Announcement of IFC Supports Mexican Tourist Industry One Million Twenty Thousand US Dollars for Cancun Hotel on June 10, 1974

CORPORATION TELEPHONE: EXECUTIVE 3-6360 IFC Press R,~lease No. 74/11 For use in the morning newspapers of Monday, June 10, 1974 · IFC Suunorts Mexican Tourist Industrv US$1.2 Million for Cancun Hotel The International Finance Corporation (IFC), a member of the World Bank Group, is assisting the development or· Cancun, a completely new tourist re·sort on the Yucatan Peninsula, by making an investment of US$l,240,000 in the Cancun Aristos Hotel, a 228-room first-class tourist hotel. IFC • s investment in this project consis·ts · of a loan of US$976 ,000 and a subscription of US$264,ooo equivalent. The total cost of the hotel is estimated ~ at US$4,960,000. The sponsors of the project are Consorcio Aristos, S.A., an experienced Mexican-owned hotel corporation, and FONATUR (Fondo Nacional de Fomen.to al Tu- rismo), a fund established by the Mexican Government to foster development of the tourist industry in the country. Background Tourism in Mexico has developed rapidly over the last decade. Lately, the annual average growth in tourist arrivals has been 11.5%. In 1972 alone, more than 2.5 million tourists visited Mexico, contributing US$726 million or 21 percent of the gross foreign exchange income. As a result, the Mexican Go- verrunent has placed a high priority.o~ the development of the tourist industry,. and has given special support to the Cancun development program as part of its • policy to disperse the tourism industry to less developed regions with tourism potential.  - 2 - Cancun offers all of the attractions commonly associated with Caribbean resort areas, but is unique in its proximity to the temples and other remains • of the ancient Mayan civilization. Financing Equity capital totalling US$1,760,000 equivalent will be sub_scribed as follows: $484,000 by Consorcio Aristos, S.A.; $382,000 by FONATUR; $630,000 by other local investors, and $264,000 by IFC. Loan capital cf US$3.2 million will be supplied by a local bank, Banco Minero y Mercantil S.A. ($2,224,000) and by IFC ($976,000). Economic Effects The Cancun Aristos Hotel will be the first large hotel to be completed in the 11ew resort area of Cancun.. It will be part of an integrated development' providing over 5,000 rooms by 1978. The area development plans include the cons-. truction of an international airport, roads, other public facilities, first-class hotels and condominiums. Other features include the building of houses to accom- modate the more than 25,000 people expected to be living in the area by 1976. The hotel is expected to employ some 200 workers. It will be managed by an experienced Mexica~ company, and will be one of the few large hotels with a significant local ownership. Its direct contribution to foreign exchange ear- nings is estimated at US$3.5 million annually with a further US$1 million from tourist spending, outside t~.a.e hotel. Other IFC investments in Mexico have been in st.eel and steel products, textiles, cement production, general manufacturing, .and 1uining. This will be IFC' s, seventeenth investment in Mexico, a coun.try where the Corporation's gross co1umitments now total $54.3 million. •