Why the “Trump Effect” May be Great for Real Estate and Tourism in Puerto Vallarta in 2017 by Ron Morgan Properties
A recent story in Britain’s The Independent newspaper summed it up this way; “Mr. Trump will be the first travel-industry tycoon in the White House; he has a chain of hotels. But a Trump presidency may have profound effects on the travel industry” Given that the U.S. is Mexico’s largest trading partner and American ex-pats and tourists comprise a large proportion of Puerto Vallarta’s residents and tourists, how exactly might the “Trump Effect” play out here? Will his influence make Puerto Vallarta “great” also?
Based on headlines alone, one could surmise that the residual effect could be quite rosy in the coming year.
“Donald Trump’s Win Sends Economic Optimism to Highest Level Since 2012” - Wall Street Journal, Dec 21
“U.S. Economic Confidence Highest in Nine Years” - Gallup, Dec 2016
“Trump’s Honeymoon Begins: Confidence in the Economy is Booming” - NYTimes, Dec 09, 2016
“Japan PM Shinzo Abe;I have great confidence in Trump” - BBC.com Dec 09, 2017
For starters, as we all know, travel and vacation budgets are discretionary, and many economic forecasters believe there’ll be plenty of it. Even better, it will be streaming into our town like paraders into Our Lady of Guadalupe Church during the Festival of Guadalupe. According to Mark Whitehouse of Bloomberg, in a column on Dec 19 th , “financial markets appear to be assuming that everything will be awesome”. And his assessment in based on sound financial data including interest-rate expectations, credit confidence, futures markets, and lower default insurance premiums. And combined with the promise of stimulus spending, it all adds up to great news, he believes.
That said, there are also the naysayers. While many writers have opined that Trump may have a detrimental effect on U.S. import business, solar industries, overseas manufacturing etc, any positive spin-off depends largely on his execution and policies, specifically trade, foreign, immigration, and overseas income repatriation. Nor is everyone pleased with his transition efforts thus far. Jeffrey M. Jones of Gallup reports “Americans are evenly divided in their assessment of the way Donald Trump is handling his presidential transition, with 48% approving and 48% disapproving.” No surprise here, however. These numbers more or less reflect the balanced weight of support among Democrats and Republicans.
Economic Growth + Confidence + The Trump Effect = Optimism
The smart money – not to mention smart minds - have chimed in to say that all is not doom and gloom, including The Guardian’s Kenneth Rogoff, professor of economics and public policy at Harvard University; Says he: “The (US) economy already seems to be growing at a 3% annual clip. And even steadfast opponents of Trump’s economic policies would have to admit they are staunchly pro-business” And Bloomberg’s Mark Whitehouse agrees, “pretty much everywhere you look - stocks, interest rates, credit derivatives - markets see a rosier picture for 2017 than they did in early November”
Trumpaggedon; Boycott: International Travel to the U.S. may Decline, but not to Mexico!
Simon Calder, travel correspondent at Britain’s The Independent reported that American tourist operators were nervous over prospects for 2017, suggesting there may be a boycott on all things Trump. “American travel industry alarmed at the prospect of a 'Trumpaggedon'boycott...one million fewer British visitors to the US' predicted”. Will these disgruntled travelers, with fist-fulls of dollars, put Mexico in their travel itinerary instead? Absolutely.
Not to be forgotten, there’s the “peso effect” at play as well. While its decline has hurt some inside Mexico, those outside looking in see great potential. Many argue we may see Puerto Vallarta as a target of speculators. After all, many properties and prices listed in pesos have not been adjusted upwardly in order to make up for the loss in value on international exchanges.
“And How’s the Mood Among the Locals here in PV?” you ask?
If condo projects are a marker for optimism, then one might assume that local developers and agents are seeing green too. In the greater Banderas Bay area there are approximately 43 pre- sale and completed condo projects representing thousands of units. Among them, Pier 57 and Rincon de Almas are showing positive sales and investor enthusiasm. And current tourist numbers suggest that travel to the area - both international and domestic, by bus, car, air and cruise ship - continue to meet or exceed numbers of previous years. In other words, there’s no slowing down in the forecast.
Love him or hate him, Trump appears to be winning praise among analysts for his potential to bolster domestic consumer confidence, stimulate the economy, and get America moving - including moving permanently or on a vacation to places like PV. When America inaugurates its first “travel-industry- tycoon president” into the White House on January 20, 2017, this may spur many regular, travel industry enthusiasts to find a lovely, white house of their own - right here in Puerto Vallarta.
Whether you are looking for a real estate investment in Puerto Vallarta, a second home or simply considering a vacation rental, RonMorgan Properties has the professionals on hand to help you through the process. Our team of real estate specialists at Ron MorganProperties come from very diverse backgrounds and we provide the best of all worlds.