Rodrigo Esponda: Los Cabos is Open
Mexico, including Los Cabos, is wide open for business. Tianguis 2021 has come and gone as the gathering spot for leaders of Mexico’s robust tourism industries, but remains a window into what to watch and where to go as the popular tourism zone emerges from Covid with some very strong trends. As tourism ministers and directors mixed with the latest in destination attractions across Mexico’s 31 states and 15 popular tourism regions, we found some exciting reasons to be hopeful about the year ahead, although the tourism conference’s time-frame in mid-November meant that the Omicron variant had not yet been identified.
Still, given the tough two years that has hit most tourism industries and destinations in the gut, we sat down with Rodrigo Esponda, Managing Director for the Los Cabos Tourism Board, to see why the resort location at the bottom of the Baja has had so much to offer during this age of COVID, and what the destination has done right.
In numbers, Los Cabos is open — touting a remarkable 100 percent recovery in tourism with spikes as much as 20 percent in recent months above other popular tourism spots in Mexico. In September 2021 alone, Los Cabos showed nearly 118,000 international arrivals – marking its most successful September month ever with a 40 percent increase in international arrivals compared to 2019.
While Cabos is open and its travel industry’s successes have been impressive, the region’s marketers are not sitting on their laurels. Safety protocols remain in place, especially as new virus variants show up in hot spots around the world. Still, Los Cabos has some radical approaches to this unprecedented era we navigate, bolstered by tight cooperation from tourism industry suppliers and hospitality purveyors.
How has this past year been for Los Cabos. How were you able to not just survive, but thrive?
Well, we know that we have to work together to collaborate to overcome adversities. That’s been the case in several occasions in natural disasters and other situations. So the floor was set before COVID, with team challenges that meant working in unison to implement the highest standard protocols.
When we reopened Los Cabos in June 2020, we really aimed at that time to position Los Cabos as the best option for travel in the context of COVID-19. We knew we would have to have the best environment and the safest environment for our travelers as they often rely on the destination and travel frequently to Los Cabos (20 percent of our visitors come four times or more during the year).
When word of mouth about destination started to spread last year we launched a marketing campaign called Los Cabos Rules, aimed at the United States. It entertained a double meaning throughout: like Stay at Home but make that home in Los Cabos; Wear a Mask, but that mask is a snorkel mask in the water. And for Keep Your Distance, we showed a lone paddle boarder floating peacefully in the Sea of Cortez.
And then we have been evolving the messaging, so now we launched a campaign that says: Set Yourself Apart. We did this especially for the US market, as we knew that the concern about traveling was not over, and visitors really want to separate themselves but be in a place that is unique, not crowded.
So where are things now?
Locally, we are in the last part of the Los Cabos reopening plan and 85 percent of the community 18 and older as vaccinated. We continue implementing the protocols and the number of cases has been super low. What we see going forward is that we cannot relax and that the quality needs to be maintained. We are now having bigger numbers than what we had in 2019. In October, for example, we had 30 percent growth vis-à-vis October of 2019. But we cannot take for granted that we will be having the same type of growth moving forward. So we keep innovating and at the same time being very assertive in our communications.
Are you offering new products to bring people back?
Yes, we need to keep innovating. One of the new products that we have just launched is called District 23 400. That is the zipcode of the downtown area of San Jose del Cabo.
It’s a fantastic area, all the renovated, and we created a chic district focused on the gastronomic experience. Some 30 restaurants belong to the program, all within walking distance of each other in the downtown part of the town. This is at the northern end of the tourism corridor. We have a specific section in the Visit Los Cabos ecosystem for this where we feature, the chefs, their recipes, and the special menus they offer on Tuesdays – we call it “Tasty Tuesdays.” We promote the freshness of the area organic farms and farm-to-table experiences, the fresh seafood you can have with the very talented cooks and chefs that have been moved to Los Cabos from all around Mexico in the world. And it appeals to the very select audience of travelers that come to Los Cabos.
There has been a big renaissance for downtown San Jose del Cabos. Visitors will see this district on Tuesdays. They already know about Thursdays arts markets and these are usually totally full. That’s why we did we created the Tasty Tuesday option, to have a different day of the week for people to come and walk around and experience the fun. And then we’re going to have another part of this program that will focus on street food in this area.
What are some of the audiences you seek to reach?
We have seen an evolution in the travel, especially on the high end with the evolving high-end traveler. Those are people who travel a lot and can go anywhere in the world. We have seen that there is a big evolution in the things that they are looking for in a vacation. We are also working on the factor of inclusion. We have three tracks there, one on LGBTQ, another is on accessibility, and then we have a focus on black travel, which is another big trend we are seeing in Los Cabos. And one final focus is on community engagement. Everyone wants to know what is happening with the community and how they can engage with the community. They want to visit the ranches where the people actually live and know the story behind the story. So those are the new channels in travel we’re working on.
What are some of the new experiential trends afoot?
A big trend we see is in sustainable vacations. We have, very close to Los Cabos, hiking trails with natural waterfalls and natural reserves that people can explore on their own and they won’t need a four by four vehicle to get to these places.
And we are also looking at the adventurous toys people like to play with in the waters. For instance, there’s a company that has been coming up, and they want to be environmentally friendly. And they have a lot of toys, but they are all electric. They are called Caboelectric and they use something called an eFoil that is a surfboard with an electric propeller that powers the board to move through any water. And they have paddle boards and a variety of other boards and equipment and it’s all geared for sustainability. So this is one of those only in Cabo ways to have fun in a unique way and still stay friendly to the environment.
What are some trends in hospitality gaining traction in Los Cabos?
The whole villa concept is taking off in Cabo. So that’s actually fairly unique, and helping to create a Mediterranean experience there. And we have variety, such as villas inside such luxury resorts as Rosewood, and other villa-focused developments that are owned and leased out through various companies. To stay in a villa is different from a stay in one of the resorts in Los Cabos. Maybe the guests are coming in by private plane and coming with many members of the family. For other guests, sometimes they want to simply stay in a resort so they can play golf or just relax in a wellness program.
What about airline travel to Los Cabos?
Currently, we have 45 percent more lift than we did during the same time in 2019, and from more gateways. We used to have 21 gateways from the United States with nonstop flights. Now we have 26 gateway cities in the United States and more frequencies. We went from 350 flights on a weekly basis to 500 weekly frequencies and we have been diversifying, especially the Northeastern U.S. I think the demand is there now, because the airlines follow the demand. But we cannot take this for granted. Now that visitors have experienced the destination, we need to make sure that they come back.
How are meetings managing in Los Cabos? Are they coming back?
We have seen a big, big comeback in meetings, especially involving incentive programs and small corporate meetings. And again, there are a couple of interesting dynamics that we have here that are different from other destinations. If you make a check of average daily rates on meetings in various locations, usually the bigger bulk of rooms, the lower the average daily rate. In the case of Los Cabos, the average daily rate of meaningful incentives is higher, say $465 a night, and the average daily rate for meetings is $250. But that is because the incentive programs and the corporate meetings prefer to work with premier product when they come to Los Cabos as it’s an aspirational destination and a great way to reward an employee.
But we have seen some changes, the incentive groups are now smaller, and they break up. So instead of bringing 150 people, they break up into sections of 50. Or if they are coming for a corporate retreat, they want to have a much more meaningful type of connection or reflection or experience when they come to Los Cabos.
Many conferences have been taking place with very specific protocol — everyone that comes goes through an arrival team test before getting access to the meeting. And then when these attendees go back to the United States, they need to go through another COVID test. We make it very easy because all the hotels offer this service on site through a certified facility.
What happens if a visitor tests positive for COVID-19 and must quarantined. Who pays for that?
In the beginning, it was popular for visitors to have insurance and many hotels also offered this option. More recently the incidents of a positive result have been super minimal. But we have a specific protocol for hotels and hospitality members and they need to advise the state medical authority immediately when somebody tests positive – once false positive results have been ruled out. Once confirmed positive through a PCR test, the guest must quarantine at the hotel. Medical authorities have to get in touch with the patient on the phone to assess the condition and needs, including food. The patient cannot leave the room, they need to stay there for the stated duration. But many hotels and resorts and villa companies are cooperating by offering at least a 50 percent discount if the guest does not have insurance.
However, the number of cases has been so low that many properties are promoting the amenity that guests contracting COVID can quarantine for free. They can do this because the number of positive cases are so so few that is makes a strong promotional statement.
For some visitors who may be staying with friends and relatives in a $5,000/night villa, though, the prospect of spending only $2,500 a night to quarantine may still be a little high. So, we have some business class hotels with special rates so those who need to quarantine can do so without too much financial pain. We have not had a positive case ion a very long time, but it’s something we need to protect.
Do you have any kind of a closing thoughts about Los Cabos and 2022?
We believe that 2022 is going to be a year with a lot of challenges. Los Cabos is open for business and we need to keep making sure that Los Cabos will still be considered the best and safest option for anyone looking to come. That’s the word and we need to keep working on it to make sure that it remains.
Los Cabos Tourism in Full Recovery
The Los Cabos Tourism Board is touting a remarkable 100 percent recovery of its travel and tourism activity with a 20 percent growth in tourism arrivals managed in the last quarter from July to September 2021 as compared to the same period in 2019. In September 2021 alone, Los Cabos showed nearly 118,000 international arrivals – marking its most successful September month ever with a 40 percent increase in international arrivals compared to 2019.
Los Cabos is Mexico’s leading destination in tourism recovery and logging in some 20 percentage points higher in visitation recovery numbers in September 2021 compared to Mexico’s other top tourism destinations. The strong indicators are connected to Los Cabos’ safety-focused approach to recovery that included color-coded classification systems managed by hotels, restaurants, bars, tours, and convention centers, determining safety levels and openings/closings, complemented by strongly enforced social distancing protocols – all leading to certifications by the World Travel & Tourism Council (WTTC).
As a result of its recovery, the destination has been able to recuperate all of its formal hospitality jobs, which are critical to the tourism activity of Los Cabos. The COVID-19 health and safety protocols included the adoption of the destination’s community vaccination program, resulting in near 90 percent vaccination numbers for the population aged 18+ in having received at least one dose to date.
“The COVID-19 pandemic has been challenging for travel destinations across the world and we are energized to see Los Cabos achieve a full recovery since tourism is at the heart of what we do,” said Rodrigo Esponda, Managing Director of the Los Cabos Tourism Board. “We will hold tight to the health and safety efforts that got us here. As we head into the holiday season of higher travel activity, it’s our goal to continue to offer the same safer travel environment.”
More Flights to Los Cabos
Looking ahead, there is a 45 percent increase in scheduled seats from the U.S. to the Los Cabos International Airport taking place in the next six months – November to April — vis-a-vis to the same timeframe in 2019 to 2020. Similarly, forecasted bookings for the final winter months of 2021 are estimated to boost the destination to not only reach, but surpass, pre-pandemic levels. To that end, Los Cabos is continuing to see a trend in short booking windows with reservations secured only one month out.
Currently, there are some 500 weekly direct flights to Los Cabos with direct connectivity from 24 U.S. cities in place for this winter season. Increases in scheduled seats the next six months (compared to 2019) are seen mostly in these gateway cities:
*LAX (+73.9 percent)
*PHX (+49.4 percent)
*HOU (+31.1 percent)
*DFW (+33.1 percent)
*DEN (+102.3 percent)
*SEA (+64.9 percent)
International visitors are flowing from four main source cities in the next four months:
• Los Angeles (21 percent of the market)
• Dallas/Fort Worth (11 percent of the market)
• Houston (11 percent of the market)
• Phoenix (9 percent of the market)
Newer discount airlines are getting in on the action as well. Swoop Airlines, for instance, considered an “ultra low-cost carrier,” is launching routes from Edmonton and Toronto in Canada to the Baja, twice weekly from Toronto and once a week from Edmonton, for as low as $139 CAD each way starting November 20.
Accommodations in Los Cabos
While the resort destination showed a 52 percent occupancy rate across hotels in September 2021 average daily hotel rates in September 2021 were $276 USD vs. $244 USD in September 2019, combining demand with safety and social distancing protocols in place.
Private flights to Cabo San Lucas and San Jose del Cabo skyrocketed this year — up 48 percent in March 2021 alone relative to the same month in 2019. Private vacation villa rentals have also been given their time in the sun as families and pods of friends and relatives anxious to get away during the pandemic found safe and scintillating haven in large estate homes near the beach along Baja’s Golden Corridor, where groups could party and relax along the Sea of Cortez.
As for new hotel development, here are the ones to watch:
*Villa La Valencia Beach Resort & Spa Los Cabos – December 2021
*The St. Regis Los Cabos Resort – 2023
*Hotel Park Hyatt Los Cabos – 2023
*A 2nd Four Seasons Resort and Residences Cabo San Lucas at Cabo del Sol – late 2023
*Amanvari – 2024
Los Cabos: More Things to Do
In 2021, Los Cabos travelers have been most interested in a mix of outdoor adventure, luxury and personalized experiences that are environmentally safe and give back to the local community.
Going into 2022, however, the destination expects to see a rise in conscious travel with visitors looking for sustainable and environmentally friendly experiences. This includes activities, such as farm-to-table dining, sea turtle preservation programs, conscious use and respect for Los Cabos’ 22 Blue Flag-certified beaches, and choosing eco-friendly hospitality.
Los Cabos, located at the tip of the 1,000-mile long Baja Peninsula, is one of the world’s most diverse tourism destinations encompassing a dramatic desert backdrop abutted by coastlines of the Pacific Ocean and Sea of Cortez. It adds to that a growing list of championship golf courses, rejuvenating spas, legendary sport fishing tournaments, and state of the art convention facilities.
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