Los Cabos, one of Mexico's smaller resort destinations, is poised for growth from nontraditional U.S. markets as a result of the promotional work of wholesalers and the Los Cabos Convention and Visitors Bureau, the opening of new resorts and expansion at its international airport.
Traditionally a playground for Californians and other West Coast travelers, Los Cabos, at the tip of the Baja Peninsula, is beginning to attract vacationers from the Midwest and the East Coast.
Travel agents from those areas were among the 120 agents who attended the recent soft opening of the 626-room Barcelo Los Cabos Palace Deluxe.
The agents were drawn from the top-producing roster of wholesaler MLT Vacations, which cut a deal for an All-Inclusive Plus program with Barcelo that offers amenities including no restrictions on a la carte dining.
For many of the agents, it was their first time in Los Cabos, and MLT was eager to show them both the new Barcelo and the destination, said Ken Pomerantz, MLT Vacations president. "This property is unique to the destination," he said.
The Minnesota-based wholesaler's airlift to Los Cabos this winter will jump to 230,000 seats, compared with 20,000 last winter. (In 2008, MLT Vacations, Northwest Airlines' in-house tour brand, became a subsidiary of Delta as a result of that airline's merger with Northwest. Also in 2008, MLT received the contract to operate Continental Airlines Vacations.)
With the airline brands and its own independent product, Worry-Free Vacations, MLT will offer more airlift and packages to Los Cabos than ever before.
The MLT Vacations event at the new Barcelo was a good sign, said Ella Messerli, general manager of the Marquis Los Cabos and vice president of marketing for the Los Cabos Convention and Visitors Bureau.
The Cabo area is finishing a difficult year as a result of the U.S. recession and the "AIG effect," which saw U.S. companies drastically cut back on meetings and incentives travel.
Los Cabos hotel occupancies slipped from their typical 70%-75% range to the high 50s, and most resorts are offering reduced rates and value-added packages to stimulate business.
Meanwhile, Los Cabos Airport completed a taxiway expansion that enables it to handle 747s and other widebody aircraft. That allows the Spain-based Barcelo chain to consider flights from Europe, which would be a first for the destination.
Despite the talk of growth, Messerli said there is not a chance that Los Cabos will ever rival Cancun or the Riviera Maya in size. With 12,000 hotel rooms, the area offers only a tenth of the room capacity as the Riviera Maya. Further, government regulations in the Los Cabos zone limit growth to low-density resorts (five stories is the limit), and there is no space to build along the Los Cabos oceanfront hotel corridor between the towns of San Jose del Cabo and Cabo San Lucas.
The only way that new hotels can be developed along the corridor is to tear down existing properties, as happened with the Hotel Twin Dolphin, which was demolished to build a new luxury, but low-density, Montage Resorts property.
"Los Cabos will never feel like Miami Beach," Messerli said. "We're all about contact with nature, low density, quiet and relaxation."
The recession has put a damper on plans to build resorts just east of San Jose del Cabo in an area called Puerto Los Cabos and farther east along the Sea of Cortez, an area known as the East Cape where there is a scattering of fishing villages.