Why Los Cabos Just Got More Expensive For American Tourists

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Last Updated 1 year ago

A Cabo vacation may be more expensive for American tourists this summer than it was at this same time last year.

The main driving force behind this increase is the strength of the Peso against the U.S. Dollar. This time last year, an American Dollar was worth about 20.50 Mexican Pesos.

For the last few months, though, the dollar has been worth around 17 pesos and change. 

This means that you’re getting 3 pesos less for every dollar that you bring to Cabo. Due to this situation, experts are warning Americans to reconsider making massive investments in Mexico.

If you were toying with the idea of booking a Los Cabos vacation, then it could be advantageous to hold off until the exchange rate becomes more favorable if your plans are flexible.

However, there are still things that travelers can do in order to minimize the damage and still pay “reasonable” prices for their Cabo vacation.  

Hotel Rates Have Gone Up Considerably In A Year

One of the things that’s undeniable is the fact that hotel rates in Cabo have gone up considerably over the last 12 months.

At this time last year, the average nightly rate at a Cabo hotel sat at around 400 dollars. Through the peak end-of-the-year season, the rate crept up to 450 dollars.

Where it remained for the start of 2023, right at the start of this summer season in Cabo the per night rate is at around 500 dollars on average.

The increase in the per-night rate is not unexpected. The destination continues to skyrocket in popularity, and with increased demand comes increased prices.

The leader of the local hotels’ association in Los Cabos has long been anticipating this increase in the average prices of hotel rooms in Cabo.  

Her justification for the increased prices had to do with the fact that Cabo was looking to lure in more “exclusive” travelers.

The increased prices may keep hotel occupancy rates lower than they were last summer. This can help hotels provide a better service for the guests that do arrive.

However, as word gets out about how amazing Los Cabos is as a summer destination, travelers should not expect this to be the norm.

Make Sure You Check Your Credit Card’s Exchange Rate Before You Go Out While In Cabo

Since the amount of cash that travelers can cross the border with is limited, there’s a good chance that they’ll end up paying with a card at some point during their vacation.

When paying tabs at Cabo restaurants, American tourists could be dealing with up to 3 different exchange rates.

Choosing the wrong one is going to make that particular tab more expensive than it needs to be. 

The first exchange rate is the one the restaurant is offering for dollars in cash. If you want to pay your tab with dollars in cash, you’re typically going to get the worst exchange rate possible.

In this case, it makes more sense to pay Pesos in cash, especially if you got a good rate when exchanging dollars for pesos.

Then travelers have to contend with credit card rates. It’s a good idea to check your credit card provider’s exchange rate every day of your Cabo vacation before you head out.

VISA, MasterCard, American Express, or whoever your credit card provider is, has its own rates, which are updated daily.

When a payment is made with an American credit card, the payer is likely to be given the option of accepting the rate that the payment processor is offering.

If they know that their credit card provider has a better rate, they can decline that conversion and stick to the one their provider is offering. 

This same issue happens at ATMs. If you want to have more pesos in cash, you can head over to the ATM and either accept the rate that the machine is offering or the one you get from your provider.

Knowing where the rate is on any given day can help travelers make decisions that will save them money on their Cabo vacation.