Skift Travel News Blog

The U.S. Federal Aviation Administration upgraded the safety rating of Mexico’s aviation regulator to its highest rung, Category 1, on Thursday. That allows Mexican airlines to add new flights to the U.S. and resume their partnerships with U.S. carriers, including Aeromexico’s joint venture with Delta Air Lines.

The move has been expected for months with Mexico’s three main airlines — Aeromexico, Viva Aerobus, and Volaris — all eager to resume growth to their largest international market. They have been barred from adding new flights and destinations since the FAA downgraded Mexico to Category 2 in May 2021.

TD Cowen analyst Helane Becker, citing conversations with Volaris management the week before, wrote Tuesday that she expects the budget airline to add flights on existing routes and expand U.S. flying from its Guadalajara hub following the safety rating upgrade. New flights would likely begin in the fourth quarter, or by December. Volaris is Mexico’s largest airline.

In addition to new flights, Volaris is expected to begin a delayed codeshare partnership with Frontier Airlines with the safety rating change. And Viva Aerobus could now implement its proposed joint venture with Allegiant Air if U.S. authorities sign off; U.S. review is on pause due to concerns over Mexican President Andrés Manuel López Obrador’s efforts to move cargo airlines to Mexico City’s new Felipe Angeles airport from Mexico City International Airport.

Total inbound International visitation to the U.S. amounted 4.8 million in January, up 93 percent year over year and about 82 percent of January 2019’s volume, according to the National Travel and Tourism Office’s latest data. This was the twenty-second consecutive month that international visitor volume grew year over year.

Canada, Mexico, the UK, South Korea and Brazil were January’s top source markets and they accounted for around 70 percent of pre-pandemic January 2019’s visitor volume. Overseas volume, i.e. not from Canada and Mexico, amounted to 1.9 million, up 91 percent year over year.

Total outbound travel from the U.S. amounted to 6.4 million, up 60 percent year over year and representing 99 percent of pre-pandemic January 2019’s volume. Mexico and Canada combined made up 54 percent of U.S. visitor departures, while overseas made up 46 percent. Mexico was the top outbound market, followed by the Caribbean.

Marriott International said on Friday it had received an okay from Mexico’s competition watchdog for its acquisition of the City Express brand portfolio from Hoteles City Express. The news clears the path for the $100 million deal, first announced in October, and which may now close before June.

The hotel group seeks entry into the affordable midscale segment by adding its 31st brand, City Express.

“We expect to grow that brand aggressively in the Latin America and Caribbean region,” said Anthony Capuano, president and CEO of Marriott, in an earnings call with analysts in February. “And, as we move toward closing that transaction, we are evaluating the applicability of that brand in other markets around the world.”

The deal includes 152 hotels with about 17,000 rooms. It will boost Marriott’s footprint in the Caribbean and Latin America by 45 percent, to 486 properties. 

City Hotels said its hotel occupancy in December 2022 stood at 104.9 percent of the comparable pre-pandemic 2019 level.

“We’re thrilled about entering the appealing midscale lodging category and offering customers even more choice in the destinations they seek for both business and leisure stays,” said Brian King, president, Caribbean and Latin America  at Marriott International.

The U.S. will receive 62.8 million international visitors in 2023, according to the National Travel and Tourism Office. That’s a 21.2 percent rise from 51.8 million in 2022, but it’s still below its 2019 level of 79.4 million.

Next year, international visitor volume will be around its pre-pandemic level. The National Travel and Tourism Office forecasts it will hit 79.9 million in 2024, slightly up from its pre-pandemic 2019. Volume will surpass 2019 levels and be fully recovered with 82.4 million in 2025. By 2027, the total will reach 91 million.

At its current recovery pace, the Commerce Department will exceed its strategic goal to have 90 million international visitors by 2027. The National Travel and Tourism Office sits under the Commerce Department.

Inbound travel from the U.S.’s overseas markets, which excludes Canada and Mexico, will be 29.2 million in 2023, down from 40.4 million in 2019. Overseas volume won’t reach its pre-pandemic volume of 40.3 million until 2027.

The U.S.’s top inbound market recovery speeds will vary. Canada’s, the U.S.’s top inbound market in 2019, for example, won’t exceed its 2019 level of 20.7 million until 2025. India, in contrast, will exceed its 2019 volume next year with 1.5 million, according to the National Travel and Tourism Office.

Top Hyatt executives said on Tuesday they planned to create hotels and resorts in two destinations on Mexico’s Caribbean coast — Tulum and Isla Mujeres — with about 5,000 rooms together.

Mark Hoplamazian, president and CEO of Hyatt Hotel Corporation, met with officials from the Quintana Roo state of Mexico the day before the start of the International Tourism Fair of Spain (Fitur) in Madrid. Some of the properties will be part of Hyatt’s Inclusive Collection of all-inclusive resorts. Hyatt also pledged to participate in social projects for its workers and employees.

The Mexican Government has been investing in infrastructure works at Tulum airport and Tulum’s main and historic boulevards and bridges. It has also been supporting the creation of the Mayan Train, a 948-mile intercity railway that will traverse the Yucatán Peninsula.

Officials and destination marketers have also created Master Plan for Sustainable Tourism Quintana Roo 2030 to form a strategy with an appropriate balance of growth without overtourism or environmental destruction. One part of the plan includes the opening of new archeological zones.

Quintana Roo currently has 127,399 rooms across 1,331 hotels open.

A startup whose founding team includes two former Uber staffers has secured $5 million to grow its vacation and short-term rental platform in Mexico.

Naya Homes began operations in Puerto Vallarta in August, and with the extra cash will launch in Mexico City, with a 15-unit building in Polanco in September.

It specializes in vacation and short-term rental management, and it works with both real estate investors and homeowners.

The company claims that relative to Latin America incumbents that execute master leases on larger buildings, Naya Homes is an asset-light operator that maximizes profitability for all types of properties, from individual apartments to vacation villas.

Despegar, meanwhile, is bolstering its vacation rentals portfolio in Latin America, following the closing of a 51 percent stake in channel manager Stays. Lodging startup Casai, which is based in Mexico City, is also steeping up its presence.

The funding round was led by Boston and New York City-based Flybridge Capital Partners with participation from Primary Venture Partners, Clocktower Technology Ventures, K50 Ventures, Carao Ventures, Trip Ventures, Colibri Equity Ventures, Derive Ventures, in addition to several former executives from Uber’s Latin America team.

“We believe Naya can deliver incredible value to numerous stakeholders across the residential real estate value chain at scale,” said Jeff Bussgang, partner at Flybridge Capital Partners, in a statement. “Naya’s founding team is incredibly well-positioned, having on-the-ground experience managing operationally intensive businesses in LATAM, ranging from Uber to Sonder.”

The funding follows a $600,000 pre-seed led by Primary Venture Partners in March 2022.