Why Mexico Has Become More Expensive for Travelers: Understanding the Impact on Tourists and the Tourism Industry
Are you planning a trip to Mexico and need to budget for it? Here, you'll find sample prices that clearly show the actual prices and the overall cost of living in Mexico.
Are you planning a trip to Mexico? Brace yourself for higher-than-usual expenses! Traveling to Mexico has become more expensive, and even the most affordable destinations now cost more. Whether it's the sun-soaked shores of Cancún, the historical allure of Chichen Itza’s pyramids, or the vibrant tapestry of Mexico City, exploration costs are rising. The question that looms large is, "Why is Mexico suddenly so expensive?" This article explores the reasons behind these expensive travel rates and their impact on tourists and the tourism industry. We will also provide you with a 2023 budget tailored to your Mexico travel plans at the end of the article.
Travelers flocking to Mexico in the past few months may have picked up on something new: Things aren't as cheap as they used to be. It's not just in your imagination – the Mexican peso has strengthened significantly this year, making travel to Mexico more expensive than it has been in a long time. This increase in cost affects not only vacation rentals and tours but also daily expenses such as groceries and coffee-to-go. The cost of living has risen in tourist areas, such as Cancún, Puerto Vallarta, and Mexico City, and across the country.
Pre and Post-Pandemic Mexico Tourism in Numbers
Mexico was the 7th most visited country in the world in 2019 and No. 1 in Latin America.
Mexico is the 6th most visited country by digital nomads on the Nomad List.
In 2019, the last year before the pandemic, around 88 million travelers visited Mexico.
During the pandemic, while many countries closed their borders, Mexico kept loose travel restrictions, allowing tourism to continue on a smaller scale. This was pivotal for Mexico, which has always had gorgeous destinations, fantastic accommodations and attractions, and an excellent, welcoming attitude.
According to the National Statistics Center, INEGI, between January and November 2022, 58 million international visitors entered the country. While the total number of international tourists may have yet to reach pre-pandemic numbers, the inflow of tourist money did surpass pre-pandemic numbers: revenue for the period was US $23.4 billion, an increase of US $3.3 billion from before the pandemic.
The head of Tourism Research has stated that this increase in tourism income highlights the importance of the air sector, which has performed well over the past year. In March 2022, Mexico City's newest Felipe Ángeles International Airport (NLU) was opened. Demand for travel to Mexico continues to increase, but traveling to Mexico has become more expensive for travelers.
Strong Mexican peso
According to the Financial Times, the Mexican peso is experiencing its most robust streak in over five years. This surge in strength is due to various reasons, including increased demand for travel to Mexico. The peso is one of the best-performing currencies of 2023, and its value is currently skyrocketing against the American dollar. In the past few years, the Mexican currency has typically hovered around 20 pesos per dollar, but nowadays, $1 is valued at 16.83 Mexican pesos. Although that figure may seem insignificant, it can make a big difference in spending money.
Mexico's currency is benefiting from a confluence of domestic and international factors. The country shares a 2,000-mile border with the U.S. and is poised to be a prime beneficiary of companies focusing on their supply chains near critical markets.
For example, BMW is investing millions to make its San Luis Potosí plant more efficient and accelerate the production of groundbreaking electric vehicles. Meanwhile, Tesla plans to build a factory in the country, which will be larger than previously announced, with total investment amounting to 10 billion US dollars.
Foreign investment in Mexico has also hit an all-time high, reaching the highest level since 2015. According to Hotel Investment Today, Mexico leads Latin America's hotel development pipeline with 203 projects totaling 33,475 rooms. This includes new construction, renovations, and brand conversions.
As the currency displays newfound strength, it presents opportunities and challenges for Mexico's economy, impacting trade, tourism, and overall financial stability.
Shift to Luxury Development
The peso has not been this strong against the dollar since December 2015. For travelers planning to visit Mexico for their next vacation, Mexico's top tourist destinations are now noticeably more expensive.
Regarding price, many Mexican destinations are now on par with the most popular vacation destinations in the United States or Europe. As more and more destinations in Mexico invest in luxury hotel and resort development, prices will continue to increase, particularly for hotels and resorts. This shift towards luxury tourism is aimed at stimulating the economy post-pandemic.
Furthermore, the number of people choosing Mexico as their vacation destination has only grown since the pandemic. The average price per night for a luxury hotel stay in Mexico is 3,700 pesos, equivalent to $219 per night due to the strong peso. Last year, the same visit would have cost $185 per night.
Breaking Down the 2023 Vacation Budget
Are you planning a trip to Mexico and need to budget for it? Here, you'll find sample prices that clearly show the actual prices and the overall cost of living in Mexico.
Plan to spend around M$ 2,000 ($118) per day on your vacation in Mexico, which is the average daily price based on the expenses of other visitors.
Accommodation: 1700 MXN/night/2 people, 4-star hotel
Meals: 500 MXN/person/day, mostly budget restaurants with a good restaurant every four days
Transportation: 250 MXN/person/day, public transport, and taxi/Uber
Activities and tours: 400 MXN/person/day, limited activities
So, a one-week trip to Mexico for two people costs an average of M$28,000 ($1,662), while a two-week trip costs M$56,000 ($3,282) in Mexico. If you're traveling with family or friends, the cost per person often goes down because hotel rooms can be shared, and you can rent a car and save on transportation. If you travel slower over a more extended period, your daily budget will also decrease. Two people traveling together for one month in Mexico can often have a lower daily budget per person than one person traveling alone for one week.
If you want to visit some top tourist attractions, consider paying for them separately. Here is a list with average prices:
Uxmal (ancient Mayan city): 400 MXN/person (without a guide)
San Ignacio Lagoon (whale watching): 1000 MXN/person
Cozumel (snorkeling): 1000 MXN/person
Chichen Itza (Pyramid, one of the seven wonders of the world): Entrance 900 MXN/person (with a guide)
Xcaret (Adventure Park): Entrance 2300 MXN/person
There are many other tours and activities. The list above only includes the most popular ones. As you can see, the average price per day tour is 1000 MXN ($59). This includes transportation, a guide, entrance, small meals/snacks, and drinks.
Mexico can be expensive, mainly if you stick to the resorts and package tourism areas. However, a little detour from the usual path can lead to a more adventurous journey and some savings in your pocket. Stay at locally owned hotels instead of large resorts, and your money will go much farther and stay within the local economy.
Similarly, tourist-targeted restaurants come with inflated prices, so stick to where the locals eat and save a lot of money. Also, try picking up some food in the markets. The food is often fresh and far cheaper than the options available in sit-down restaurants.
Remember to negotiate prices, particularly with taxis. Drivers often refuse to use their meters, so it's better to agree on a price before getting in the vehicle.
If you want to experience local culture and save money, learn some Spanish, as fewer people speak English outside the tourist resorts.
So, while Mexico may not be the "cheap" destination it once was, paying for quality and supporting the hardworking people and businesses that help make Mexico a top travel destination is wise.
Food ingredients aren’t pumped full of preservatives and other chemicals so you can buy good, healthy food at affordable prices. For instance in the little hippie surfer town of Sayulita where locals and expats integrate nicely, a pair of pork tacos for lunch costs $3 USD.
Thank you for this informative article, Anna!
It's great to have a better understanding of the changing costs in Mexico for travelers. With the recent economic shifts and fluctuations in exchange rates, it's becoming increasingly important to plan our budgets carefully for a trip to Mexico !!