Meagan Drillinger
While most destinations in Mexico are cheering their tourism wins from 2021 into 2022, one destination in particular has quite a bit to brag about. Los Cabos has announced a 13 percent increase in domestic and international visitors during the first quarter of 2022. Ninety-eight percent of those international travelers are from the United States.
Mexico led one of the most successful tourism campaigns throughout the pandemic. While it was one of the only countries in the world that remained open to tourism, the destinations that welcomed international visitors were vigilant in their response to the pandemic, taking it upon themselves to implement stringent health and safety protocols to keep travelers and residents healthy and safe. Los Cabos had one of the most conservative health and safety protocols in the country, always with an emphasis on quality of experience for both traveler and resident, over quantity and volume of tourism numbers.
Still, the destination attracted more than 325,000 travelers in March 2022, a record visitation representing an 18 percent increase when compared to 2019. Los Cabos also reported 70 percent average hotel occupancy in Q1 of 2022, with an average hotel daily rate of $455.
Another bit of news are some new tourist taxes that the destination has implemented. Led by Baja California Sur, the Environmental Sanitation Tax calls for $1.69 daily, per room, to be collected from visitors by hotels, timeshares and lodging facilities. This will go into effect on June 1. The Embrace It Contribution went into effect this year. All international travelers visiting the state of Baja California Sur for more than 24 hours are asked to contribute $20 to support initiatives to strengthen infrastructure, social projects and the economic progress of people that live and work in Los Cabos.
I chatted with Rodrigo Esponda, managing director of the Los Cabos Tourism Board, to get his thoughts on the success of Los Cabos and, more importantly, what is in store for the destination.
Q: What are the projections for the rest of the year in terms of arrivals?
A: We closed last year with almost 2.8 million air visitors. We are aiming to get 3 million this year. However, the real goal is not so much on volume, but on the quality that we want to achieve.
I met with three directors of sales from three different [Los Cabos] hotels. The interesting thing they all shared is that this week, precisely because of Easter and March break, is that they have been having a lot of good occupancy. But they capped the occupancy in their hotels. Instead of aiming for 100 percent, because they could get that, they know to provide the level of service that the destination needs, so they capped the occupancy. They would not have it at more than 75 or 80 percent. That way, we control the personal experience and the level of service.
That's what we need to be careful of. We can increase up to 3 million visitors in total, but we need to be careful that the service and quality is maintained. That is the objective.
Q: Is the decision to cap occupancy directly related to the pandemic? Were these hotels able to see how much better service they could provide when the occupancy caps were mandated?
A: As a result of the pandemic and as a result of the conditions, we capped most of the service. We limited the nightlife, we collectively as a destination raised a bar in quality of service. We saw that travelers were responding to that. The arrivals of private planes increased by 80 percent. Even though that is a very specific niche, that niche offers the highest level of service. Now, this is part of the culture. It's a culture in the destination to provide the highest level of service. People know the lane we need to be playing in. We need to separate from the other destinations by providing the highest level of service in hospitality, quality of ingredients, beauty of place and care for the environment.
Q: What is different about the traveler to Los Cabos in 2022?
A: We just conducted a couple of interesting surveys at the end of 2021. One interesting thing we found was about wellness. Every visitor to the destination replied saying that they experienced some wellness treatments or services. We also asked what the main reason is for visiting the destination. With these two questions, we learned that wellness services doubled from 2019. It's very interesting because visitors are looking to get wellness not only in the hotels, but outside in the holistic type of sense. They want to do things in the outdoors, they want to get together with the community, they want to know more about the natural ingredients in the region, the endemic plants, the background on the heritage.
Eighteen percent of travelers that came to the destination mentioned that one of the main reasons to select Los Cabos was its wellness services. Five percent had some medical services. Combined, 23 percent of the total 2.8 million travelers to Los Cabos were engaged in the wellness services.
Another trend is that all in all, visitors are booking with a short term -- within 60 days maximum is when they close the sale. But wellness visitors plan 110 days in advance. That trend, we thought, is a big opportunity for hotels and the destination to get more advance bookings and more regular patterns to the destination.
Q: Can you expand more on the two new funding measures, the Environmental Sanitation Tax and the Embrace It Contribution? What projects will these fund?
A: Those initiatives have been on the loop for a few years. The destination has been growing very fast. It is the fastest growing destination in Mexico. People have been moving from different parts of Mexico and the world to come to Los Cabos because of job opportunities. There is a need to tackle some social needs. Imagine how many families and kids come to Los Cabos. They need to go to school. Schools are a big need. Then housing is the second need. A lot of important things need to be done in housing. The third is water. The water in the hotels goes through a desalination process. There is a project to build a new desalination plant. Another important thing that needs to be done are the roads. These needs are very well pointed out. We believe it is the right time to move forward. A lot of travelers are looking for corporate and social responsibility initiatives. The standard of living in the region is better than in other parts of Mexico thanks to tourism. If we want to build synergy between tourists and residents, this is a good opportunity for travelers to participate in.
Q: What are some of the other challenges Los Cabos still faces?
A: I think that 2022 is going to be a very successful year. However, we have many challenges we need to be aware of. For example, the next two months are looking very positive. April has been very good. May looks good. However, the summer is not yet on the books because the market is booking for the short term. We know there is going to be tough competition from other destinations, including the United States. Many other destinations are doing a lot of important and interesting things. We need to keep innovating.
Many other destinations, more long-haul destinations, [are opening up] that can attract the U.S. travelers and Canadian travelers. We need to diversify and work in other markets. The U.S. will always be the primary market. We need to find other sources of travelers. In Europe, we believe that we will have important markets. June will see the first weekly nonstop flight from Madrid.
In the U.S., we will have other opportunities in secondary markets. There are interesting things coming in terms of aviation. Spirit and Frontier have an interesting project. JetBlue is an interesting airline, as well, that is flying to the destination. We believe there are a lot of opportunities to keep developing new routes within the U.S.