consensus. This might be true, but isn’t it only natural that business is slower? Directly or indirectly we are all affected by world affairs and the economy has not been looking very bright for some time now. Everybody seems to cut back on spending. This might be a poor consolation for someone who is experiencing difficult times, but it’s a fact and fortunately our community has not been hit as hard as other destinations. When comparing Ixtapa-Zihuatanejo to other beach resorts in the country, we are doing all right.Most restaurant owners are unhappy about the all-inclusive hotels, but in a resort like Ixtapa-Zihuatanejo all-inclusive hotels are a reality and necessity in order to cater to a big segment of the tourism market. It would, however, be desirable to find ways to spread more of the income from this segment. With a bit of creativity and good will, there are ways to accomplish this. If you have had the ill fortune to be harassed by OPC’s you might not agree, but time-share resorts have also been quite beneficial to the resort. They bring more repeat business than most of the bigger hotels and a clientele willing and apparently more capable of spending money on a lot of goods and services. Upscale boutique hotels, private condos and villas are a blessing for the destination because they not only attract investment/money to the local economy, they also bring people who care, come back and actively promote Ixtapa-Zihuatanejo. Speaking of promotion, the Visitors and Conventions Bureau or “Oficina de Convenciones y Visitantes” (OCV) is presently the only organization with some financial resources and the mission to lead or coordinate the efforts of hotels, developers, Fonatur, municipality, travel agencies (DMC’s – Destination Management Companies) and other businesses in the tourism industry. If you have ideas or projects you think would work for the PROMOTION of our destination, you are cordially invited to present them to Gloria Hernandez at the OCV: g.hernandez@ixtapa-zihuatanejo.org .

The big hotels in Ixtapa naturally invest considerable time and money in promoting their properties. Investing some of the additional income into the hotels, we could and should be able to attract a higher income clientele from national and international markets.

For the near future, catering specifically to the national Mexican clientele seems to be the answer to a complicated international scenery. It’s not only the logical alternative to an unstable international market, but shifting to a higher percentage of Mexican visitors is a solid option. Most everywhere in the world, Mexicans are rated (right after Arabs) as the very best customers (the biggest spenders). Hotels and incoming travel agencies (DMC’s) in Europe will confirm this fact. The almost finished highway to Morelia has given Ixtapa-Zihuatanejo already a boost. Besides being an opportunity to attract a lot more people from the “Bajio”, that highway is a great new attraction and will some day soon be an important added value to our resort. A vast new market – Guadalajara – has barely been tapped. The driving distance between the capital of Jalisco and Zihua will be around five hours, the same time it takes to drive from Guadalajara to Vallarta. With the more secure and comfortable highway via Morelia, Ixtapa-Zihuatanejo is the natural alternative beach destination for 8 million Tapatios. All that needs to be done is to promote to the right group of visitors from Mexico’s second biggest city.

Even if this article seems to agree with the title of the magazine, paradise is a big word and a very relative thing and not easily found on this planet. Someone said “Zihua is as close as it gets”. I agree wholeheartedly.

(*) According to SECTUR, the (Mexican) Federal Tourism Ministry, hotel occupation in town is up and continues outperforming other years. If you are interested in details, I can recommend a very well managed website with statistics, “dynamic comparisons” and a lot more interesting information about the national tourism industry: www.sectur.gob.mx. For statistics go to the section DataTur.