As Los Cabos continues to grow in popularity as a luxury beach resort destination, the more tourists can expect to pay for hotel accommodations.
Los Cabos Room Rate Average Tops $500
According to a recent report from the Los Cabos Hotel Association, guest resort room rates for visitors to Los Cabos during the first four months of the year officially was $509.
This was a 25 percent increase from the $400 average Los Cabos guest resort room rate recorded just as recent as two years ago. Before the pandemic, the rate was averaging in the $300s.
The was driven by strong demand for resort hotel rooms in the Los Cabos tourist corridor.
In the first four months of the year, the average room rate for this preferred tourist destination topped $600 per night.
It was much cheaper outside the tourist corridor of Los Cabos with rooms outside the preferred visitor zone averaging $369 in Cabo San Lucas and $384 in San Jose del Cabo.
Hotel occupancy in Los Cabos averaged 80 percent through the first four months of the year despite the high resort room rate.
What’s Driving The Rate Increase?
Supply and demand is causing the general resort room rate increase in Los Cabos.
As more tourists decide to visit Los Cabos for a resort beach vacation experience, hotels and resorts can charge more money to host them.
There are only a limited number of rooms available for visitors and prices start rising.
However, that’s only part of the reason why hotel room rates are on the increase in Los Cabos. The other has to do with the repositioning of Los Cabos as a luxury resort destination.
The Repositioning of Los Cabos
In the past, the focus of the Los Cabos Tourism Trust was simply to fill hotel rooms with visitors. This led to low room rates with high occupancy levels.
However, the tourism agency is now actively repositioning the town as a luxury destination for visitors. This leads to relatively lower occupancy rates in exchange for substantially higher average room rates.
This is what is being experienced in Los Cabos today.
The beach resort destination is focused on increasing the amenities for Los Cabos guests to accompany a higher room rate.
Everything from luxury spas, high-end dining and even championship golf courses and upscale adventure tours is what Los Cabos soon will be known for. The transformation is already underway in the area.
What Does This Mean For Tourists?
The good part of the story is that travelers to Los Cabos will be able to take advantage of many more activities and amenities expected in a high-end luxury resort destination.
Unfortunately, all of the great amenities will come at a cost.
Travelers to Los Cabos should expect to continue to pay more for their hotel room nights as the demand continues to outstrip the supply of rooms available for visitors.
As the popularity increases, properties will be able to continue to charge even higher room rates to accommodate visitors in luxury surroundings.
The demand will also cause increases in flights to Los Cabos as well as airlines charge more to transport guests to the beach resort destination.
There are a number of new hotel rooms projected to come online in Los Cabos by the end of the year.
While that normally means prices come down a bit, it may not exactly work in this situation.
It may actually increase prices, or at least hold them steady, as the supply starts to balance with the demand from Los Cabos travelers.
Supply of hotel rooms would actually have to be larger than the demand for those rooms for the prices to eventually decline in Los Cabos. This is not projected to occur in the near future.
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