Visit Los Cabos, which is funded by a 3% hotel tax on
visitors, created a complementary trust fund that will allow the region's private
sector to contribute money for promotional efforts.
Rodrigo Esponda, the tourism board's managing director, said
the immediate impetus to create the fund was the need to replace $2.5 million in
resources and contributions that had previously been provided by the federal
Mexico Tourism Board, which was dissolved earlier this year.
Although Esponda said that international arrivals have grown
4% year over year through April, the board is underfunded compared with
competitive destinations. To make his point, he compared Los Cabos' current
budget of $12 million and its 3 million annual visitors with Bermuda's $38
million promotional budget, which attracted 650,000 visitors.
Esponda also noted the region's growth in capacity, with
2,000 additional rooms being added in 2019. Since 2017, hotel inventory has
grown 31%, he said.
Los Cabos has traditionally been less dependent on federal
funding than other tourist destinations in Mexico, enjoying greater hotel tax
funding and very active involvement from the private sector. Because 100% of
the hotel tax, collected by the state of Baja California Sur, is turned over to
the board, Esponda said that hotels are incented to contribute to the private
sector trust fund because when more visitors arrive, more hotel tax is collected.
This creates, in effect, a tax "match" when a promotional campaign is
Among the activities Visit Los Cabos' funding will support
is the opening of an office in Los Angeles in August. "Forty percent of our visitors are from
California, and our biggest partners -- airlines, tour operators, wholesalers
and travel advisors -- are also based in the state," Esponda said.
Membership fees to join the private trust are based on
several variables. For hoteliers, considerations will include the number of
rooms, location, star category, group facilities and target market. The local
hotel and timeshare associations have signed on to be founding members of the
Members of the trust will also have access to a fulfillment
house which will, among other services, process travel agency commission