Editor's note: Quotes in this story were originally spoken in Spanish and come via a live translation provided by the conference.
MEXICO CITY — In recent years, hotel guest behavior across demand segments has been evolving and even blending in some cases.
During HVS' 2024 Mexico Hotel and Tourism Investment Conference, hotel executives spoke about how guests behavior has changed during the booking process and their stays.
Guest Segmentation
Grupo Posadas’ hotels had been focusing on the bleisure traveler segment — guests who wanted to enjoy a weekend during their business trip and get to know the area better, said Héctor Villarreal, director of development at Grupo Posadas. After the pandemic, this guest segment has grown.
These travelers have shown particular interest in local cuisine and museums, he said.
“These stays have been increased and they have turned to four to five nights instead of two or three,” Villarreal said. “There are some that also stay for over 10 nights. They are working, they stay during the weekend, and they keep working for the following week.”
Monterrey, Mexico, has recovered faster than other parts of the country because of business travel demand, said César Chávez, director of development and asset management at FibraHotel. It’s also seen an acceleration in group demand due to a large number of events, including festivals and concerts.
Mexico City as a hotel market largely recovered after the second quarter of 2022, but other areas of the country are dealing with more complicated situations, he said. In the southeast, there are two to three companies that have restarted their businesses, so hotels in the area have been able to optimize rates.
The Hyatt Regency Polanco in Mexico City has a high number of international guests, said Alfredo Reynoso, regional vice president of development for Hyatt Hotels Corp. Business travelers have returned quickly while group and convention guests have come back at a slower pace.
Among recent changes in guest behaviors, leisure guests are more likely to book last minute, but they’re also staying longer, he said. Business travelers are traveling less and working from home more, but also staying longer in some destinations.
Group demand is now dominated by smaller groups, Reynoso said. Instead of a big event with one food and beverage menu, now there are five events at the same time requiring five different menus and five teams to work with the groups.
“What we can see is that there are different behavior patterns in each of the segments,” he said. “We’re adapting to that. In the hotel business, you adapt or you will die.”
Determining Rates
Setting rates for groups requires balancing costs and features, FibraHotel's Chavez said.
Generally, members of hotel loyalty programs are willing to pay a better rate, Villarreal said. But the redemption rate at a hotel in Monterrey won’t be the same as in another city in another segment.
Average rates in some cities can reach 2019 levels or pass that mark, Chavez said. However, rates haven’t increased at the same pace as costs.
“At the end of the day, we can control what can we sell, but the salary and minimum wage increases, energy costs and forecasts are a different issue,” he said. “That is something that we have as a challenge; the increase is not at the same time or parallel as costs.”
Villarreal said as expenses have grown, the goal is to improve profits, and that should come through better rates, not just growing occupancy.
In some bigger cities, such as Guadalajara, Mexico City and Monterrey, hoteliers have increased rates properly, he said. They’ve learned that lower demand does not have to mean lower rates. Travelers staying in big cities need to pay rates for such a market. The data shows, however, that many hoteliers, particularly those working independent of a brand, haven’t learned this.
“They don’t have this education, and that hasn’t allowed a proper increase in rates,” he said.