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    Building a Portfolio in a Vacation Hot Spot: The Story of Mexico's Florence Sayulita

    From Arrival Issue 1, 2021

     

    Roger Bal fell into vacation rental management almost by accident. As a former project manager and owner of a construction company in Vancouver, British Colombia, Bal was well-versed at turning rundown rental apartments in the city into buildings that attracted higher rents and greater capital values. Thinking about the future, he decided to turn his attention to building a vacation rental property in Mexico. While visiting as a tourist, he fell in love with Sayulita—a village on Mexico’s Pacific Coast known for its beaches and a backdrop of the Sierra Madre Occidental mountains.

    Bal quickly realized that Sayulita was about to explode as a tourist hot spot. So in 2017, he bought some land and built Florence Sayulita, a 15-room boutique apartment building, with the aim of renting each unit out to guests. Based on his calculations, the ROI was going to be incredible, with occupancy rates as high as premium Canadian leisure destinations, but with a much lower real estate cost.

    As Bal predicted, six months after starting construction, Sayulita did indeed take off as a hot spot and supply of inventory increased dramatically. That was the first of the one-two punch,  the second punch being COVID-19 in early 2020.

    The last year was a time of growth and reflection for Bal as a “newby” property manager. He used this quiet time to make changes and improvements both to the property and to develop the overall business. Initially, Bal didn’t set out to manage Florence Sayulita himself. He saw himself as an owner/investor. However, that has since changed. In part because of the opportunity that technology and using outsourced tools has afforded him. Technology has essentially transformed how he is able to run the business efficiently and on a flexible model, whilst simultaneously providing great service and a desired product.

    Back in the day, Bal would have had to hire a local Mexican booking agency to discuss optiSHARE EmailBlog Images (600x400) (3).pngons and get bookings from tourists walking the streets, tour buses, etc. As a specialist in multi-unit properties, our team works to provide Bal’s business with distribution in all the places where guests are booking and 24/7, multilingual guest communication. In addition, he has used technology for everything from team communication to international banking. With his tech stack, Bal needs only one full-time employee that acts as a “boots-on-the-ground” on-site manager and uses outsourced cleaning teams.

    Bal also sees online reviews as being digitized trust mechanisms, as well as one of the founding pillars for helping him to grow his business. He is happy to use OTAs to bring him businesses. Ensuring that guests are happy is his top priority and he believes that guests really focus on the fact that his property has 4.9 out of 5 stars with 100+ reviews. The initial first two years of business brought many great reviews and Bal’s take is that even the “less positive” feedback has been instrumental because they’ve helped him learn and grow.

    He is proud of the boutique brand he is building. Online trustable reviews are the great equalizer between him–as a small business–and the bigger and better-funded players in the market.

    Looking toward the future, Bal plans to replicate the Florence Sayulita in other markets across the world over the next 10-15 years. With the help from fantastic technology partners, staying nimble, and focusing on excellent customer service, he plans to parachute what he has developed in Sayulita to other up-and-coming vacation hot spots. I have no doubt he will succeed.


     

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    Emmanuel Lavoie is the COO of Jetstream Hospitality Solutions, an innovative, all-in-one distribution and channel marketing solution uniquely designed for multi-unit properties of any size.

     

     

     

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