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Mexico is realising its potential

Article - November 2, 2012
Fonatur is the business providing the backbone to a country looking to exploit the tourism market further as Mexico seeks to become one of the top five worldwide destinations
Enrique Carrillo Lavat, the General Director of Fonatur, talks about the general development of the company and how it is playing a significant role in igniting investment interest in Mexico. To date Fonatur has already passed its projected targets for 2012 and the time it takes to set up a company has been reduced to 21 days. Mr Carrillo has had the experience of working in both the private and public sector so his knowledge of business in the country can prove vital in stimulating further growth. Also, he comments that some of the properties that have been purchased from Fonatur return profits of more than 1000 per cent, a very attractive number for potential investors.

Do you feel the level of confidence has risen among investors now in Mexico after some rough times financially in the past?

The level of confidence in national and international investors is very high. Businessmen are investing confidently, I think due to the great job done by the administration of President Felipe Calderón Hinojosa and the Treasury in creating significant, macroeconomic stability.   
Today Mexico has significant gross domestic product growth and above all, great monetary stability and commercial relations with 44 countries. 

Mexico’s goal is to become the fifth biggest tourist destination in the world by 2018. How will Fonatur help to achieve this?

Fonatur’s main goal is to ignite future investment. Fonatur has the ability to build a big part of the infrastructure that will be needed for future growth. Mexico has infinite potential in tourism and that is precisely what must be strengthened with the development that is brought about through private initiative, but also from the federal and local government.
As long as the parts work and these big planned inclusive centres are created, it will provide the necessary infrastructure for investors to come. A clear example of this are the European groups, especially the Spanish, who have come and done big business with hotels in Mexico.

In Cancún we interviewed people from the private sector, who are very grateful for Fonatur’s management. What do you take from the experience in Cancún that will be applied to these new projects?

We take every success story that we had in previous centres and repeat them, while also taking into account previous mistakes. We have greater participation and support from cities and states so that Fonatur is not doing the job on its own. We bring in exclusive private investors and even discuss the possibility of a joint venture with them.

You can see in President Calderón’s administration that in certain strategic posts, there are a lot of people working for the public sector who came from the private sector like yourself, Rodolfo López Negrete and Gloria Guevara. What was this experience like for you coming to Fonatur from the private sector and having to address businessmen or investors?

Working with the public sector has been a great experience. It is of course different from working with the entrepreneurial one, but it also is a way of complimenting and enriching the work we do.   
The fact that we participated in the private sector before gives us a great advantage and is the reason why we can talk to investors with more ease and close deals with them in short periods of time, like we have to do in this administration. That gives us an advantage, knowing them and them knowing what we are talking about. We also know what those investors need.
Today, for example, we can also give investors borrowing facilities for their investments of up to eight years with very attractive interest rates. It is very hard for investors to find this anywhere else. Tourism in Mexico is a very noble sector and gives a lot, but most of all still has everything to give.

Could you tell us what have been the greatest moments and the grand strategy that Fonatur has followed to promote sales or project growth?

We do numerous campaigns and promotional tours in foreign countries, along with trips and meetings with investors we already know. This year we had about 170 per cent more sales than the same time in 2011 and we have already accomplished our sales goal for the whole of 2012.
This means that our marketing team is doing a great job and also that investors trust us since they are coming back. They are still very aware of what Fonatur is developing but there are some returns that are higher than 1,000 per cent for people who have bought Fonatur’s properties before.

In your experience in Fonatur, what has been the one deal or moment that was very hard but in the end was satisfying to overcome on a personal level?

The financial test we found at Fonatur has been the biggest challenge. Thanks to President Felipe Calderón and the Secretary of Treasury’s support we managed to turn the financial fortunes of the institution around. You must have already heard about the tourism sector in Mexico, but that has been the great challenge and a great satisfaction that we are still savouring. We have moved forward regardless of limitations and we have accomplished a lot. Three hotel projects were on a hiatus and nearly closed and then reactivated; now the aim is to build them and for them to be successful.
The World Bank did a business study in Mexico in 2012, highlighting that since 2006 the time it took to form a company was cut down to 21 days. Of course, registration of property in Mexico was also cut down to 17 days. These reforms also allow investors to become interested and it clears whatever gloom there may be around doing business in Mexico. This is also very satisfying.