Cashing in on conventions: new trends in the meetings industry.

Mexico's on a roll as far as meetings are concerned. Analysts report an upsurge in business compared to the days when conventions barely squeaked by with decent returns. The government and private sector are pouring more money into infrastructure and the segment is looking good.

"We are not only a leisure destination. But we have to prove that we are more than that," said Eduardo Chaillo, executive director of the Office of Congresses and Conventions at the Mexico Tourism Board's Chicago office, during a speech at the recent Third International Meetings Place Mexico convention in Merida.

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"How's Mexico doing? We jumped from 27th to 11th place (internationally) in meetings," he said. "One third of all U.S. companies holding meetings abroad come to Mexico, representing a 27.3 percent increase in business travel from 2003 to 2004. For example, there were over 40 international congresses in Mexico in 2004."

On the leisure front alone, last year Mexico capped 11th place in number of tourists and 10th in revenue, which shows a positive trend of shortening the gap between the two, he said. There was a 10.5 percent increase in international visitors and 14.61 percent increase in international revenue.

Regarding the 15 percent VAT exemption for international conventions introduced last year, Chaillo said he expects incentive groups to be included in the exemption soon. Another government initiative will be to place meetings specialists in each office of the Mexico Tourism Board abroad. "We are trying to speak your language," he added.

A new brand concept has also been created that emphasizes Mexico's business infrastructure, he said. The Mexico Tourism Board unveiled Brand Mexico during the Acapulco Tianguis (fair) a few months ago, and new cutting edge ads--"trying to go out of the box in ad creativity"--are being launched, Chaillo said.

Meetings Place Mexico, the official tianguis of Mexico's meetings industry, was sponsored by the Mexican Ministry of Tourism, the Mexican Tourism Board and state government of the Yucatan, among others.

This year's host city, Merida, one of the most gracious cities in Mexico, is surrounded by some of the most famous Maya ruins in the world. Its elegant colonial churches, turn-of-the-century mansions, museums and appealing main square, which features non-stop folk music and dance on Sundays, has earned it the title of cultural capital of the region.

Meeting planners can take advantage of its Siglo XXI Yucatan Convention and Exposition Center, which has over 65,000 square feet of meeting and exhibition space. Plans call for more divisible conference rooms. The largest hotel property is the Fiesta Americana, which has four salons for between 40 to 1,000 attendees. A new Inter-Continental hotel with a conference room for 400 opens in November, with another world-class hotel being programmed for 2007.

Wave Of New Hotels

Meanwhile, other new hotels and resorts are on the rise throughout the country. The Hilton brand, which has over 3,600 hotel rooms and is one of the largest international hotel chains in Mexico, will add eight more properties with nearly 1,200 rooms. Among the brands being developed are Hilton, Embassy Suites, Hilton Garden Inn, Hampton Inn and Homewood by Hilton.

Amid a backdrop of rising occupancies, Los Cabos in Baja California in mid-April opened the 154-room Pueblo Bonito Pacifica, the area's premiere wellness and relaxation resort featuring a holistic spa. Puerto Los Cabos, a new marina and resort complex, will launch its marina in the fall of 2006, while construction of two golf greens by Greg Norman and Jack Nicklaus will open the first phase of nine holes in the first half of 2006. A 2,000-acre resort and residential project, it will have four hotels along with an eco-park.

The Pueblo Bonito Sunset Beach and Resort & Spa just added 36 suites and will grow from its current 398 to 640 suites by 2007. Also, the Sheraton Hacienda del Mar Resort & Spa added 100 rooms to increase the count to 270. A pair of ocean-view terraces used for functions and cocktail receptions is new at the Marquis Los Cabos.

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Take a world-class capital city like Mexico City with pre-Hispanic ruins and 16th century palaces surrounded by modern infrastructure and you have a good mix for business meetings. In addition, many of the city's top-of-the-line hotels are enhancing facilities to make them even more appealing to meeting planners.

For example, the Nikko hotel is investing US$10 million in renovations, including US$3.5 million earmarked for 16 banquet and meetings salons. New light and sound and high-tech installations are among the additions to the conference rooms, which can accommodate from 20 to 1,200 attendees.

The 155 rooms on the executive floors will also get a makeover with added wireless Internet access and 24-hour butler service. The Athletic Center will be expanded with a driving range and putting green, and the tennis courts are being resurfaced as part of the program.

The Sheraton Maria Isabel is also putting the finishing touches on a multi-million-dollar remodeling with the addition of high speed wireless Internet and new state-of-the-art Sweet Sleeper Beds for its 755 rooms. The Towers Lounge has been enlarged to accommodate families and the lobby bar has a completely new set of furnishings. The convention area, which can hold up to 2,000 attendees, has new audiovisual equipment, air conditioning and ergonomic chairs. According to Veronica Dulche, head of public relations for the hotel, groups and conventions business has grown 30-40 percent.

Meetings Growth

Hilton plans to open several hotels in Mexico City, including an Embassy Suites in December plus future Hilton Garden Inn and Homewood Suites by Hilton. "Our principal target is groups and conventions, especially at the Cancun property," Lionel Vasquez, director of Hilton Latin America, said.

Carlos Fernandez, director of sales for the Sheraton Centro Historico, said his hotel, although opened just a few years ago, is expecting more growth in meeting groups in 2005 and 2006 to bring the level up to 30 percent.

Other brands adding hotels to their portfolios in the next couple of years include Inter-Continental and Grupo Posadas, apart from several government-sponsored developments like Puerto Cancun. The US$600-million mega-project will encompass three areas--a marina with 325 slips, which will target the East Coast of the United States; a championship golf course and hotels; and a residential area. The plan calls for 4,200 hotel rooms, all five-star. The first stage of the marina and golf course will be finished in the next 24 months.

Further south a Mandarin Oriental and Fairmont Mayakoba will open later this year along the Riviera Maya. The Fairmont will consist of two-story casitas, which face the ocean, jungle or mangroves. A Greg Norman par-72 golf course is being built around four cenotes. A signature 3,000 square-foot Willow Stream Spa will be opened to complement the tennis courts, pools and seven restaurants. Event space will encompass a spread of 27,000 square feet and an on-site meetings planner as part of the program.

Mexico City is also building a new air terminal that includes fifteen more conveyer belts, doubling the size of the main walkway inside the airport, new ramps to the parking garage and new customs and immigration area. This will facilitate the flow of the 25,000 people who pass through the airport on a daily basis.

Patricia Alisau is a travel writer based in San Antonio, Texas. She lived in Mexico for more than 20 years and still travels extensively throughout the country.

Story and photos by Patricia Alisau

RELATED ARTICLE: Convention Trends

What's happening in the sector?

Carlos Vasquez Iturralde, head of Expo-Guadalajara, Guadalajara's convention center, spoke to BUSINESS MEXICO about new trends in Mexico's convention and meetings segment:

What are the trends in convention hotels?

In 1995, the Mexican market was one of buyers but, today, because of the growth of hotel occupancies, it's the reverse phenomenon, converting (the country) into a seller's market.

Mexican hoteliers have traditionally been the motor that has driven promotion of our country. The offer of square feet in salons for conventions has tripled in 10 years. Hotel infrastructure and venues for trade fairs have grown the most. There are 38 convention centers in 56 cities, not counting upscale hotels with top-notch facilities, more than 3,100 luxury hotels with 245,000 guest rooms and nearly six million square feet of event space. There are also 57 international and national airports and 42 sites for trade fairs.

In convention centers?

In destinations and conventions, we have witnessed ten years of agitation, drastic changes in our industry and in national and international politics. We had a period of uninterrupted growth for six years and Mexico, with 12.5 percent of the market, is the third most popular destination for congresses after Canada and Europe. This tourism segment has registered more growth in the last couple years than any other place in the world.

The business tourism segment has experienced favorable growth. Specialized organizations have been created, infrastructure has grown 200 percent in some areas and 300 percent in others. Today Mexico receives more visitors than ever in its history. There's clear evidence that the increase is related to the growth of conventions and incentives. International tourism now represents 56 percent (of visitor numbers) compared to 1995 when it was 38.5 percent.

Infrastructure is important in attracting groups to a facility, and conference centers like ours are expanding and renovating to meet the needs of attendees. In conclusion, we can affirm that Mexico has developed its infrastructure, its quality of services and organizations. Now, we can continue growing and consolidating them.

In technology (wireless, high speed Internet access)?

Mexico, considered a developing country, lives up to its new designation with its excellent telecommunications infrastructure, including voice and data transmission, optical fiber, broadband Internet-smart buildings and cutting edge technology, all of it integrated into state-of-the-art meeting facilities.

Is the new Meetings Online launched by the Mexico Tourism Board a positive initiative?

(Earlier this year, the Mexican Tourism Board launched Meetings Online, an online service for meeting planners that allows them access to Mexican suppliers, meetings facilities across the country, registering for RFP (Request For Proposal) and rates. The information is available in seven languages including Spanish and English at www.visitmexico.com.)

Today, we count on an institution focused only on promoting Mexico, with many resources--the CPTM (Mexican Tourism Board). Its creation in 1999 completely changed the vision of tourism and created a business strategy to separate the markets, with special emphasis on our activity through the creation of the OCC (Office of Congresses and Conventions) and Eduardo Chaillo as its executive director.

Today the industry has evolved and grown, broadening its organizational capacity, generating infrastructure by gigantic steps, creating employment and reaffirming in a solid manner the importance of Mexico as a congress, convention, incentive and exposition destination.

Meetings Online from the CPTM has been a great tool to promote our venue online through RFP (Request For Proposal). So we will have a greater access to meeting planners worldwide.

Other government initiatives?

This year marks the first anniversary of the very popular (initiative to eliminate the) 15 percent Value Added Tax (VAT). The first country to introduce the "zero tax" or "tasa cero," the reform has positively encouraged business travel and has made Mexico a much stronger competitor in the international events market.

Congresses, trade fairs, expositions and international conventions are now considered an export service by the Mexican government. In order to qualify for the tax exemption, the event has to be operated by a Mexican organizer, venue or hotel, and to be certified by the Mexican government. The organizers must prove that all attendees at the event are international and the company hosting the event must be based abroad.

In meeting space?

In 1995, very few hotels had occupancies in the conventions and incentives segment that topped 30 percent. Today, we find that the occupation (levels) of mainly incentives but also conventions and association (meetings) are 40-50 percent.

What are the new trends in Guadalajara?

For more than 20 years, Guadalajara has specialized in this type of event and actually the private sector and Expo Guadalajara have developed projects for the creation of convention centers to assist this business segment. This segment has awakened a particular interest and it's being included in tourist projects in order to promote it more.

New hotels?

There are three hotels under construction plus five more being projected for the metropolitan zone of Guadalajara for approximately 1,200 more rooms. This shows that we are promoting business tourism.

New golf courses?

Guadalajara has six courses, which are the Chula Vista Country Club, Santa Anita Golf Club, Las Canadas Country Club, El Palomar Country Club and the Atlas Country Club. Las Lomas is a new one under construction.

--Patricia Alisau