For buyers considering investing in Puerto Vallarta real estate for vacation rental income, it is important to note that hotel rates in Puerto Vallarta dropped only slightly from 2009 to 2010, with some implications to consider for investors.
Data released by Hotels.com in September 2010 showed that average hotel rates in Puerto Vallarta dropped about 5{27e36b2a13b6306a43ce91cee3dcf0ef7a81196eaed348378a9101482bf2e910} in the first quarter of 2010 compared to the first quarter of 2009, from about $200 USD/room/night to about $190.
First of all, this fact shows Puerto Vallarta’s ability to adapt, adjusting to market needs, offering special packages and early payment discounts; the figures were based on actual payment amounts rather than advertised prices. In a world where consumers in the primary markets for tourism (U.S and Europe) are continually facing the reality of traveling on a tighter budgets, Puerto Vallarta’s hotel industry adapts to this, and, like the cost of living in Puerto Vallarta in general, continues to be competitive on an international level.
This factor remains a strength for Mexico real estate on the whole, providing a relatively affordable cost of living, while still providing very high levels of services, safety and infrastructure, and is important for investors, meaning that the stream of tourism and attractiveness of the location will remain in tact.
This mild drop compares to a world-wide average rise of 2{27e36b2a13b6306a43ce91cee3dcf0ef7a81196eaed348378a9101482bf2e910} in hotel room costs. Puerto Vallarta, however, dropped less than the average in Mexico, which was 7{27e36b2a13b6306a43ce91cee3dcf0ef7a81196eaed348378a9101482bf2e910}. Some areas dropped as much as 18{27e36b2a13b6306a43ce91cee3dcf0ef7a81196eaed348378a9101482bf2e910}, which is a change that is perhaps too drastic, from the point of view of vacation property investors. The drop in Puerto Vallarta was only 5{27e36b2a13b6306a43ce91cee3dcf0ef7a81196eaed348378a9101482bf2e910}, which means that rates for vacation rental properties can remain relatively steady without losing their competitive edge for small groups of vacationers looking for an affordable way to enjoy a higher level of comfort, which is the main market for vacation rentals.
Buyers considering this kind of investment often invest in large condos on or very near the beachfront. 3 or 4 bedroom condos tend to be the most successful, and visitors also prefer units within walking distance to the beach and to services such as grocery stores, restaurants, etc., helping to make their visit comfortable and easy, while still being to save on hotel prices.
Investors new to the Puerto Vallarta market should investigate MLS listings, and, most importantly, contact an experienced, qualified agent familiar with the market to find the unit with the most draw for renters, as well a competitive edge over paying for a hotel.
