Notitur Digital / March - April 2013 by Amdetur

2013 March April

Digital »Industry ARGENTINA:

A Multi-Destination Country

»Enterprise Toward a more

Competitive Mexico

The Future of

Medical

Tourism in

Mexico

Publication of:

www.amdetur.org.mx

» AMDETUR Activities in the First Two Months of 2013

» Mazatlan, Sinaloa in Movement

BOARD OF DIRECTORS CHAIRMAN Romárico D. Arroyo Marroquín Grupo Sunset EXECUTIVE Carlos Trujillo Balmaseda PRESIDENT Amdetur SecretarY Gerardo Rioseco Orihuela Fiesta Americana Vacation Club TREASURER Jaime Márquez Vargas Royal Holiday LEGAL Gerardo Freyre Fregoso DIRECTOR Vera y Carbajal COUNSELORS Juan Vela Ruiz / Grupo Velas Ricardo Montaudon Corry / RCI Juan Ignacio Rodríguez Liñero / RCI Kemil Rizk / Royal Resorts Marcos Agostini / Interval International Denis Ebrill / Sol Meliá Vacation Club Jorge Pallas Cáceres / Promotora Cancún Sunset Clubs Gustavo Ripol Bermúdez / Presidente Club de Viajes Francisco Aranda Bezaury / Club Real Resort Gibrán Chapur / Palace Resorts Jorge Herrera Rivadeneyra / Unlimited Vacation Club Director

March April

AMDETUR

enterprise

INDUSTRY

digital

Activities in the First Two Months of 2013

With renewed energy at the start of 2013, we at AMDETUR are continuing our efforts to offer the best service to our Associates through joint actions with organizations involved in this industry and events that unite the efforts of participants in our industry.

toward a more competitive mexico

Maintaining a climate of macroeconomic stability and introducing a package of pro-growth initiatives are the central tasks ahead for 2013. This will be a year that Mexico must take advantage of in order to become more competitive and prepare itself for external economic challenges.

Rosa de Jesús Lugo Dorantes

Notitur CHAIRMAN Romárico D. Arroyo Marroquín Grupo Sunset executive Carlos Trujillo Balmaseda president Amdetur publisher Aurora Martínez V. DESIGN KEMCS Diseño y Marketing www.kemcs.com TRANSLATION Elizabeth Collins Morrison elizcollins@mac.com Fotography Amdetur

2013

If you would like to receive the electronic version of Notitur in Spanish or English, you can request it at: aurora.martinez@prodigy.net.mx or download it directly : issuu.com/notitur

In this article, we would like to share with you some of the activities currently being carried out by the Association of Vacation Clubs (Asociación de Clubes Vacacionales de Sinaloa, A.C.) to promote development of the vacation ownership industry in the state.

ARGENTINA: A Multi-Destination Country

FEATURE

José Mata / www.pbase.com/ppmata Cel. (04455) 1885 8581

ADVERTISING Aurora Martínez V. aurora.martinez@prodigy.net.mx LOCAL ASSOCIATIONS Lic. Patricia de la Peña, Asociación de Clubes Vacacionales de Quintana Roo, A.C. / Lic. Alejandro Lemus Mateos, Asociación de Desarrolladores y Promotores Turísticos de Tiempo Compartido, A.C. (Puerto Vallarta) / Dr. Jorge Téllez Landín, Asociación Sudcaliforniana de Desarrolladores de Tiempo Compartido, A.C. / Ing. José Luis Centeno, Asociación de Promotores de Clubes Vacacionales del Estado de Guerrero, A.C. / Lic. Fernando de Leeuw Santiago, Asociación de Clubes Vacacionales de Cozumel, A.C. / C.P. Fernando Alaniz Cárdenas, Asociación de Clubes Vacacionales de Sinaloa, A.C. / Lic. Claudio Balderrama González, Asociación de Desarrolladores y Operadores Turísticos de Ixtapa y Zihuatanejo, A.C.

SINALOA IN MOVEMENT

When we speak of tourism and hospitality, Argentina is widely regarded as a multi-destination country that consistently exceeds all expectations, becoming this way in the perfect place to develop Vacation Ownership properties.

The Future of Medical Tourism in Mexico

To discuss the future of the Medical Tourism industry and its potential benefits to Mexico, we must first understand how globalization has influenced the health sector in various countries in recent years, and how this phenomenon has given rise to new opportunities.

Notitur Digital is a bimonthly online publication, published by the Asociación Mexicana de Desarrolladores Turísticos, A.C. (Amdetur), WTC, Montecito # 38, Piso 32, Oficinas 11 – 14, Col. Nápoles, Mexico 03810, D.F. Phone and fax (55) 5488 2028 to 31. It is a sister publication to the printed magazine Notitur, whose registry numbers are: Certificate of Valid Title no. 3856, dated April 19, 1989; Certificate of Valid Content from the Comisión Calificadora de Publicaciones y Revistas Ilustradas no. 3172, dated April 19, 1989; Reserve Certificate Number 04-2005-030817343600-102 from the Instituto Nacional del Derecho de Autor, Ministry of Public Education. Amdetur is not responsible for the advertisements or “advertorials” published in Notitur Digital. Notitur treats personal information on its subscribers accoridng to the privacy standards of the Federal Law on the Protection of Data Held by Private Parties. For more information on our privacy policy, visit our webpage at: www.amdetur.org.mx.

www.amdetur.org.mx

» AMDETUR Activities in the First Two Months of 2013

ith renewed energy at the start of 2013, we at AMDETUR are continuing our efforts to offer the best service to our Associates through joint actions with organizations involved in this industry and events that unite the efforts of participants in our industry. Among the activities we carried out in the first two months of 2013 were:

Above: Presentation of the E-Learning Course entitled “Formation of Promoters to Prevent Addiction in the Workplace.” Right: José Adán Ignacio Rubí Salazar during the presentation of the E-Learning Course on prevention of addictions in the workplace.

Above: Juan Pablo Castañón, Rodolfo Dorador and Roberto Zapata during the first 2013 work meeting of the Tourism Commission of COPARMEX.

First 2013 Work Meeting of the Tourism Commission of COPARMEX

The Mexican Employers Confederation (COPARMEX), held the first work meeting of its Tourism Commission on January 18, attended by Juan Pablo Castañón, Chairman of the Board of COPARMEX; Rodolfo Dorador, Chairman of the Tourism Commission of the Federal Chamber of Deputies; Roberto Zapata, Chairman of the Tourism Commission of COPARMEX; Carlos Trujillo, Executive President of AMDETUR and various regional representatives of COPARMEX. 2013 March / April

E-Learning Course by the STPS

On January 22, the Mexican Ministry of Labor and Social Planning (STPS), together with the Ministry of Health and the National Council Against Addiction in the Workplace, introduced an online course called “Formation of Promoters to Prevent Addiction in the Workplace.” During the event, José Adán Ignacio Rubí Salazar, Undersecretary of Workplace Inclusion for the STPS, spoke about the importance of this program in combating the negative effects on productivity that consumption of psychoactive substances can have in the workplace.

» AMDETUR Important leaders of the Mexican tourism industry during the First Extraordinary Meeting of the Board of Governors of the CPTM 2013. In the photo: Romárico Arroyo, Chairman of the Board of Directors of AMDETUR, Armando Valle, President of AMHM, Eduardo Ymay President of ANCH, Jorge Hernández President of CNT, Rodolfo López Negrete, General Director of the CPTM, Minister of Tourism, Claudia Ruiz Massieu and Pablo Azcárraga, Chairman of the Board of CNET.

First Extraordinary Meeting of the Board of Governors of CPTM in 2013

XXVI Ordinary General Meeting of AMDETUR

The Mexican Resort Development Association (AMDETUR) held its XXVI Ordinary Annual Meeting on February 7 this year, during this event, Romárico Arroyo Marroquín, Chairman of the Board Of Directors of AMDETUR, presented those attending–both in person and online–a report on activities conducted by the Association in 2012. He also reviewed a number of issues that Speaking before the leaders of the Mexican will involve the Association in 2013, including the tourist industry, the head of the Ministry of Tourism XXVII Annual Convention of AMDETUR. (SECTUR) said that during this administration it is intended to work in coordination and alignment with the CPTM and with the National Trust Fund Left: Several issues were reviewed for the continuity of AMDETUR labors in for the Development of Tourism (FONATUR). On January 25, the first Extraordinary Meeting of the Board of Governors of the Mexico Tourism Board (CPTM) was held, in which Minister of Tourism, Claudia Ruiz Massieu, designated Rodolfo López Negrete as General Director of the CPTM and Jorge Mezher Rage as Associate General Director of that organization.

2013. XXVI Ordinary General Meeting of AMDETUR. Right: Romárico Arroyo Marroquín, President of the Board of Directors, during the XXVI Ordinary General Meeting of AMDETUR.

2013 March / April

» AMDETUR

Above: Kemil Rizk, former General Director of FONATUR, Adolfo Favieres, President of Aldesa Turismo, José Yuste, panel’s moderator, John McCarthy, former General Director of FONATUR, Jesús Silva Herzog, former Finance Minister of Mexico and Romárico Arroyo Marroquín, former General Director of FONATUR and Chairman of the Board of Directors of AMDETUR, during the breakfast meeting “An X-Ray of FONATUR.” Left -Top: Romárico Arroyo Marroquín, Chairman of the Board of Directors of AMDETUR, also participated in the panel on “The Environmental Factor/the Challenge of Sustainable Development,” where he urged a modification of Mexican Official Rule NOM-059 SEMARNAT, dealing with mangrove reserves, because investors do have projects that guarantee environmental sustainability.

XI National Tourism Forum

Above: Romárico Arroyo Marroquín, Chairman of the Board of Directors of AMDETUR, during the CNET General Ordinary Annual Meeting on February 26.

Mexican President Enrique Peña Nieto opened the XI National Tourism Forum in the city of Cancún, Quintana Roo, on February 19 of this year. Attended by important figures from the tourism industry, the event dealt with issues such as the positioning of the “Mexico Brand,” airline connectivity and tourism legislation. A breakfast meeting was also held to discuss the topic “An X-Ray of FONATUR,” led by Romárico Arroyo Marroquín, Chairman of the Board of Directors of AMDETUR and other members of the Board, in a detailed analysis of the National Trust Fund for the Development of Tourism (FONATUR), based on their know-how and experience. Another key participant was Dr. Kemil Rizk, member of the National Board of Tourism Developers of AMDETUR and former General Director of FONATUR, as well as John McCarthy, former Chairman of the Board of AMDETUR and also former General Director of FONATUR.

2013 March / April

» AMDETUR General Ordinary Annual Meeting of CNET

The National Tourism Business Council (CNET) held its General Ordinary Annual Meeting on February 26, highlighting the importance that the tourism industry had for our country last year, as well as the significant efforts that CNET has made as a liaison for private enterprise in the industry.

2013 AMDETUR Annual Convention

The date and place for the XXVII Annual Convention of AMDETUR has been confirmed: June 19, 20 and 21, 2013, at the Hilton Hotel Mexico City Reforma, with the theme: “The New Era of Tourism - Capitalizing Vacation Ownership Opportunities.” The conference will address issues such as “The Mexico Brand in the Global Market,” Marketing and Branding, Emerging Markets and Social Media, and will be attended by renowned personalities from the industry and other areas, like Juliette Powell, a world-renowned specialist in trends applied to the communications media, particularly Social Media, who has produced special reports about Sir Richard Branson, the business magnate known for his Virgin brand, and famous movie director and producer Steven Spielberg. ◄

¡Don’t miss the

XXVII

Amdetur Annual Convention!

XXVI Amdetur Annual Convention 2012.

Remember that you can find more information about all these topics on our FB page.

2013 March / April

» ENTERPRISE

Toward a more Competitive

Mexico By Guillermo García-Naranjo / General Managing Partner of KPMG in Mexico

aintaining a climate of macroeconomic stability and introducing a package of progrowth initiatives are the central tasks ahead for 2013. This will be a year that Mexico must take advantage of in order to become more competitive and prepare itself for external economic challenges. Despite a number of risks that could affect the Mexican economy, the outlook for this year is positive and encouraging. Our country is in a strong position, better than it has been many times in the past, with indicators that have remained solid throughout the past three presidential administrations:

2013 March / April

Photo: © Odm

• Inflation under control • Competitive exchange rate and interest rates • Attractive returns in the securities market • Steady flow of wage remittances • International reserves at record highs

» ENTERPRISE Mexico cannot fully shield itself from crises or incidents that could lead to a new recession, but it has reserves and mechanisms that can help it to weather those moments better than countries with higher levels of debt or fewer competitive strengths. For now, the International Monetary Fund (IMF) has extended a precautionary line of credit for 73 billion dollars.

Additionally, the law on Public-Private Associations (PPAs) and continuing programs to build public works in Mexico, will help sustain the confidence of international investors. With passage of the Labor Reform, Mexico joins the worldwide trend toward evolving labor relations, and recognition of this regime will allow for healthy competition and make our work force more competitive.

Despite changes in the incumbent party, Mexico has maintained a satisfactory financial order, with the budget deficit and foreign debt remaining in line with projections. In 2013, one of the challenges is to preserve the climate of financial stability, market diversification, and the competitiveness of Mexican products. A central issue is Mexico’s marked dependence on trade with the United States, which is why the opening toward Latin America and Asia is a good strategy to follow while Europe recovers its footing.

Certainly, there are other challenges to address. In this process, the performance and collaboration of institutions and organizations of all levels and spheres of knowledge are vital to this country’s growth. It will be important for us as entrepreneurs to have the vision needed to turn these challenges into opportunities, and to make 2013 the year of competitiveness for Mexico. ◄

Other challenges include public safety and legal certainty. The efficient management of these issues can go a long way to improving the business climate, free up postponed investments, promote economic and social development in the most heavily damaged regions, and increase the competitiveness of Mexican companies.

Guillermo García-Naranjo is General Managing Partner of KPMG in Mexico. He has more than 30 years of experience in the Auditing field. For more than 20 years he has served as statutory auditor for many companies in different industries, encouraging the development of businesses and sound corporate practices. Since September 2002, he sits on the Boards of KPMG International and KPMG Americas. Guillermo is an active participant in various associations, like the Mexican College of Public Accountants, the Mexican Public Accountancy Institute and the Mexican Institute of Finance Executives. asesoria@kpmg.com.mx Visit: www.delineandoestrategias.com

kpmg mexico @kpmgmexico KpmgMX

gUILLERMOGARCÍA-NARANJO

2013 March / April

CHALLENGES

» ENTERPRISE

New Administration All signs point to a continuation of central monetary and fiscal policy lines, with inflation under control and competitive interest rates.

Foreign Investment Growth in the automotive, aeronautical and renewable energy sectors. Economic Stability Mexico has adequate reserves and balanced public finances.

International Climate Ongoing difficulty in the euro zone, in addition to fiscal and labor issues in the United States. Public Safety The new administration must guarantee public safety in order to protect the certainty of investments.

3.5%

Estimated GDP Growth. of Projected Budget Deficit.

Mexico Toward Competitiveness

2013

At KPMG, we see a positive year if macroeconomic stability can be maintained. The challenges to overcome

International Markets Adhesion to the Trans-Pacific Strategic Economic Partnership (TPP) Agreement opens Mexico to trade with new regions.

The Mexican Stock Exchange rose above

43,000 points

in December 2012.

are weakness in Europe and the fiscal debate in the US.

OPPORTUNITIES Structural Reforms With the Labor Reform passed, more progress can be made toward the Fiscal, Energy, Social Security and Educational reforms. This will invigorate the business climate, economic development, jobs creation and competitiveness.

2013 March / April

Market Diversification Trade opening and market diversification in Latin America and Asia have proven to be positive measures. Adhesion to the TPP is an option before commercial partners protectionism indications. Small Business on the Rise 84% of small and mid-sized businesses export to other markets through foreign suppliers and distributors, joint ventures and “value chains.”

Climate Change The way in which businesses deal with rising costs, shortages, and restrictions stemming from environmental factors will determine their competitiveness. Competitiveness Some of the advantages of Asian manufacturers are dwindling due to rising wages in their home countries, low product quality, and transportation costs. Many foreign suppliers and companies are opting to return to Mexico.

Infrastructure and Development Opportunities in highways, ports, telecommunications, hospitals and penitentiary centers.

Mexico will test the potential of the new Public-Private Partnerships (PPP), which have already proven their technical, financial and operating viability.

» INDUSTRY

Sinaloa in Movement

By Fernando Alaniz Cárdenas / Executive President of the Sinaloa Association of Vacation Clubs

n this article, we would like to share with you some of the activities currently being carried out by the Sinaloa Association of Vacation Clubs (Asociación de Clubes Vacacionales de Sinaloa, A.C.) to promote development of the vacation ownership industry in the state. We will also discuss important infrastructure projects that the federal government has brought to the state, which will undoubtedly increase the visibility of our industry. In Mazatlan, domestic tourism has accounted for most of the vacation ownership sales in the years 2011 and 2012. Last year, average annual occupancy was around 52%, with a weakening rate of occupancy from the US and Canadian markets, something that has in turn prompted developers that offer this product to change their marketing strategies. This is a trend that was particularly strong in the one- and two-bedroom units, the latter being the most popular in the domestic market.

2013 March / April

» INDUSTRY

52%

Average Annual Occupancy

DOWN

US and Canadian markets

The following are the highlights of this Association’s recent activities:

Timeshare Regulation

Even when the new Regulation for the Promotion, Publicity, Marketing and Sales Operations in Resorts and Properties that offer Timeshare in Mazatlán was published in the official Gazette of the State of Sinaloa in December 2011, our Association continues to work with a number of Mazatlan authorities to make this an increasingly effective tool for regulating the Vacation Ownership industry. With this, we keep our promise of remaining up-to-date and providing a prompt response to the requirements of the industry, working more effectively.

University-Enterprise Liaison Program

great interest to our affiliates, which will also have access to diploma programs for their employees.

A Better Infrastructure

The opening of the newly constructed MazatlanDurango Highway, which is part of the MazatlanMatamoros highway axis, is another element that we are confident will provide a strong boost to tourist activity and business in our destination, because the connection from the Gulf of Mexico to the Pacific is strategically crucial for moving University-Enterprise cargo between the northern region of Mexico and Liaison Program In 2013 we started working on a very ambitious southern United States. This will encourage the partnership program with the State University of flow of travelers to the port, particularly now that Sinaloa and we met in last January 24 with the the distance from Durango to Mazatlan, which Rector of that institution, Víctor Antonio Corrales, used to take around seven hours by car, will be and Vice Rector Rafael Mendoza, with the firm shortened to just two and a half hours. intention of making concrete progress during the Considered one of the most important works of the course of this year. previous presidential administration, this highway Our Association will support this program by includes the famous Baluarte bridge, the most presenting conferences and seminars in the impressive construction on the highway. This Tourism School of that university, offering students bridge is located in an area known as “the Devil’s a better opportunity to integrate into the labor Backbone,” at the border between the states of Durango and Sinaloa, and it is 1,144m long, the market and creating a job bank that will be of 2013 March / April

» INDUSTRY highest cable-stayed bridge in the world, certified by the Guinness Book of World Records, with a central span 520m long. All in all, the highway is 230 km long, and includes 63 tunnels and 115 bridges (including the Baluarte bridge) and the total cost of the work is estimated in 20 billion pesos.

Baluarte Bridge

Officials of the Ministry of Communications and Transportation (SCT) announced that they expect this highway to be fully completed and in operation by the end of June this year, meaning it will be open for the summer season, so in addition to the natural market of Durango, we can expect a substantially stronger inflow of travelers from the area of Laguna, as well as Saltillo, Monterrey, Zacatecas and even San Luis Potosí. ◄

Fernando Alaniz Cárdenas is Executive President of the Asociación de Clubes Vacacionales de Sinaloa, A.C. In his professional career, he worked in the developments Paraíso Mazatlán, Paraíso del Mar, Costa Brava and Grupo Mayan. After that he moved to the United States where he collaborated with Holiday Rentals, based in El Paso, Texas, covering the markets of Eastern Canada, the United States an Mexico. He also worked for La Concha Beach Resort; Fiesta Americana; Cerritos Resort and El Cid Resort. He was cofounder of the Mazatlan Association in 2003, which is now celebrating its first 10 years of services to the sector.

fernandoalaniz

2013 March / April

Âť INDUSTRY

Argentina... A Multi-Destination Country By Juan Jorge Schettini / President of the Argentine Chamber of Timeshare Industry

hen we speak of tourism and hospitality, Argentina is widely regarded as a multidestination country that consistently exceeds all expectations, becoming this way in the perfect place to develop Vacation Ownership properties. With its rich cultural heritage and diverse array of climes and vistas, it is a highly interesting market for investment in this industry. In this issue, the Argentine Chamber of Timeshare Industry â&#x20AC;&#x201C;founded in October 1984â&#x20AC;&#x201C; offers us an up-to-date overview of the Timeshare system in this country by Juan Jorge Schettini, currently serving his third term as President of that organization.

the benefits of this system, its functioning, and its importance for the growth of tourism in Argentina. This way, in February 28, 2008, a new National Timeshare Tourism Law was passed.

The Chamber has also been active in preparing the regulatory framework for this Law, which will be published shortly, and which provides a legal framework that incorporates all the needs of this vacation system, with guarantees to both investors and purchasers of Timeshare properties. With all these efforts, today the country has seen a revival of sales and greater interest among both domestic investors and major international hotel chains, Schettini begins by mentioning that since its which have brought a number of new timeshare founding, the institution he presides has been resort projects to the country. working intensively to make Argentine authorities aware of the need for appropriate regulation in this Schettini also notes us that, in Argentina, one of the industry, in order to provide legal security for the most important benefits of the Timeshare system profitable development of Timeshare resorts, and is not always brought out: it breaks with the usual above all, to encourage new investments that can seasonal patterns in the flow of travelers to tourist drive growth in this industry. Taking the chance on resorts. Tourist complexes or developments are the opportunity the Ministry of Tourism granted, often built in small communities whose natural and the Chamber took on the task of helping to draft cultural resources and attractions attract a heavy a new law by informing the federal authorities of flow of tourists during certain times of the year, 2013 March / April

Âť INDUSTRY and then slow to a trickle outside of peak season. But resorts that operate under the Timeshare system generate a greater number of tourists in the off-season and average seasons, which brings benefits to both the communities where they are located and the resorts themselves, guaranteeing a portfolio of active clients in seasons where tourism is not as heavy. One key feature that distinguishes Timeshare from traditional hotel operation is the annual occupancy rate, which normally ranges from 60% to 75% thanks to the sale of weeks during average and off seasons, and vacation exchanges, which give a boost to regional economies in off-season periods and directly employ operating personnel throughout the year. One key feature that distinguishes Timeshare from traditional hotel operation is the annual occupancy rate, which normally ranges from 60% to 75% thanks to the sale of weeks during average and off seasons, and vacation exchanges.

Dimensions of the Argentine Timeshare industry

There are currently 134 tourist resorts in Argentina that operate under the Timeshare system, and these welcome more than 350,000 guests a year. Annual sales growth in 2013 is expected to be 30%. Average annual occupancy of the resorts that offer Timeshare in mountain regions is 75%, while beach developments enjoy an occupancy rate of 60%. The weight of Timeshare units in the total supply of lodging is 8.1%, accounting for 7,229 units which represent around 30,900 guests. Resorts in Argentina offer their members (users/ owners) housekeeping services in the 1-, 2and 3-bedroom units, as well as recreation and service levels comparable to those of traditional hotels. Most of them offer facilities that include a clubhouse, pools, tennis and paddleball courts, fitness centers, spa areas, restaurants, and

Photos: Argentine Nation Ministry of Tourism.

2013 March / April

» INDUSTRY playroom or kids club, among other amenities. The average price of a week is US $6000 and the average maintenance fee is US $300. “The mission of this Chamber is to promote the development of Timeshare in Argentina, serving as a support and liaison for participants in our industry as well as a source of information about the business for those interested in investing in Timeshare projects. To this end, we have an opendoor policy and we work in coordination with the exchange companies Interval International and RCI, organizing Training and Update Sessions, where qualified presenters facilitate tools for improving the profitability of tourist resorts,” Schettini says. “Also, so far we have held fourteen Annual Conventions, attended by entrepreneurs and professionals involved in the tourist industry who can learn about new technology and innovations that contain the keys to the business and the future of our market.” Argentina’s natural bounties are an irresistible invitation to tour the country–beaches, rivers, snowclad peaks, rain forests and woodlands that exist in close proximity, spread out throughout the regions of Cuyo, Norte Argentino, Litoral, the Atlantic Coast and Patagonia. It has popular international ski resorts and 34 National Parks, three of which

have been declared Natural Heritage of Humanity by UNESCO: the Iguazú Falls, Talampaya Canyon, and Los Glaciares National Park, all of which make Argentina a preferred destination for local and international tourism and offer a solid guarantee of investment potential for all those interested in developing Timeshare properties. ◄ Average annual occupancy of the resorts that offer Timeshare in mountain regions is 75%, while beach developments enjoy an occupancy rate of 60%.

Juan Jorge Schettini is President of the Argentine Timeshare Industry Chamber and head of Schettini-Tomese Arquitectos, the architectural firm that created the master plan for the international ski center at Valle de Las Leñas, among many other works in the country. He is currently President of Invercom, S.A., a real estate development company, and Director of Maxisol, S.A., a vacation club with complexes in Argentina at Valle de Las Leñas-Mendoza; Costa del Este, on the Atlantic coast; San Carlos de Bariloche-Río Negro; and Punta del Este in Uruguay.

JUAN jorgeSCHETTINI

2013 March / April

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Âť FEATURE

The Future of

Medical Tourism

in Mexico

By Arturo Vargas Bustamante / Professor-Researcher, Fielding School of Public Health, University of California

o discuss the future of the Medical Tourism industry and its potential benefits to Mexico, we must first understand how globalization has influenced the health sector in various countries in recent years, and how this phenomenon has given rise to new opportunities for development around the world.

Globalization and Health

Just as we can say that health is the most precious possession of most people, we can also say that the industry whose job it is to protect and preserve this important asset is substantially different from others. The rules of market competition do not always apply to suppliers of medical services, and the specific qualities of the various sectors that make up the health industry have made it one of the most protected and heavily regulated in the world. In most countries, and particularly in the more developed economies, the State has become the main supplier of health services, and even though international expansion in this industry has been more limited than in other economic

2013 March / April

» FEATURE sectors–like manufacturing or finance–for some time now globalization has been promoting an alignment and standardization of regulations and production methods, and even free economic competition across borders to segments like pharmaceuticals and medical equipment. In recent years, globalization has begun to extend into secondary areas associated with the provision of health services, for example, many insurance companies in the United States have outsourced services like reading x-rays or staffing customer service to other countries where costs are lower, like India or Pakistan. In fact, Jagish Bhagwati, an economist at Columbia University, estimates that customer service and claims outsourcing is saving American insurance companies between 70 and USD75 billion a year.

Advertise in the best

magazine

of the industry.

And reach for government agencies and private companies in the Tourism and Vacation Ownership industries of Mexico and the world.

Aurora Martínez

aurora@amdetur.org.mx t. 01 55 5488 - 2028 to 31 www.amdetur.org.mx 2013 March / April

06 04

» FEATURE greater economic benefits and competition to the industry. At the same time, however, it entails new challenges, like competition between local patients and medical tourists for attention, and the lack of international systems to resolve legal disputes over malpractice.

Medical Tourism

Following the logical evolution of health service internationalization, new market niches have sprung up around the global integration of healthcare services, particularly hospitalization and elective care. One area of the market that has been considered to grow rapidly in the coming years is what is called “Medical Tourism,” a term that refers to the cross-border flow of patients. In this field, even the growth projections can be controversial. Some analysts predict a spectacular boom, which is not necessarily grounded in reality, although from a more realistic standpoint, we can expect growing geographic mobility, the increased flow of information and reduction in transportation costs–combined with increasingly high prices for medical attention in developed countries – to provide a strong incentive for people in need of health services to search in countries outside their own.

In late 2010, a colleague at Columbia University and I wrote an article for the journal Health Policy, in which we drew comparisons between the crossborder use of health services in Europe and North America. Unlike the United States and Mexico, where more than 50% of healthcare spending is private and large portions of the population lack medical insurance, in Europe, health care is primarily a public service, and most Europeans have medical insurance, although they frequently face long waiting lists for elective surgeries and treatments. Comparing these two regions, we concluded that while in Europe the primary motivation for using health services in countries outside of one’s own is prompt access to elective services, in the United States the flow of patients toward Mexico is due more to the difference in costs and the coverage of medical insurance. This means that although the cost of medical attention is one of the most important criteria for the decision to use health services in another country, other criteria

We have also seen that, parallel to this flow of patients, there is a cross-border flow of medical investment and personnel, bringing with it

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Âť FEATURE are becoming important as well, for example: prompt access to medical attention, service quality and the type of specialization required, and familiarity with the health systems of the recipient countries of medical tourism.

Outlook

At present, most of the people involved in Medical Tourism say that the primary market niche is the flow of patients in the United States, Canada and Europe to countries in Asia, the Persian Gulf and Latin America. In Mexico, â&#x20AC;&#x153;baby boomersâ&#x20AC;? and Americans that lack medical insurance are seen as the largest potential market for hospitals in this country. But from an international perspective, Medical Tourism is probably defined by the health services offered rather than the diversity of the flow of patients. The options for receiving medical treatment abroad remain limited, and there are many health conditions that require immediate attention and would make it difficult to travel in order to be treated in a different country. Also, the cost differential can vary depending on the type of medical intervention required, and many times patients find no cost/benefit advantage to traveling abroad. In my opinion, elective treatments are among the areas of greatest opportunity for the development of Medical tourism and it is also important to bear in mind that the cost differential that motivates the flow of patients from developed countries to emerging countries, also applies between the developed countries themselves and between the emerging countries themselves. Although Mexico identifies itself as a market for Medical Tourism aimed primarily at American and Canadian patients, it is an emerging country with a sizable domestic market, and according to economic projections by many public and private organizations, it will become one of the top 10 economies in the world in coming years. It is therefore not impossible to imagine that Mexicans themselves, when their economic 2013 March / April

» FEATURE situation improves, may consider traveling to other emerging countries like Thailand, India or Costa Rica to receive cheaper healthcare services similar to those offered in their own country. Thus, hospitals in other emerging countries compete not only for the flow of patients from developed countries, but Mexicans may also be attracted by their offer and, similarly, Mexican hospitals may attract medical tourist from countries that are experiencing a rapid pace of economic growth, like Brazil or China. Of course, medical attention in Mexico is cheaper than in the United States, but what will determine a patient’s decision to come to Mexico instead of Thailand–when both countries offer similar treatments in internationally certified hospitals–is the added value that the hospitals offer. Today, the major American hospitals are specializing in certain areas. For example, the Cleveland clinic in Ohio is seeking to distinguish itself as a world leader in the treatment of cardiovascular illness. Mexico could follow a similar strategy to differentiate itself from other equally attractive countries for Medical Tourism. The most attractive opportunities will be in the development of market niches that position the different destinations as the best in specific treatments, not just for developed countries but for other emerging countries, diversifying their flow of foreign patients.

I believe Mexico could take better advantage of its proximity to the United States and Canada, because the residents of these countries are choosing distant destinations like India or South Korea to receive affordable medical treatment, when their first option should be Mexico. Particularly now that the health sector reform in the United States will make medical insurance obligatory by 2014, increasing the base of insured individuals by approximately 32 million people, out of the 45 million that currently have no insurance. Clearly, Medical Tourism can be an extraordinary tool for reducing the cost of healthcare services in many countries, through a positioning in specialized areas of medical care. ◄

Some analysts predict a spectacular boom, which is not necessarily grounded in reality. Mexico could take better advantage of its proximity to the United States and Canada, because its inhabitants are choosing distant countries like India or South Korea to receive affordable medical treatments, when their first option should be this country.

Arturo Vargas Bustamante is Professor and Researcher in the Department of Health Services of the Fielding School of Public Health at the University of California Los Angeles (UCLA). He has an undergraduate degree in Politics and Public Administration from El Colegio de México and a doctorate in Public Policy from UC- Berkeley. His interest in public health has led him to research the role of international migration and immigrant integration in affecting access to health care in host countries. ARTUROVARGAS

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