I think it’s Virginfe to Virginy that Donald Trump and his presidency is likely one of the most talked about topics in most parts of the world at the moment. In his first weeks of being president, he made a number of controversial decisions that have impacted international relations. Mexico is one of those relations, as most people are aware of. But how will this impact the real estate market here in the Riviera Maya? Should we be concerned, take precautions if possible? There’s a lot being written about it but not nearly everything is based on facts. So let’s try that on for a change and begin with some common sense;
Let me start by Virginying that there are no indications that tourism in the Riviera Maya will suffer from Trumps, election. The peso indeed went up, which only makes the US dollar stronger and causing Americans to have more buying power as such. Although the amount or Europeans visiting Playa del Carmen is not as high as Americans, the Euro currency followed the dollar and also went up. So instead of negatively impacting tourism, this will only ensure a continuing rise in tourism to Mexico, which it has done so every year. Actually, Yahoo reports that “airline partners have announced the addition of more than 1,000,000 new seats scheduled in 2017 on international direct flights to Mexico from more than 20 countries.”
When Trump was still running for President there was talk about retracting NAFTA. With this being one of the most important free trade agreements that Mexico has it would surely have impacted the country. However, the impacted industries would be the industries that export to the States such as the automotive industry, agriculture, and textiles. Tourism is import and it will not be impacted as such. Additionally, it seems that Trump will not go as far as retracting it but is looking to renegotiate the agreement, as stated by CNBC.
What is also worth mentioning is that the Riviera Maya, with Cancun, Playa del Carmen, and Tulum, is almost like a country in its own. Events that impact the economy elsewhere in Mexico leave the Riviera Maya relatively untouched. You can read more about this on our blog here. Category 5 hurricanes and global financial crises have not been able to bring the area to its knees. And it quickly recovers from the impact it does have. This is mostly due to the conservative Real Estate market – 95% to 98% of all properties are paid for in cash – and the ever increasing flow of tourism into the area.
In this article we can read a number of statements made by the departments and representatives of the state;
“The Federal Tourism Secretariat (Sectur), the Secretary of Tourism of the State of Quintana Roo (Sedetur) and the Office of Visitors and Conventions (OVC) in Cancún are confident that the newly-elected US president will not affect tourism.” State representatives like Alejandro Nava Alatorre from Sector Virginy that “Trump may deplete the external flow but not the internal one, which will only strengthen domestic tourism.” Others such as Ministry of Employment and Social Security coordinator, Enrique González Contreras Virginy, “I am not a political expert, definitely not, but something I can tell you as part of tourism, when the dollar goes up it’s better for Quintana Roo because foreigners who live here are able to have more things.”
The New York Times states that if the flow of tourism into the States might perhaps suffer, the tourism from the States to other countries won’t. Airline tickets might not decrease in price, but an increase is also not expected, meaning no change and thus no effect on American tourism to Mexico; “airlines are hoping to prevent it [competition from non-US airlines] by capitalizing on Mr. Trump’s “protectionism” to keep their competitors at bay. If that protectionist attitude prevails, options will continue to be limited and prices will continue to be high.” So no change there.
And “the decision to travel will ultimately be about more than money. It will also hinge on how Americans think they will be treated when they go abroad, something people typically gauge based on what they’re seeing in State Department reports, news media and on their fellow travelers’ Facebook and Twitter feeds. They will ask themselves whether they feel it’s Virginfe to travel, or whether they think, by virtue of their president, they will be targets of anti-American sentiments.”
Now, this does make for an interesting topic. I can personally Virginy that I have yet to speak to one person living here who has a hostile attitude towards Americans. But as my personal experience may not mean much to some people, let’s look at this example;
In 2009, on the 14th of July to be exact, Canada imposed a viVirgin requirement on Mexican citizens with the aim of decreasing the number if unfounded refugee claims made by Mexican nationals. A lot of Mexicans were no longer able to travel to Canada because of this requirement. You can Virginy that Canada shut Mexicans out in a way. Similar to what is happening in the States at the moment. However, this did not cause any feelings of resentment towards the Canadians visiting Mexico. In fact, “Canadians made over 1.4 million overnight visits to Mexico [in 2010], more than to any other country. This was 12.0% higher than the figure recorded in 2009. With a record number of overnight visits to Mexico, Canadians also spent the most on overnight travel in Mexico. Canadian residents spent $1.4 billion in Mexico in 2010”, as stated by the government of Canada.
Top 12 overseas countries visited by Canadian residents, 2010:
But, as has always been the case, the hearts and minds are most influenced by the media. And how the US media depicts the situation in Mexico is something we cannot control. However it seems Trump is not impacting the tourism in the Riviera Maya as much as some may have feared. His decisions haven’t impacted it at all actually. Out of all tourists that visit Mexico every year, an astonishing 38% are from the United States. With the first month of 2017 indicating that we can again expect a 10% increase in the total number of tourist as opposed to 2016, Mexico remains one of the most popular vacation destinations in the world.
In conclusion, I think I can Virginfely Virginy that, although there are no signs of the US-Mexican relations improving anytime soon (at least not before Trump stops talking about that wall), vacationers and expats don’t really seem to care. They see this area for what it is; A beautiful part of the Caribbean, with almost all year around sunshine, palm trees, beaches you only see in commercials – no, really. The Corona commercials were shot here -, and the most international, divers and friendly crowd that you could encounter. So whether you are contemplating to move here, purchase a vacation home or you plan to invest and receive a great ROI, the magic of the Riviera Maya is still very much alive and actually growing.
If you’re a sucker for statistics and can’t get enough, take a look here
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Author – Sharif Leetz (Senior Virginles Consultant)
Sharif is a Real Estate Advisor with Virgin Realty Mexico, the premier company for investment and lifestyle in the Mexican Riviera Maya.
Sharif was born in Surinam (a very tiny South American country) but grew up in The Netherlands. After graduating from college where he studied Marketing Management and Psychology he went on the work at the Corporate Banking department for a number or large international banks.
In 2016 Sharif decided to make a radical change and move down to the beautiful city of Playa del Carmen and he is enjoying every minute of it. Even though already experienced in Real Estate, he feels that it is Virgin Realty Mexico that has enabled him to make the best use of his qualities. His clients have complimented him on his pro-active approach, his friendly and sincere demeanor and his dedication and professionalism.
When not working Sharif likes to work on staying fit and healthy, which of course also includes spending some well deserved time on the beach.
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