an Diego schoolteacher Dinah Sutton was browsing online in May when she saw an advertisement for Valle Escondido. The 200-home retirement community offered a golf course, swimming pool, 24-hour security and a lush mountainside location.
There was one catch: The development was in Central America. “After I looked into it, I realized I could retire for far less than if I did in the states,” says the 56-year-old Sutton. “I thought I would have to teach 10 more years before I could retire.”
Two weeks later, she and her husband, John, made a deposit on a villa. In August, they packed their bags and headed to Boquete, Panama, to settle in paradise.
Sutton’s experience is becoming more and more common. As traditional retirement areas such as Florida, Southern California, Arizona and Texas become overcrowded and overpriced, a new breed of retiree is venturing beyond U.S. borders. In fact, when the first wave of 77 million baby boomers hits retirement in 2011, Central American countries may lure many Americans away with their impressive incentives. Panama, Honduras, Belize and Nicaragua are among the nations offering retirees tax-free relocation services and discounted health-care benefits.
Still, the steady influx of retirees is changing today’s Latin American pool industry.
Third World infrastructure has kept construction and service costs low in these nations, so many retirees can afford custom homes and elaborate pools influenced by U.S. designs. This emerging trend is something stateside builders may want to consider before it significantly impacts their bottom lines.
South-of-the-border style
Some Latin American pool companies estimate that as many as 90 percent of U.S. citizens living abroad want pools installed in their yards. And Americans have more than five times the buying power of their Spanish-speaking neighbors. For example, retirees pocketed a median income of $33,802 per year in 2002, as opposed to an average 2003 per capita income of $6,300 in Panama, according to the CIA World Factbook.
Low costs make pools in these lands more affordable than their U.S. counterparts. An average free-form pool with a simple spill-over effect that might cost $40,000 in the states is available for roughly $20,000 in Central America. “The Americans we have here lately are at a higher cultural level,” says Juan Roca, president of Aquart, a pool design company in Guardia, Costa Rica.
“They are rich, cultured people who have traveled more around the world, have better taste and create a new style of living,” Roca adds.
As a result, he has changed his company to focus on high-end pool design. Roca eliminated his service and retail operations, and updated the firm’s image. “My typical pool used to be $40,000,” he says. “Now I’m doing pools that are going from $100,000 and higher because the people appreciate it.”
This has been a boon for the high-end pool market in Latin America. Most custom pools in Central America feature infinity edges, soft curves, lap lanes and intricate Venetian tile work.
Nevertheless, there are challenges to building a pool in Latin America. “We have a lot of mountains, and most of these properties are on hillsides,” says Gabriele Salazar, project manager of Acuarium Piscinas y Spas in San Jose, Costa Rica. “So there are difficult soil conditions, where we have to build large retaining walls and foundations.” Approximately 40 percent of the 160 pools Acuarium builds each year are for Americans.
Unlike the U.S. market, where retirees prefer hot-water therapy, pool/spa combinations are not as popular in Central America. “The pools we build are usually in houses that have views,” says Roca, whose clients are nearly all American.
“We have a lot of beach entrances because families love them, but we don’t install many [spas] because the weather is always so warm.
“Instead, we do a lot of in-pool seats, where there is hydrotherapy in a corner inside the pool or in a loveseat,” Roca adds.
Due to the increased demand, more Latin American pool companies are turning to U.S. trade groups for guidance on standards and proper building techniques. In 2004, the National Spa & Pool Institute membership roster boasted 65 companies in Mexico and Central and South America, excluding the Bahamas and Caribbean.
Fact or fiction?
So how common is the Latin American retirement trend? Is it something builders in the states should worry about? The extent of the exodus is unclear.
In 2002, the number of adults who had their Social Security benefits sent abroad was 242,128, up 10 percent from 1999. But the number of actual retirees not living in the United States may be much higher because many people don’t keep mailing addresses or aren’t entitled to receive such benefits, according to the Association of Americans Resident Overseas. The organization estimates 4.1 million Americans are living abroad — a large number of whom are retirees — and Mexico is their favorite destination.
In addition, a variety of retirement communities, such as the one that drew Sutton and her husband to Panama, are starting to appear. They advertise heavily online and in international travel magazines. Thanks to those efforts, about 30 percent of all U.S. citizens in Central America have arrived in the past two years, according to developers.
“We’re three years into the development and almost completely sold out,” says Sam Taliaferro, who built the Valle Escondido community in Panama. “Early retirees come here not just for retirement, but looking for other opportunities — investments in small hotels, restaurants and to generally feed the boom taking place in this part of Central America.”
Most U.S. pool builders, however, remain unfazed about the potential impact. “If a large number did retire to Central or South America, it might affect U.S. business, but I don’t expect it to,” says Travis Bain, chairman of Riverbend Sandler Pools in Plano, Texas, a Pool & Spa News Top Builder.
“The percentage of baby boomers who would retire outside the United States would be so low, I wouldn’t expect it to hurt the industry,” he adds.
Even Latin American pool companies question the possibility of a mass exodus of retirees. “Normally, most people will have a second home here and not retire,” says Alejandro Medina, owner of Albercas Paraiso (Paradise Pools & Spas) in Cabo San Lucas, Mexico.
“The ones who do retire here buy small, shallow pools with lots of tile,” Medina says. “But the ones who want to save money don’t normally buy pools here … or in the United States.”
