Puerto Peñasco Post

LAX Flights to Puerto Peñasco Suspended

I have been informed that effective immediately, the Aeromexico flights between Los Angeles International Airport (LAX) and Puerto Peñasco (PPE) have been suspended indefinitely.  My sources confirmed that the flights typically were carrying no more than five passengers per trip (out of 33 total seats available) and were sometimes cancelled because of no bookings.  This led Aeromexico to decide to suspend these flights at this time.  No word on whether they will resume in the future.

To add some background, the local developers group (ADITURPP) and Aeromexico worked together to put together and subsidize these flights to L.A.  It was determined that targeting Los Angeles for these initial commercial flights into the U.S. would open up a new market to Puerto Peñasco (Rocky Point).  Phoenix was not considered for a route because it already supplies many of the tourists to Puerto Peñasco and is within an easily driveable distance.   

Looking back on this decision, it seems to be well-intentioned, but poorly executed.  Much of the promotional efforts for the Puerto Peñasco flights in Los Angeles did not swing into full gear until well after the flights had already started.  The flights also began during the traditionally slower seasons instead of beginning in March (Rule of thumb: every Puerto Peñasco business should have its grand opening in February or March).  It has proven difficult to coax a population of people - who already have beaches and an ocean - to a relatively unknown Mexican vacation spot without a sustained advance promotional effort - particularly when for about the same price, Angelenos can fly to Cabo, a much more developed vacation destination that is more familiar to Californians.  Hopefully in the near future, as Puerto Peñasco progresses, commercial flights from locations like Los Angeles will become more viable and in demand.

In the meantime, I am hoping that Aeromexico or another carrier will recognize the potential for flights between Phoenix and Puerto Peñasco.  The continuing Aeromexico flights between Hermosillo (HMO) and Puerto Peñasco have been relatively successful because of the high volume of traffic and trade between the two cities.  Similarly, Phoenix and Puerto Peñasco are closely linked.  I think a commercial flight between the two cities would prove successful as there is a growing vacationing population in Phoenix that owns a condominium in Puerto Peñasco but would prefer not to drive or deal with potentially slow border crossings.  There is also a significant population of business travelers who I think would utilize this route (similar to the HMO-PPE route that carries many business travelers).

While the suspension of the LAX-PPE flight is a small setback for Puerto Peñasco, I think it is temporary and can be chalked up more to the town getting a year or two ahead of itself and to well-intentioned, but poorly executed planning.  In the immediate future, Puerto Peñasco will continue to cater to its bread and butter base - tourists who drive - and eventually commercial flights will be phased into the equation as the new Puerto Peñasco international airport opens.  Rocky Point is Puerto Penasco.

DHS issues final rule on WHTI

The Department of Homeland Security issued its final rule on WHTI yesterday.   It can be read in its entirety here [pdf}.  I will read through it and provide a more thorough analysis after the weekend. 

The thing that immediately jumped out at me from the press release is that they will be accepting "enhanced drivers licenses" in lieu of passports or passport cards at the U.S. border.  Arizona is working on a program to provide these enhanced drivers licenses.  The final rule will be effective June 1, 2009.  Senator Leahy (D-VT) has a mixed reaction to it.

Check back for more from me this coming week.  In the meantime, keep bringing your passports or drivers licenses and birth certificates to Puerto Peñasco (Rocky Point).  Rocky Point is Puerto Penasco.

Beach Volleyball Tournament in Puerto Peñasco (Rocky Point)

OuttaTown Productions from Phoenix puts on a beach volleyball tournament in Puerto Peñasco (Rocky Point) twice a year.  These tournaments have become quite a popular sporting and social event for vacationers, drawing nearly 80 teams of all competition levels to last year's October tournament.  The spring tournament this year is on April 19, but the registration deadline for teams is April 2nd.

The event is held at Playa Bonita Resort on Sandy Beach and OuttaTown assists teams with hotel reservations and other arrangements.  The theme for the spring tournament is "Cannonball Run."  More information about the tournament registration and event can be found here.   And for a bunch of pictures from last October's tournament in Puerto Peñasco, click here.  Rocky Point is Puerto Penasco.

Puerto Peñasco (Rocky Point) Municipal Desalination Facility Update

Puerto Peñasco (Rocky Point) sits on the Sea of Cortez, but in the middle of an extremely arid zone.  It is currently supplied with fresh water pumped in from eight wells located 30 or so miles north of the city.  The city is in the middle of a refurbishment process of the underground piping system delivering this water to the city, which will improve efficiency of the system.  But in all likelihood, these wells will not be able to continue to fully supply the city as it keeps grow larger. 

As I have written before, at least one private group in Puerto Peñasco has completed a major desalination facility to supply their projects and others have signed agreements to build them or are planning them for their developments.  This will take some of the burden off the city water systems, but is still unlikely to be enough based on the growth expectations for the city over the next 20 years.

Therefore, over the past year, the city has begun to prepare for the day when it relies on the Sea of Cortez for its water.  Numerous meetings have been held with top city officials, experts in the field of desalination and area developers to discuss the matter and make plans for a municipal desalination system.

The Mexican federal government has also been active behind the scenes working on the issue.  Mexican President Felipe Calderon has promised $250 billion pesos in infrastructure improvements in Mexico during his six year term through a National Infrastructure Fund he is forming.  And his administration is working to complete additional infrastructure improvements with various international partners, including the U.S. 

The first substantive step for Puerto Peñasco's municipal desalination facility will be a comprehensive feasibility study, commissioned through a joint venture between the Mexican federal government and the U.S. Trade and Development Agency. 

Conducting a comprehensive feasibility study is a good first step towards building a municipal desalination system for Puerto Peñasco.  It is also good to see the high level involvement of the Mexican federal government in the efforts to improve Puerto Peñasco, and their partnership with the U.S. in these efforts. It is expected that the Mexican federal and Sonoran state governments will continue to prioritize funding infrastructure improvements for Puerto Peñasco.  And hopefully we will see a municipal desalination plant built within the next several years in Puerto Peñasco. Rocky Point is Puerto Penasco.

Construction Update Map of Puerto Peñasco (Rocky Point)

I posted a construction update page recently with pictures of construction around Puerto Peñasco (Rocky Point) and received several inquires from out-of-towners for a way to identify where certain sites are.  So I put together a quick map showing most of the sites which I took pictures of.  I will update this map occasionally and will keep it at the top of the construction update page.  Rocky Point is Puerto Penasco.

Cruise Ships and Puerto Peñasco (Rocky Point)

One of my friends from Sonora Turismo sent along a few pictures from the Seatrade Cruise Shipping Convention being held in Miami this week.  A contingent of representatives from Sonora is attending due to the inauguration of the new cruise ship port at the Puerto de Guaymas - just completed in Guaymas, Sonora at the end of last year.  Guaymas is the larger town about 15 minutes from San Carlos, Mexico - a small vacation town populated predominantly by Americans and Canadians.  San Carlos is shaping up as sort of an echo market to Puerto Peñasco (Rocky Point), catering more to full-time and snowbird American and Canadian populations than to the vacation market. Guaymas/San Carlos is expected to benefit when the cruise ships start to visit due to the increased tourism.  Holland America appears to be the first to announce stops in Puerto de Guaymas later this year on two 10-day cruises originating in San Diego.

As Myaann posted over the weekend, Sonora Turismo is working on bringing a cruise ship port to Puerto Peñasco over the next several years to complement the Guaymas cruise ship port.  Puerto Peñasco is approximately 290 nautical miles from Guaymas, so is a logal extension of the route into the Sea of Cortez.   

Even more tantalizing a possibility for Puerto Peñasco is becoming an origination point for cruises leaving for trips to Mazatlan and Cabo.  This makes great sense since Puerto Peñasco is easily drivable for millions of Americans who are retiring and are looking for good vacation options.  One can imagine driving to Puerto Peñasco, staying in a hotel or resort for a couple of days and then taking off for a five or seven day cruise to Guaymas/San Carlos, Mazatlan and Cabo.

More to come I'm sure and I will keep readers updated as I find out more information about the continuing discussions surrounding this effort.

Free MySpace slideshows, photo and video editing at www.OneTrueMedia.com

Roger Clyne & the Peacemakers - Turbo Ocho Launch Party & Puerto Peñasco Recording Session

For those of you who are big Roger Clyne & the Peacemakers fans, Adam Klawonn from The Zonie Report has a few quick notes about his experience backstage Saturday night at their "Turbo Ocho Launch Party" at the Celebrity Theatre in Phoenix.  Sounds like the band preferred to keep the pre-concert partying to a minimum so they could indulge fans while onstage (and so they had a few extra minutes to memorize lyrics).  A video clip from the concert can be found here.   Looks like a good time was had by all.

RCPM's new Turbo Ocho album was recorded during a marathon nine day session in Puerto Peñasco (Rocky Point) back in January 2008, which was of course memorialized on video by the band.  I have created a separate page with the entertaining behind-the-scenes videos of their recording experience in Mexico.  The new page can be found here.

Their next Circus Mexicus concert in Puerto Peñasco is scheduled for May 17, 2008.

Cross-Border Mortgage Services Gaining Popularity for Mexican Immigrants Living in the U.S.

Leaving aside political discussions about emigration from Mexico to the U.S., the San Francisco Chronicle has an interesting story today about the rise of a relatively new phenomenon...Mexican-Americans and more recent Mexican immigrants living in the U.S. who are purchasing homes back in Mexico, planning for an eventual return to their native country or purchasing a home for relatives living in Mexico.

Su Casita (a mortgage company familiar to many in the real estate business in Puerto Peñasco) has been opening U.S. branches of their Mexico-based mortgage company catering to this group over the last several years.  They are offering fixed-rate Mexican mortgages for purchase of homes in Mexico.  Conficasa is also mentioned in the article as providing these cross-border mortgage services.

Obviously, higher wages in the U.S. relative to Mexico allow Mexican immigrants the ability to more quickly amass equity in their new Mexican home.  With prices of the new "tract homes" in Mexico starting as low as $25,000 USD, these loans can be paid off relatively quickly.

BBVA has also moved over the last several years to purchase several banks operating in the southwest U.S. - like Laredo National Bank and Compass Bank - in acquisitions meant to complement their Bancomer operations in Mexico by providing cross-border financial services catering both to the Mexican immigrant population living in the U.S. and presumably to the American vacation home buyer looking to purchase a residence in Mexico.

The full S.F. Chron article can be read here.

Blue Buddha - Puerto Peñasco Pictures

Myaann has a few pictures inside Blue Buddha, the new tapas restaurant in Puerto Peñasco (Rocky Point).  It is located in the Mission del Mar commercial plaza on Boulevard Fremont at the entrance to Las Conchas.  Pictures can be found here.

Mexico Mortgage Market News (Updated)

For those of you working in real estate in Mexico, I found a very interesting article the other day analyzing Bancomer's (BBVA) growing position in the Mexican mortgage market.  It discusses in detail various Mexican economic and financial indicators and their relation to the continuing expansion of the Mexican credit markets over the last several years.  The full article can be read here.

As I have written about several times before, the Mexican credit markets are booming and are contributing to an expanding middle class in Mexico who are taking advantage of credit cards, car loans and mortgages.  In Puerto Peñasco (Rocky Point), the issue is increasingly becoming not whether mortgages are available for Mexican citizens, but whether there is enough housing supply on the market aimed at the emerging Mexican middle class.

Update:  BBVA also announced that it successfully completed its second offering of mortgages into the secondary market in Mexico, selling $100 million (USD) worth of home loans to investors today.  Article can be read here.

Carlos Slim to Provide Health Care in Puerto Peñasco (Rocky Point)

Mexidata/Frontera NorteSur are running with the story that Carlos Slim's long rumored play in Puerto Peñasco (Rocky Point) will soon come to fruition.  The following is clipped from the article in Mexidata's Media Watch section:

In partnership with Grupo Star Medica, Slim's Ideal company intends to open new medical centers in Puerto Peñasco, Sonora, and in Los Cabos on the Baja California peninsula.

And more...

With its planned medical centers in Puerto Peñasco and Los Cabos, Grupo Star Medica plans to tap into a new market segment of US baby boomers who are buying second homes in Mexico. Reportedly, sales of vacation homes in Los Cabos and Puerto Peñasco increased 30 percent and 45 percent, respectively, during the last three years.

Slim has been poking around Puerto Peñasco on several recent trips trying to figure out the right way to get involved and it appears medical tourism is where he is set to make his mark.  An article in July of 2007 [subscription required] in the Arizona Daily Star had this interesting exchange between Slim and Governor Napolitano: 

Carlos Slim, who may now be the world's richest man, noted the sharply increased costs of health care in the United States, much of that borne by the federal government in Medicare costs. Slim, who owns Telefonos de Mexico, said that presents an opportunity for Mexico to become a place where retirees can come to get medical care at a much lower cost.

But that, said Slim, will require getting Medicare to cover medical procedures done in Mexico.

"I've read that many retirees are going to Singapore to get their health treatment because they save about 80 percent in health care costs," Slim said.

"This would help the U.S. in its financial situation."

Napolitano, however, said there are too many political obstacles to that.

Similarly, she said the federal government, which finances two thirds of the cost of the Arizona Health Care Cost Containment System, the state's insurance program for the poor, would never agree to paying for medical care out of the country.

But the governor said there are some things that might be done to promote a "health care region" between the two states.

For example, she said health care workers trained in one country could be allowed to work on both sides of the border. And Napolitano said plans already at work in Arizona to put patient health records into a computer database could help provide continuity of care when Arizonans decide to get treatment in Sonora.

As I have discussed before here, acceptance of U.S. health insurance in Mexico is still the key, but I would count on Slim (the second richest man in the world) to figure out a way to solve this problem (at least for private U.S. health insurance) if he truly intends to open up a health care center in Puerto Peñasco catering to Americans.  This could be another major breakthrough for the town as it is situated perfectly for easily-driveable medical tourism for Americans.  You can drive down, get your work done and then spend a few days recuperating in a resort on the beach away from the prying eyes of your friends.

As always, the caveat "Believe it when you see it" should be stated and no timelines are given, but this is positive news for Puerto Peñasco.

Full Mexidata article can be read here.  Full Daily Star article can be read here [subscription required]. 

Young Mexican Professionals Out on the Town

The Puerto Peñasco (Rocky Point) growth over the last several years has brought with it an influx of well-educated young Mexican professionals moving to town.  Possessing advanced degrees from colleges and universities in Mexico, the U.S. and Europe, these professionals form the backbone of the new workforce that is crucial to Puerto Peñasco's growth.  Their expertise ranges from engineering to accounting to construction management to law to tourism, real estate and beyond, and most are as proficient in English as they are in their native Spanish.

It has been a pleasure getting to know many of these young professionals and hearing more about their experiences growing up in Mexico and then ultimately moving to Puerto Peñasco.  For many of them, the move to Puerto Peñasco isn't too different than moving from a major U.S. city to Puerto Peñasco.  Many of them grew up in the major modern cities of Mexico (e.g., Guadalajara, Hermosillo, Mexico City, etc.) and have spent time living and working in other resort areas (e.g., Puerto Vallarta, Cabo, Cancun, etc.).  So moving to a still small, but developing, resort town is often a bit of a culture shock for them.  They no longer have many of the amenities that they (and we Americans) take for granted - large grocery stores, movies theaters, high end clubs and bars, name brand shops and a wide range of restaurant choices (not to mention pavement).

So it has been fun to observe the social patterns of this growing group as various new venues have opened in town that are more catered to their tastes.  Two years ago, I think they had resigned themselves to house parties and poker nights.  But with the introduction of venues that cater to a little more "cosmopolitan" crowd (such as Club Elixir, Bryan's, Capone's and now Blue Buddha), they have started to venture out on the town a bit more.  They all still crave the big beach clubs and shopping of other more developed resort towns, but appreciate that it will take a little time for Puerto Peñasco to get there (but that it is coming).  Their experiences living and working in other major resort areas will no doubt have a great effect in shaping the future growth of Puerto Peñasco - for the better I feel.

Along with expanded options for socializing are of course great social/event websites catering to the local social circuit.  A couple have sprung up in Puerto Peñasco over the last year that take the requisite club night pictures and keep everyone up to date on the latest and greatest on the social scene.  So far they are catering exclusively to the Mexican crowd (all in Spanish), but hopefully they will eventually expand to include versions in English.  Either way it is fun to click around and see some of the happenings.  Check out VivePenasco.com and Fack.us for the latest. 

Another Rocky Point Blog

I just wanted to give a quick shout out to fellow Puerto Peñasco (Rocky Point) blogger Myaann Roland, who has been blogging for the last several months about happenings in Puerto Peñasco.  She covers a lot of the social/events side of things in Puerto Peñasco that I don't have as much time to keep up on, so her blog gives a great sense of the community in town (particularly the local realtor community).  Myaann is currently a realtor for Remax and has been living in Puerto Peñasco for over two years now.

Her blog can be found here and I encourage everyone to add it to their reading list.

New Feature: Puerto Peñasco Construction Update Page (with Pictures!)

Pictures say a thousand words, so I decided to take a bit of a driving tour around Puerto Peñasco (Rocky Point) over the last couple of days to take some pictures of projects under construction or recently completed.  I have added a new page named conveniently "Construction Update Page" where I have posted pictures of the job sites and a quick note or two about each.  It can be viewed by clicking here and you can find it in the left margin of my blog. 

I must stress that I do not have inside knowledge about progress on these projects and am only reporting what I have observed.  I have, however, noted whether I observed workers on the site or not.  If developers of these projects have additional updates on their projects or want to add pictures to my update page, I'll be happy to post them.  I will try to post updated pictures occasionally to give readers of this blog an idea of how things are moving on various projects.

Hopefully this gives some of the out-of-towners who don't travel to Puerto Peñasco very often a chance to see some of the progress on projects in town.

Spring Break Season Reminder

The Spring Break season starts this coming weekend in full with Arizona State University having their break from March 9-16 and then University of Arizona having theirs the following week.  Usually, ASU and UA have their break on the same week and it creates one rather large spring break week in Puerto Peñasco (Rocky Point).  This year, the first week should be a little less crazy - but the bigger Spring Break season should extend for two weeks instead of one.  Students from various other colleges and university travel to Puerto Peñasco during these two weeks to enjoy their break, but the largest groups are always from these two schools.

Overlapping with the second big Spring Break week will be Semana Santa (Holy Week), which draws a very large group of tourists to Puerto Peñasco to enjoy more of a family holiday.

For people still looking to book vacations, the easiest way is to call one of the three largest rental companies in town, Sea Side Reservations, Oceano Rentals, or Rocky Point Reservations. 

Puerto-Penasco.com also has a great Spring Break rundown with lots of information about travel arrangements, booking rooms, ets.  It can be accessed here and I encourage everyone coming down for Spring Break to read it.

The number one thing I would stress to vacationers is that crossing the border back into the U.S. this year REQUIRES A BIRTH CERTIFICATE AND DRIVER'S LICENSE or a PASSPORT.  Read more about this here.  Not having these documents will greatly slow down your travel back into the U.S. and will significantly back up the already long border lines coming home from Spring Break.