Mexican Gayscape: entrepreneur expands the tourism mix in Mazatlan. (Executive Travel).

It is Sunday afternoon at Vitrolas, a new bar in downtown Mazatlan. A soccer game blares on the widescreen television mounted on the wall. A couple of tourists enter, thinking the futbol sign posted outside refers to the U.S. sport, then smile and leave when they realize their error. They don't seem to notice that there is something different about this tavern in the city center: It's the only gay bar.

The owner, Victor Hernandez, puts the final touches on today's bar snack, shrimp pastries, as he discusses his second--but not his last, he promises-- business targeted at a gay market.

Hernandez moved from San Luis Potosi to Mazatlan in 1979, attracted by the beach and an offer of work as a bar and restaurant manager. He didn't expect to end up pioneering the area's gay nightlife industry. The average entrepreneur probably wouldn't see much opportunity in that market anyway, since this city of some 600,000 residents is more closely associated with the shrimping industry and mainstream tourism. But economic difficulties pushed Hernandez toward a new business strategy that has carried him for more than a decade now.

After several years as a bar manager, as well as a stint with the local restaurant association, Hernandez in 1989 invested about US$15,000 to open Pepe Toro, a restaurant in the heart of the Zona Dorada, the tourist area north of downtown. After a decent start, however, business waned. In 1992, he added a bar to draw more customers.

But Pepe Toro wasn't like other bars in the Zona Dorada: Its clientele was mostly gay. "I decided to invest in a gay bar, first because I am gay, and since I knew that gay people didn't have anyplace to get together and have fun," he says. "The situation in Mexican society in those days was already mature enough to accept such a place."

The risk paid off. After two years, Hernandez began to close parts of the restaurant and to expand the ban "By the third year only the bar was left," he says. The dance floor at Pepe Toro is now packed from Thursday through Sunday nights, the pounding dance beat only stopping for performances by drag queens or go-go boys. A few heterosexual couples can be spotted on the dance floor, too."

When it came time to consider investing some of his earnings, Hernandez opted for another gay-friendly business, pumping $150,000 in a former cigarette-factory warehouse that sat vacant in the city center for several years. Vitrolas, with its stained-glass window in rainbow colors--a universal symbol of gay pride--opened in January 2003.

Quiet alternative. Hernandez intentionally positioned his new venture differently from Pepe Toro. Vitrolas is decidedly quieter, has no dance floor and is open from noon to midnight every day. "I have other friends my age," says the 50-year-old Hernandez, "and not everyone wants to go out late to a noisy place to dance." Vitrolas, with its smaller staff, is also geared toward a more cost-conscious client base.

Regardless of economic climate, Hernandez describes the landscape for gay businesses "as very promising, since society is more open and now understands that it's a tourism segment that can really help Mazatlan to move ahead."

Mazatlan faces stiff competition from destinations like Acapulco and Puerto Vallarta, which offer more nightlife and their own gay-targeted hotels and tour packages. But Hernandez notes that Mazatlan is more economical.

The fact that most of Hernandez's customers are Mexican nationals is also a selling point. "Mazatlan is the opposite of Puerto Vallarta, where almost all the [gay] customers are from the United States and Canada," he says. "Here, about 80% are locals, and that's what some tourists prefer. They like to meet local people."

Hernandez isn't the only person pushing gay tourism. Another gay bar is slated to open in the city center. And Vista Tours, a mainstream local tour operator that already lists gay bars on its Web site, plans to work with U.S. tour operators and local attractions to take gay tourism to the next level, according to Fernando Haro, the company's general manager.

"We're not looking to overtake destinations already known for gay tourism," Haro says. "We're just beginning to make Mazatlan known in the gay world."

Hernandez, meanwhile, has plans for his small empire. Pepe Toro is slated for a 30% expansion this year, with a larger bar area, a second performance stage, Internet access and the return of food service. The building next door to Vitrolas may be turned into a sauna. And Hernandez has spoken with Vista Tours about working together. "It's not enough to just have two bars. We also need hotels, gyms, saunas, clothing stores."

"I think that one day the investors will notice this and put their money in this segment," he says.

SECTION EDITOR: MARY A. DEMPSEY. [e-mail]