Investor Alert

Jan. 16, 2021, 8:30 a.m. EST

Mexican Resorts Get Creative Amid Pandemic

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Before the onset of Covid-19, Mexico’s Baja Peninsula served up a luxury resort and real estate market hotter than the sun over the Sea of Cortés. With successful properties and new projects running from Los Cabos north to Loreto, the region’s reliable weather and friendly exchange rates brought Americans south of the border at an ever-growing pace.

Then, as the coronavirus disrupted multiple industries around the world, the pandemic shook Baja properties to their sandy foundations. The resorts and real estate communities closed in March of last year and underwent a staged reopening amid an uncertain economic environment.

As a result, the minds behind the hotels, resorts, and high-end housing opportunities had to chart a new course—looking to continue the area’s growth, rather than just manage fiscal survival.

As a first case study, consider the careful adjustments made at the Villa Del Palmar Beach Resort and Spa, with its partner Danzante Bay at the Islands of Loreto community. About 200 miles north of Cabo San Lucas, Loreto is Baja development’s latest focal point along the Gulf of California. Anchored by a charming and historic seaside village, the region is what Cabo San Lucas was a few decades ago before tourists and high-end real estate brought in an influx of tourists and expats.

Owen Perry , hotelier, real estate developer, and founding Partner in The Villa Group, has called Mexico home for the last 35 years. He discovered Loreto while exploring Baja away from the rigors of the office. 

“I really thought there was something there,” Perry says. “With our experience developing in Mexico, even in rural areas, we had the expertise to build in a place very few people knew.”

Now at 140 hotel rooms and more than 100 lots taking on private residences as part of what Perry calls “phase one growth,” the dual Loreto properties added the TPC Danzante Bay golf course and started to get a profitable foothold in 2018. Slowly adding flight access through a regional airport, a steady increase in the real estate and vacation businesses had the Loreto long shot well-established by early 2020.

Then, Covid-19 spun the dial, leaving Perry and his team to consider how to update plans for continued growth at Loreto. After weathering hurricanes, the travel industry disruptions of 9/11 and other crises during his work in Mexico, Perry turned to lessons learned during the Great Recession of 2008 in the face of the pandemic.

“I learned during the recession that we can only do so much at once,” Perry explains. “During Covid, we decided to focus first on building up infrastructure.”

Working with contractors, the Villa Del Palmar project stepped up work on hiking paths and roadworks, including a four-lane road leading from the property’s highway entrance to the resort and golf course.

Then, Perry chose to shuffle new construction plans, moving the building of more timeshare-friendly hotel suites forward and scheduling new condominium creation for after the resort increases capacity to 340 keys.

“We partnered with contractors in Mexico who were eager to keep their business operating during the pandemic,” Perry says. “We have a full construction camp on site to offer services to the workers and to limit the possibility of infection. We extended enhanced safety and cleaning procedures across the entire property for guests and staff.”

“We’re at full speed on our hotel tower construction, with the condominiums to follow. I believe the pandemic is a short-term problem, and we’re using this time with an eye to the future.”

Down south in Cabo San Lucas on the Pacific side of Baja, the crew at the Pueblo Bonito Golf & Spa Resort turned to a creative alternative strategy to maintain bookings during the pandemic. 

The self-contained, all-inclusive resort destination offers more than 201 suites, the Armonia Spa and access to the world-class Quivira Golf Club (designed by Jack Nicklaus ). As Pueblo Bonito and its linked Sunset Beach Golf & Spa Resort gradually reopened during the pandemic, it was decided the properties would take advantage of the new “work-from-home” culture.

According to Enrique Gandara , vice president of sales and marketing for Pueblo Bonito Golf & Spa Resorts, the property’s Productive in Paradise offer invites professionals of means to run their home office with a beachside view.

“The whole idea was to create a safe, extended-stay opportunity for busy professionals to keep the work wheels turning during the pandemic,” Gandara says.

Whether based at Sunset Beach Golf or the nearby Montecristo Estates Luxury Villas, the “work from resort” plan offers complete office and IT support, enhanced high-speed wifi for Zoom, and teleconferencing, scanners, printers, and photocopying services. Shipping and receiving options are also available through DHL and Federal Express. Of course, the guest has access to the resort’s other amenities, including restaurants, beach access, complimentary parking, laundry, and dry-cleaning services.

All of these services are available during the pandemic with the same continued enhanced cleanliness procedures in effect around the resort. Mandatory masking, social distancing and continual sanitizing remain in effect. Also, all individuals entering the property (including guests, residents and staff) are disinfected head to toe before entering the resort grounds. Finally, Pueblo Bonito’s administration is working on plans to enable mandatory Covid-19 tests required by U.S. guests before they can return home.

Gandara says those guests who already took advantage of the extended stay option reported “an ideal work environment where they can be productive, coupled with family vacation amenities delivered in a clean, safe environment.”

All guests, residents, and staff throughout the Pueblo Bonito properties adhere to strict cleanliness and safety protocols, including masks, social distancing, and disinfecting before entering the grounds.

“For us, Productive in Paradise is the ultimate win-win,” Gandara says. “Discounted pricing makes the package especially attractive. The longer guests stay, the more they save.”

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