A recent study conducted by OTA Insight which measures hotel revenue put Los Cabos as the 9th city with the highest increase in hotel prices out of all of the major tourist destinations in the world. The study also accounts for multiple factors that are driving up prices for hotels and other amenities at different destinations.
Perhaps two of the main reasons why Los Cabos has seen such an uptick in prices have to do with the growing demand for high-end travel. Particularly from the US market. Out of all of the world’s biggest economies, the US is the one that’s sending the most tourists abroad in the post-COVID era. With high-end travel being the sector that saw the steepest growth. Over 25% more people came to Los Cabos through the main airport in San Jose del Cabo in 2022 compared to 2019. The 25% increase in the number of travelers helps justify the alleged 50.8% increase in hotel prices throughout that same time period.
Cabo Is Not The Only Popular Beach Destination With Growing Hotel Prices
Even though hotel prices have increased drastically in Los Cabos, it’s not the only destination that’s seen this type of uptick. In fact, two beach destinations that are typically very popular with American tourists have seen an even higher increase in hotel prices.
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Hotel prices in West Palm Beach, Florida have grown by 54% from 2019 through 2022. With prices in Maui, Hawaii going up a staggering 62.4%. European and Asian destinations top the list of the cities with the highest increase in hotel prices. With Santorini in the Greek isles taking the top spot after seeing an increase in prices of 84.9% over a 3-year period. Cairo in Egypt, and Istanbul, Turkey round out the top 3.
Why The Increased Hotel Prices Aren’t Stopping Travelers From Flocking To Cabo
The average nightly rate at Cabo hotels sits at around 450 dollars. This may seem like a rather steep price, and it can certainly make people question why tourists continue to flock to Cabo. The proximity to one of the largest US markets, which is southern California, is certainly one of the reasons why people keep coming to Cabo. The prices in Cabo aren’t necessarily out of line with what Los Angeles area residents can expect to pay for a local weekend getaway in a spot like Palm Springs or any of the LA area beach cities. With Cabo featuring better weather and a set of amenities that aren’t readily available north of the border.
At the same time, that 450 dollar nightly rate can’t necessarily be compared directly to what you can expect to pay at other destinations. This is because many Los Cabos resorts have moved to offering all-inclusive packages for their guests. Even at high-end hotels that won’t offer this type of service in other destinations.
While it’s not a general rule, it’s entirely possible that you’ll be expected to pay 450 dollars per night in Cabo, but that fee will include all you can eat and drink while on resort property. Travelers will likely be able to find cheaper hotels at other destinations, but when you factor in food and drinks, the tab at those other spots may work out to be more than what you could’ve expected to pay in Cabo.
Demand & Cabo’s Isolation Will Likely Keep Prices Up
If demand continues to climb, it’s almost a given that hotel prices in Los Cabos will also continue to rise. Although the rate at which they’ll rise can vary. We have to take into account that demand was steady in 2022, but t there were still COVID restrictions on the number of people that resorts could welcome throughout part of the year. That perhaps drove prices up even further than they needed to be.
There’s also a unique element to Cabo which is the fact that it’s isolated from the rest of Mexico. Goods have to come in by boat from Mazatlan or on land all the way from Tijuana on the US border. This means that food prices are typically higher in Cabo than anywhere else in Mexico. If resorts continue offering all-inclusive packages, a rise in food prices means hotel prices will likely follow. For travelers, it’s all about finding the right deal to ensure that your Cabo vacation stays within your budget. While also meeting any demands that you have as far as the quality of the stay and the amenities featured at the resort.
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