High Energy Costs Leading To Los Cabos Tourist Restaurant Closures

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Last Updated 1 year ago

An energy crisis has hit Los Cabos businesses and it threatens some of the restaurants loved by tourists to the beach resort destination.

What’s The Issue?

During the summer, several restaurants struggled to serve tourists through a number of regular blackouts that struck Los Cabos.

On top of the unreliable electricity, that power that was provided has increased in price by more than 20 percent recently.

For many of the tourist restaurants in Los Cabos trying to still recover from the COVID-19 pandemic, the double whammy of energy supply and price increase issues has pushed them to the edge and forced them to close.

They were operating and providing food to Los Cabos travelers with a less than 20 percent profit margin.

According to a recent article on the topic, Los Cabos suffers from some of the highest electricity costs in the nation, in addition to antiquated ways of getting the fuel to power the plants.

Instead of being carried by truck, or even pipeline, across the Gulf of California, fuel to generate energy is transported by ship. That dramatically adds to the cost of delivery.

Tourist Corridor Impacts

While tourists may not directly be impacted by the price and reliability of electricity in Los Cabos, they are impacted when restaurants are forced to close.

The hotels and resorts in Los Cabos have their own backup power generation supply for visitors staying on their properties due to the need to prepare for tropical weather conditions.

The same backup generators came in handy during the blackouts when the municipality of Los Cabos was challenged to run its desalination plants to provide clean water.

Tourists are impacted by the fact that the hotels and resort properties in Los Cabos also need to purchase fuel for their backup generators, which comes from a similar source as the fuel needed to produce electricity by the municipality of Los Cabos.

Those increased prices for fuel and transportation costs indirectly impact the prices that tourists pay for accommodations, amenities, and dining options when visiting the beach resort destination.

The Future of Electricity in Los Cabos

It seems like the reliability of the electrical system in Los Cabos has been resolved for now.

There have not been any recent reports of blackouts since the power challenges during the late spring and summer travel seasons.

However, it is about to undergo a big stress test once the community reaches the peak fall and winter holiday season in just a couple of weeks.

It was the last peak season that put pressure on the system to deliver reliable electricity to locals and tourists.

The prices, however, are here to stay and will continue to impact the expenses that hotels, resorts, restaurants, and other tourist amenities face. Those will be passed on to visitors to Los Cabos in higher room rates, prices for meals, and increased costs to enjoy amenities.

Actions Tourists Can Take

Tourists don’t have many options that will save them money from the increase in electricity costs in Los Cabos.

Most of the local providers of products and services to tourists will simply pass on the higher costs to tourists in the form of higher prices.

Some may be able to absorb some of the costs or reduce meal portions and other cost-cutting options to keep the prices stable for Los Cabos travelers.

The main way tourists can help is to support their local favorite restaurants in Los Cabos while being understanding if prices are higher or portions are smaller to accommodate the double-digit price increases in electricity.

The upcoming peak travel season for the fall and winter holidays should provide some support for restaurants struggling to make ends meet, providing great food to Los Cabos travelers in the beach resort destination.