All Forum Posts by: Benjamin Canyon

Hey everyone,

Currently in tulum and couldn’t help but notice how it’s still packed despite a pandemic. I’ve also noticed a few condos for sale.

Would you or have you invested in an area like this? For Airbnb or housing for the local workers etc?

Would love to hear about it

Thank you!!

@Tak Ogihara Interesting, I did not know major hotels are not allowed in Tulum. Thanks for that info. 

@Mike Lambert This is great advice. My sweetheart and I just got back from her 1st trip to MX (many more for me) and we are considering investing in a condo in the area. We visited PDC, Tulum, Akumal and Puerto Morelos. I would say out of all of those cities, PM is our favorite place to look at investing first. But of course we need to research the areas more for property values, rent rates, new development, etc.

This would clearly be a very risky move, but has anyone considered buying a vacation rental in a vacation based rental market such a Tulum, Mexico?

Unlike certain sub markets in the US that are very hot right now due to low inventory and high demand, I feel somewhere like Tulum may offer deals that cannot easily be found here in the states (or at least where I am in Annapolis, MD).

I’ve done some quick research and there are most definitely discounts to be found... the question is, when will tourism return to normal? Could be months, could be years...

Full Disclosure - I love Tulum and would love an excuse to own a condo there to visit.

I just did an analysis of Playa del Carmen vs. Tulum with interesting data. (I will share all the information sources at the end of the reply). I really think this comparison will help investors. 

I’m interested in sharing facts and letting investors reach their own conclusions, so I did a side-by-side number comparison:

Foundation and Population:

Playa del Carmen was founded in 1993.

Tulum was founded in 2008.

That's a 15-year difference. 


I've heard several investors and realtors say that buying in Tulum now is like buying in PDC was 10-15 years ago --I'm curious to hear what you guys think.

Population (2020 census): 


Playa del Carmen: 304,942. 


Tulum: 46,721.


Playa has 6.5 times the population of Tulum.

However, it all depends on what your target market is, along with your renter profile: are investors looking to rent long-term to residents? Or are you looking to rent short-term to tourists?

PDC’s growth in the past 10 years:

The 2020 census numbers show a whopping 103% increase over the population numbers of 2010. In the past 6 years alone, Playa Del Carmen’s population has grown just over 63%.

According to the census count, the population of Playa Del Carmen stands at 304,942. This is a 103% increase over the 2010 census numbers for Playa, which amounted to 149,923.



Tulum’s growth over the past 10 years:

In 2020, the population in Tulum reached 46,721 inhabitants. Compared to 2010, its population grew 65.3%.



Key differences: 


1. Beach access 


2. Beachfront density 


3. Infrastructure 


4. Tulum is a Magic Village, which means it receives a little more public promotion and investment from the government. 


5. Upcoming private and public projects. 


Public and private infrastructure projects:

1. Mayan Train: Biggest project of the current federal administration, with an approximated cost of almost US$9.81 billion. It will span approximately 1,500 km (932 miles) and will link the states of Chiapas, Tabasco, Campeche, Yucatán, and Quintana Roo, with a total of 21 stations. Playa and Tulum will each have their own train station. Due to be completed in 2023, construction is already in progress. 


2. Tulum Airport: Set to be completed by 2023, it is projected to receive 4 million passengers. 


3. Tulum’s bypass to reduce city traffic. 


4. Formula 1 race track just 15 minutes away from PDC.


5. Green School in Tulum. 


6. Both cities have private projects featuring new shopping malls, cinemas, and supermarkets. 


7. Extension of the highway to Bacalar.

AIRBNB, VRBO (AIRDNA) AND HOTEL COMPARISON Note: It’s hard to separate hotel occupancy rates between Tulum and Playa because the state’s Tourism Ministry lists both cities under the same category --Riviera Maya-- and the hotel comparison is made by municipality):

Playa del Carmen has 11,105 active listings. 


Tulum has 5,422 active listings. 


That is a difference of 5,683 listings, which means Tulum has 48.82% of the listings that PDC has active. 


Playa has 285 hotels with 43,771 rooms. 


Tulum has 159 hotels with 8,390 rooms. 


That is a difference of 126 hotels and 35,381 hotel rooms, so Tulum has 19.6% of the number of rooms that PDC has. I believe this is partly because there are several large all-inclusive chain resorts in Playa featuring properties with 800+ rooms, whereas the hotels in Tulum’s hotel zone are boutique "eco-lodges" with a lower room density.

I wasn't able to get the average daily rate (ADR) for hotels in Tulum vs. hotels in Playa. Personally, I think that the median ADR of hotels is a lot higher in Tulum than in Playa, what do you think?


PDC ADR Airbnb: 81 USD 


Tulum ADR Airbnb: 125 USD 


That's almost 65% more in Tulum. 


Median Airbnb occupancy in PDC: 58%. 


Median Airbnb occupancy in Tulum: 67%. 


Median Airbnb revenue PDC: $1,695 USD. 


Median Airbnb revenue Tulum: $889 USD. 


That's $806 USD more median revenue in Tulum. More than half.

DEMAND:

Demand in Playa: Playa Del Carmen receives some 1 million tourists a year. That amounts to about 2,740 people arriving each day.

Demand in Tulum: Tulum has become one of the main destinations on the Riviera Maya, receiving almost two million tourists a year (Kayak). That amounts to roughly 5,479 people arriving every day, meaning the approximate tourism demand is double for Tulum than for PDC, with a lower supply of rooms and Airbnb.

Upcoming Real-Estate Projects:

Without an MLS it's very hard to get this number right; we have an approximate figure, so if you'd like more info send me a DM and we can share it with you. According to our internal MLS, Tulum has close to double the presale projects that Playa currently has, and a significant number of units coming to the market in the next few years.

Suggestion: Buy something unique (do not overpay for a commodity, but pay a slight premium to get something special that will make you stand out from all the others once supply starts getting closer to demand.

FLIGHT INFORMATION: 
 “During the period from January to August 2021, Cancun Airport received 3.8 million foreign visitors. This was almost 4 times more than Los Cabos airport in Baja California Sur (BCS), which registered 1.07 million, and almost 3 times more than Mexico City International Airport, which received 1.4 million".
"In absolute terms, Quintana Roo receives 46.5% of all foreign visitors to Mexico, making it the country’s number one generator of tourism revenue".


Cancun airport had its second-busiest day on record on Saturday 18th of December 2021 in terms of the number of incoming and outgoing flights: a total of 648 flights touched down at or departed from Cancun airport, just 11 fewer than the all-time high of 659 flights on March 31, 2018.


Cancun’s record was in 2018, when the airport handled 25.2 million passengers.


As a new article with the top post-pandemic travel trends states: "While Dubai remains at the top of the list, the most notable rises include Miami, from 18th to 5th, and new on the list, Cancun (Mexico) at 2nd with 4% of the air ticket share." Cancun Airport wasn't even on the list and it’s now in second place just after Dubai. The two highest risers, Cancun and Miami, are both major leisure destinations popular with US holidaymakers.

SOCIAL MEDIA:

#Playadelcarmen has 4,300,000 Instagram posts. 


#Tulum has 7,600,000 Instagram posts. 


The younger crowds are making a lot more noise on Instagram about Tulum than about PDC.

Conclusion: My conclusion is speculative and since I don’t have a crystal ball I wouldn’t venture to post this online, and also I don’t want to help or affect one particular city over the other, since as I mentioned I honestly like both destinations. Each has its pros and cons depending on your specific goals, but if anyone is interested in knowing my point of view and what I think might happen in the medium and long term I’m happy to share it in private.

P.S:I am not an expert in statistical analysis, I hope this helps here are the sources of information: 

https://www.lonelyplanet.com/articles/tulum-mexico-digital-nomads

https://everythingplayadelcarmen.com/population-of-playa-del-carmen/

https://www.airdna.co/

https://www.lajornadamaya.mx/quintana-roo/177934/tulum-encabeza-preferencias-en-zonas-arqueologicas

https://realestatemarket.com.mx/mercado-inmobiliario/32231-vision-general-de-tulum

http://sedetursys.qroo.gob.mx/ocupacion/ocupacion2018.php

https://ftnnews.com/tours/42946-forwardkeys-top-travel-trends-of-2021

https://www.estadisticas.inah.gob.mx/

http://sedetursys.qroo.gob.mx/ocupacion/

https://www.eleconomista.com.mx/estados/Quintana-Roo-registra-la-mayor-tasa-anual-de-crecimiento-poblacional-de-todo-el-pais-Censo-2020-20210127-0108.html

https://londondailypost.com/top-travel-destinations-to-visit-in-2020/

http://sedeturqroo.gob.mx/ARCHIVOS/COMO_VAMOS_ENERO_NOVIEMBRE_2019.pdf

http://sedeturqroo.gob.mx/ARCHIVOS/Como-Vamos-202001-05.pdf

https://qroo.gob.mx/sedetur/como-vamos

https://mexiconewsdaily.com/news/cancun-airport-record-flight-numbers/

https://www.forbes.com.mx/brand-voice/ad-turismo-wellness-un-viaje-al-interior/

https://www.forbes.com.mx/ad-green-school-futuro-educacion-sustentable-zama-desarrollos/

https://www.greenschool.org/

http://www.datatur.sectur.gob.mx/SitePages/Visitantes%20por%20Nacionalidad.aspx

https://www.reportur.com/mexico/2021/07/17/futuro-aeropuerto-tulum-podra-recibir-4-millones-pasajeros/

https://www.elfinanciero.com.mx/empresas/2021/09/21/tren-maya-sale-re-caro-se-dispara-47-su-costo-y-suma-5-meses-de-retraso/#:~:text=Actualmente%20su%20costo%20es%20de,de%20pesos%20con%20IVA%20incluido

https://en.wikipedia.org/wiki/Municipalities_of_Quintana_Roo

https://www.travelandleisure.com/trip-ideas/i-moved-to-tulum-during-the-pandemic

I looked into buying in Mexico. The biggest disadvantage that you will face there is the near complete lack of financing options. You will probably have to make the purchase in one lump sum cash payment. If you do manage to finance it, it will be at a high interest rate with 50% down, and a 5 year term. All of that combined usually means a leveraged buy in the US will give you a better ROI/ROE.