Los Cabos on track for record visitation in 2023

LATTE chats with Rodrigo Esponda, Managing Director, Los Cabos Tourism

Mexico’s resort destination on the southern tip of Baja California Sur, Los Cabos, is on the cusp of achieving record-breaking visitor numbers as more luxury hoteliers open and average room rates surge nearly 60% compared to two years ago.

Los Cabos offers more than 80 hotels and resorts spread along its cactus-fringed coastline, the bulk of which are high-end, says Rodrigo Esponda, Managing Director of Los Cabos Tourism. Chatting exclusively with LATTE at one of the dozens of luxury properties last week, Esponda says ‘air’ arrivals to the destination in 2022 jumped 25% year-on-year to 3.5 million. This year, visitation is pacing 11% ahead of 2022.

“This year we’ll be close to or over 4 million,” he said confidently, despite the edge of Hurricane Hilary passing through Los Cabos a few days earlier. August and September are technically ‘hurricane season’ in this part of the world, so visitor numbers are lower and the heat is intense.

Los Cabos shot back to popularity during the pandemic in 2021, with the Virtuoso luxury network cited as a key driver in popularity. More on that below.

Of last year’s total visitor number, 2.2 million were international travellers. The bulk (around 80%) of which are from the United States, another 10% from Canada, and the remainder shared across other markets, including Australia. Of the 2.2m, 100,000 visitors arrived on private jets – that’s between 9,000 and 11,000 per month – which offers some perspective as to the volume of ultra-high-net-worth visitor touching down in Los Cabos.

Zadún, a Ritz-Carlton Reserve

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Most major global luxury hotel and resort chains are present in Los Cabos. Waldorf Astoria, Four Seasons, Rosewood, Ritz-Carlton Reserve, One&Only, Nobu, Viceroy, Auberge Resorts, JW Marriott, Montage, Thompson – they’re all here. And in the next 12 months expect to see inventory grow by some 600-keys with the addition of Aman, Park Hyatt, St. Regis, a second Four Seasons property with Mexican architecture, and an even more upscale, yet downsized in-footprint version of Grand Velas, the Mexican branded luxe retreat operator. The 79-room Grand Velas Boutique will be all-suite and slated to welcome guests from November 2023.

All prime product, very different and focused on niche segments,” Esponda said.

There are around 10 luxury hotel chains not present in Los Cabos, yet, including Belmond, Cheval Blanc, Mandarin Oriental, Peninsula, Oetker Collection, Shangri-La, EDITION and Autograph Collection. Add to that any of the luxury and lifestyle brands of Accor – such as Raffles, Orient Express, Fairmont, Sofitel and Banyan Tree.

SO/ Hotels was close and a property had been announced for the outskirts of San Jose del Cabo in 2019, and slated to launch in 2021, however, that project appears to be off the radar, ever since SO/ was repositioned under the Ennismore collection of lifestyle hotels.

Lobby, Nobu Hotel Los Cabos

“The destination has been growing and fortunately, we have a lot of space to expand,” Esponda explained to LATTE.

For Los Cabos Tourism, it’s not about the size of the property, but the quality and the guests it attracts. Hotels and resorts are capped in terms of their footprint, with no new developments able to exceed six levels. Most luxury hotels also now have an attached residence component for long-stay guests.

The average daily rate is now US$550, up US$250 from 2019. Esponda said the biggest increase in rate was between 2020 and 2022, but believes the room rates appear to have tapered, for now.

“There is a big difference in terms of the segment that Los Cabos attracts versus other destinations,” he said. “80% of hotel rooms are either four-star or five-star.”

Other destinations you’ll find there are different components,” he noted, adding that the destination still caters for all markets, with the likes of Holiday Inn offering rates at around US$50 a day.

The repeat rate for Los Cabos is 40% on a yearly basis. One in five visitors returns four times or more, hence the need for residences.

Las Ventanas al Paraíso, a Rosewood Resort

While the total percentage of visitors to the destination from down under are nowhere near the realms of the USA and Canada, Esponda says Australia is a “quality market”. Arrival numbers from Australia are down about 20% from the 2019 figure – no doubt impacted also by airlift issues on the Pacific route – however, there had been a “very large increase compared to last year,” he said.

“It’s not about the quantity, it’s the quality that comes and their length of stay.”

Speaking of quality, Esponda spoke highly of the tourism bureaux partnerships with travel industry consortia, including the alliance with Virtuoso.

“It is one of the most important partnerships we have. There are 14 Virtuoso Preferred hotels in Los Cabos which is the highest concentration of member properties than any other location,” he said.

Chileno Bay Resort & Residences, Auberge Resorts Collection

There are 18,000 rooms in Los Cabos and 2,000 of those (or more than 10% of room inventory) are dedicated to Virtuoso.

“For Los Cabos, it’s not only the number of hotels and rooms, but the revenue that they generate.”

“The average daily rate is $US2,000 per night. That’s four times more than the average daily rate for the destination.”

“The most important part is the quality. The market Virtuoso has is the trendsetter. People who come through Virtuoso are the most avid travellers, are vanguard in astronomy, in wellness, in sustainability elements.”

Esponda said when Los Cabos reopened its doors to tourism in 2020, it was the Virtuoso clients who were “knocking at the door” to come back first.

“It shows that the network has a lot of power to set a trend which people will follow.”

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