Mexico’s luxury balancing act
High-end development is spreading beyond the country’s heavily visited coastal resort areas. But will tourism dollars come at the cost of the destination’s cultural authenticity?
I fell in love with Mexico with little more than a backpack and a motorcycle helmet. It has always been an intoxicating destination to me, beckoning with soaring mountains, thick jungles, pounding surf, dusty dirt roads and a vibe equal parts sensual, mysterious and warm. Mexico is unlike anywhere else in the world, and over the years, we former backpackers are not the only ones to have noticed.
And, as is the case for many other former backpackers, some of my recent visits have been a bit more comfortable. Make that much more comfortable. Luxury investment in Mexico is booming. The past few years have seen a flurry of five-star hotel openings and announcements. It’s been an outright deluge.
Banyan Tree is expanding in Mexico with six projected properties. Ritz-Carlton Reserve has a property in Los Cabos and will have a second in Nayarit. Four Seasons recently opened its long-anticipated Tamarindo property, bringing the number of hotels in Mexico that fly its flag to five. St. Regis is also growing; an Aman resort is coming. And an Edition. And a Six Senses. Let’s not forget the Auberges, the Rosewoods, the One&Only …
According to CoStar, a global provider of real estate data, analytics and news, Mexico has 191 hotels and resorts in the pipeline. Of these, nearly 25% are in the luxury category. From January to June of this year, eight of the 19 hotels that opened in Mexico were luxe. By year’s end, another 35 hotels and resorts will be opening, 10 of them aimed at the high end.
There’s a reason for this. The luxury segment outperformed other categories during the pandemic, when travelers sought more private, remote and secluded destinations and hotels, said Zach Rabinor, CEO of Journey Mexico. “Mexico is no exception. Private villas and hotels with private entrances boomed, and private aviation thrived like never before. Mexico was well positioned for all of that with warm climates and a deep inventory of open-air, low-density, luxury, boutique hotels and villas.”
This growth is outstanding news for Mexico’s tourism industry, its workforce and those who sell to affluent travelers. But it also makes me wonder what happens when a five-star property lands in a destination that could once have been described as off the beaten path and known for its value. Will the ripple effect of gentrification and rising prices come at a cost beyond dollars and pesos? Will those who travel there mostly to explore its culture find only variations of what global luxury hospitality brands offer elsewhere?
All this isn’t to say that luxury didn’t exist in Mexico prior to the boom, or that luxury cannot coexist with and showcase the authenticity of a destination. But what might be the impact of sudden five-star growth on the soul and the “realness” of Mexico?
A shift in luxury
Hope Smith, owner of Born to Travel, shared the backstory story of the Maroma, a Belmond Hotel.
“A couple from Chicago started coming down to Maroma Beach with their friends and built casitas,” she said. “It was luxury in the sense that it was very far removed from anywhere else, on what’s probably the best beach that still exists on the Riviera Maya. But it wasn’t deluxe in the sense that you had extra amenities. It was deluxe because it was small, boutique and catered to people in the know.
“Maroma Beach has developed so much, but Belmond is trying to retain that small, Mexican feel,” she continued. “I think there are not too many hotels that really have that Mexican feel anymore. They are all big. It will be interesting to see how Belmond’s reopening goes.”
Although many of the openings and reopenings in Mexico are being shaped by global hospitality brands, several appear to be paying attention to the importance of preserving the culture, landscape and identity of the destination. The Four Seasons Resort Tamarindo, for example, is part of a protected area on Jalisco’s remote Costalegre coast along the Pacific, where only 2% of the land can be developed. The experience at the Four Seasons Tamarindo is exquisite, and brand recognition will bring travelers to a part of Mexico that perhaps they had never thought to explore before. The resort also offers favorable rates in pesos for the national market, which creates a bridge to experiences usually accessible only to foreign travelers and creates a more diverse community of guests.
Not far from Tamarindo, Xala is being constructed not only to serve travelers from around the world but to bring benefits to the community. The low-impact development featuring several hotels and residences is also constructing a system to bring potable water to nearby farms. It’s creating a mango plantation to help local industry and has established after-school activities and mental health programs for the kids in the surrounding area.
In the state of Nayarit, another part of Mexico that is seeing a massive influx of luxury resorts, measures are being taken to help ensure that its smaller villages and towns do not become overrun with unsustainable expansions and developments.
“We have a lot of growth in Nayarit, but we want to take care of the community,” said Juan Enrique Suarez del Real Tostado, minister of tourism for the state of Nayarit. “Don’t make a building of six or seven floors. That is not something that will be sustainable. We are growing, but with control, rules and with a lot of training for what needs to be done to sell the destination.”
Nayarit is also pushing to have tourists consider an alternative to the beach destinations that have the highest concentration of luxury.
“The goal is to be able to connect the people that come to the luxury part of Nayarit to the other part of Nayarit,” said Suarez del Real. “We have [Magical Towns] like Jala, Ahuacatlan and Amatlan de Canas. Those communities still have culture, they give you a taste of our home.
“Our challenge is to connect the people from the beach zone to these other communities.”
A focus on value and authenticity
Mexico’s tourism development plans have, for more than a decade, sought to highlight places that reflect the soul of the country in its Pueblos Magicos, or Magical Towns, program. For travelers who may feel like they are getting priced out of destinations where luxury properties have begun to dominate, the Pueblos Magicos are great places to consider.
Pueblos Magicos’ “magical qualities” may be rooted in natural beauty, history, gastronomy, legends or culture. The list grows every year, having reached 177 this year.
They become more attractive still as beach destinations become relatively more expensive, the cost driven in part by the rise of the peso. Many of the newer, off-the-beaten-path Magical Towns not only offer insight into Mexican culture but provide some of the best bargains for those spending U.S. dollars.
“The coastal destinations in general have become outrageously expensive in the past few years,” Rabinor said. “In particular, Los Cabos and Tulum could be cited as destinations with less perceived value for the money. That said, it hasn’t cooled demand in those destinations. And in addition to prices being pushed higher by unbridled demand, we have the combined factors of labor and raw material shortages and an exchange rate that is working against the U.S. dollar.”
Then there are the destinations in Mexico that are popular and offer luxury products but have seen less of a spike in cost while still maintaining a grassroots feel. Mexico City, Guadalajara, Queretaro, Guanajuato and Puebla, for example, are all thriving city destinations where tourism is but one of many layers that characterize the locale, rather than being the entire picture.
“Mazatlan, Ixtapa-Zihuatanejo and Huatulco would count as beach destinations that have seen less increases in price,” added Rabinor.
Change is inevitable
The coast of Oaxaca state presents an interesting study of what the infusion of luxury across Mexico can mean for its future. For decades, the Pacific coast resort area has managed to stay relatively under the radar compared with other beach destinations. But now Puerto Escondido’s development is putting the entire coastline in the spotlight.
A few years ago, Grupo Habita opened the Hotel Escondido, a luxury beach hotel that was a big departure from the predominantly bare-bones surfer hotels and lodges that dominate the area. Our Habitas is opening Our Habitas Mazunte in November, again bringing a higher price tag to a destination that has always been known for its barefoot, salt-kissed, cash-only vibe.
Accepting that development is inevitable, but Puerto Escondido residents are fighting to keep it small in scale and low in impact. They believe that investment and preservation of their culture and ethos can be compatible.
But not all developers — or local officials — see it their way. “There is a law in Puerto Escondido that everything on Playa Zicatela has to be no more than two stories high, in order to preserve the beach,” said Heriberto Sanchez, owner of the Puerto Experience, a local tour operator. “You have the wind from the mountains that comes in every morning and pushes the sand back into the ocean, but when you have big buildings, it blocks that wind. The law has been in place for more than 50 years, but it’s starting to get overlooked by city officials so that they can get investors into the city.”
Residents are pushing back, he said. “Locals are saying, ‘Hey, come to Puerto Escondido but follow the local laws.’ That’s where the conflict lies.”
Perhaps the greatest unknown is what will happen to destinations on the Yucatan Peninsula once the Maya Train opens at the end of the year. It’s expected to bring significant volumes of people to once-remote destinations across Mexico’s southern states, including Campeche and Chiapas. These are destinations that have been loved by intrepid travelers who venture away from the major tourist destinations to see lesser-known archaeological sites, smaller villages and Spanish-influenced cities. But with greater access will come more visitors and, inevitably, more development.
“One cannot overestimate how big infrastructure developments can change formerly remote areas after access is improved,” Rabinor said. “If the train does indeed operate successfully, it will change the vibe of the region.”
When asked if that new vibe would lean more toward the desires of high-end travelers, he replied that it would if there is parallel investment in accommodations and other services that high-end travelers seek. He assumes that will happen “slowly but surely.”
Mexico’s magic persists
It’s true that these days you’re still more likely to find me along the beaches of the Costalegre, the mountains of Oaxaca or the endless dirt roads of Baja than in bigger resort towns.
But no matter what, I believe the best-known beach destinations will always be full of the soul and spirit of what makes Mexico so beloved, and that’s due to the enduring spirit of Mexico.
“Nothing, not even [the overdeveloped destinations], will take away from the soul of Mexico,” Sanchez said. “As soon as you get off that plane, you reconnect with that soul, and that comes from within you and from within everyone here. When you get to Mexico, you still have time to slow down. Even if a person wants their food a certain way, right away, they’re forced to slow down no matter what. Enjoy the time while you’re in Mexico.”
So, yes, Mexico is changing. How could it not? And it is changing faster than ever. But what travelers to Mexico can always count on is that there will always be destinations where you can go off-book, venture into something wild and discover a little bit of magic.
Correction: Our Habitas Mazunte is scheduled to open in November; an earlier version of this article stated incorrectly that it had already opened.
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