“An exotic, offbeat, beautiful and very inexpensive place to stay.”

That’s how Agora Inc. founder Bill Bonner described Tulum in 1981. Back then, it was a low-key, hippy-chic beach destination for a “new crop of flower children” who listened to the Grateful Dead on the jukebox, stayed in cabins on the beach and swam naked in the surf.

Fast-forward 38 years and Tulum is still beautiful. But the days of camping on the beach for a few dollars a night are a very distant memory…

The visitors who come here now still look like flower children. But they’ll pay $7 for a double espresso… splurge $100 or more on dinner in a fashionably rustic restaurant… and $500–1,000 a night to stay in one of those beach cabins.

It’s no longer the off-the-beaten-track paradise of the early ’80s. Tulum has gone mainstream in a big way — with a booming population.

A Chic Destination in the Making

I first visited Tulum in 2004. I expected a lot to have changed since Bill’s assessment 23 years earlier. While I didn’t spot any naked flower children when I first set foot on Tulum’s white sands, it was still a place largely undeveloped and off the radar for most people.

I had to drive along rutted dirt roads to reach the picture-perfect Caribbean beaches there. But I could see that change was coming… an unstoppable “Path of Progress” juggernaut that would supercharge real estate values.

It started in Cancún with a mega-investment plan from the Mexican government. Land values increased 1,000-fold in just 25 years.

Then the Path of Progress rolled down the coast to Playa del Carmen, transforming a sleepy fishing village into an internationalized destination, one that’s sucking in digital nomads from all over the world.

Finally, it headed for hippie-chic Tulum. I was there in 2004 to figure out the opportunity. Back then, the big investment play was to buy in and around Tulum town, ahead of the Path of Progress. Buyers who got in at that point saw land values rise as much as tenfold.

That Path of Progress is still rolling through Tulum 15 years after my first visit, and development is zeroing in on Tulum town.

In 2004, the town wasn’t much more than an outpost with a few stores and cafés. Now every time I visit, it’s changed. Development has stretched back another street. New restaurants and boutique stores have opened selling local art and handicrafts.

Tulum has very definitely arrived.

To be fair, I completely understand the appeal. Tulum has one of the finest beaches I’ve come across in my close to two decades of scouting… and I’ve seen a lot of beaches.

beach

Tulum Beach is as beautiful as ever, with mile after mile of white sand washed by the warm waters of the Caribbean…

But it’s what’s happened around the beach that’s really interesting for real estate investors…

Government-Backed Development

The 80-mile stretch of the Riviera Maya didn’t exist as a popular tourist destination 30 years ago. But today, it’s Mexico’s hottest vacation spot.

It’s a classic Path of Progress story. In the 1960s, the Mexican government realized the huge potential of the booming travel market. Cheaper flights had opened up overseas vacations to the masses. The Mexican government wanted a slice of the action — and they were very forward-thinking in their approach.

They didn’t just put out an expensive ad campaign in the hopes of drawing investors and encouraging development. They got down to basics, studying what tourists demand on vacation. They fed those parameters into a computer that selected a handful of possible locations in Mexico that fit the bill.

Cancún was one of them.

At the time, Cancún was a coconut plantation with a few caretakers, but it had loads of potential — a beautiful Caribbean setting with sun-splashed beaches. So the Mexican government rolled its sleeves up and set to work.

They built an international airport. They put in roads and water treatment plants and electricity. They lured big hotel chains with promises of tax breaks and financing to help them build.

It took a few decades, but they pulled it off. Cancún became a tourist mecca.

Then the Path of Progress spilled over from Cancún to the Riviera Maya. Moving south, it transformed the fishing village of Playa del Carmen into a cosmopolitan beach city. And it kept on moving… past Playa, toward Tulum.

Tulum’s Supercharged Transformation

Tulum is now one of the fastest-growing towns in Mexico. There’s a real buzz in the air, especially downtown. New stores, restaurants and hotels are opening every month. A series of highway upgrades means it’s quicker and easier to get to Tulum than ever before. From the international airport in Cancún, the drive is less than two hours.

Tourist numbers on the Riviera Maya are ratcheting up year on year. Cancún International Airport now has four shiny terminals — and saw 25 million visitors in 2018. Many have Tulum in their sights: A record 2 million people passed through the archeological site of Tulum last year — 80% of them foreigners.

ruins

Ruins in the Zona Arqueológica de Tulum. Photo courtesy of the Riviera Maya News.

As a destination, Tulum has come a long way…

Tulum Beach is now a foodie destination with a focus on farm-to-table, organic and local produce. It even hosted a Noma pop-up, following in the footsteps of Tokyo and Sydney. As soon as the pop-up was announced, all available dinner reservations were snapped up within two hours. Diners paid $750 a head.

Hartwood is the hipster darling, where you’ll need a reservation months in advance if you don’t want to wait in line. They serve mouthwatering lobster salad, short ribs and shrimp.

Then there is the wellness angle — yoga retreats, bikini boot camps, spa treatments, etc. Tulum is popular with well-heeled folks who want a holistic element to their vacation.

Tulum has cornered the market for being “eco-chic.” It’s the kind of place where Hollywood A-listers who fly in private jets can feel virtuous by spending a few nights off the grid on the beach.

The list of stars who have frolicked on the beach is long. Demi Moore, Cameron Diaz, Drew Barrymore, Reese Witherspoon, Sean Penn, Susan Sarandon, Jessica Lange…

The bottom line is Tulum is a tourism machine. One that taps into a higher-end market, a market that’s less price sensitive.

In just a few short months, RETA members who bought in Tulum in May are already realizing big gains.

Now you can join them.

Becoming a RETA member is the only way to get access to these kinds of deals — deals even the most well-connected locals will never see.

If you’re interested in learning more about joining my little group, click here for details.

Wishing you good real estate investing,

Ronan McMahon

Ronan McMahon

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