How Los Cabos Grew By 1 Million Visitors While Demanding the Highest ADRs in Mexico

In 2023, Los Cabos welcomed a record 3.86 million travelers — 1 million more than it saw in 2019 — while enjoying the highest average daily rates (ADR) in all of Mexico (more than $500 per night). 

And according to Rodrigo Esponda, managing director of the Los Cabos Tourism Board, 20% of travelers visit four or more times a year, and 30% of guests are booked through a travel advisor. 

"The best clients who come to Los Cabos come through a travel advisor, because advisors know what to do,” he said. “And the ROI is super high from advisors.”

According to Esponda, this success is largely thanks to Los Cabos’ private trust fund for tourism promotion, FIPROTUR, which is celebrating five years this year.

Los Cabos has two different, but complementary, ways to fund its tourism pursuits. One is through a government grant from the nationwide tourism tax, which allowed for the creation of the Los Cabos Tourism Board some 25 years ago. But the other way — which is unique to the destination — is FIPROTUR, which was created in 2019 following the dissolution of the Mexico Tourism Board.

Currently, the private trust comprises 81 paying partners in the destination, from hotels, event companies and restaurants, to banks and destination management companies.

"It creates a culture internally in the destination,” Esponda said. “Now, we get into different meetings.”

The trust has allowed Los Cabos to develop the destination in a multifaceted way, and it clearly has given Los Cabos a big advantage: It has allowed the destination to open and maintain an office in Los Angeles, successfully handle crises, maximize new opportunities, segment its visitors, produce commercial intelligence, promote the destination to travel advisors, market the destination and more.

Esponda also highlighted the flexibility of the funds.

"Whatever happens, we have a way to respond very quickly,” he said.

The best clients that come to Los Cabos come through a travel advisor, because advisors know what to do.

During the pandemic, for example, the trust allowed tourism employees to continue to receive their salaries. It also helped Los Cabos act fast and become the first destination to receive health certifications from Forbes Travel Guide, which contributed to the destination recovering 90% of pre-pandemic tourist arrivals by 2022.

The trust has also allowed Los Cabos to quickly take advantage of opportunities that help raise its profile, such as inclusion in the Michelin Guide 2024 which Esponda says has been motivating all the destination’s restaurants to innovate and deliver even better cuisine. (Thirteen restaurants were recognized, including Cocina de Autor Los Cabos, which received one Michelin star.)

And because paying members represent a mix of stakeholders, Los Cabos can develop and promote more than just its hotels, which is not usually the case for destinations funded by revenue from hotel taxes. In turn, this has helped lift the entirety of the destination — even areas without hotels, such as its rural and mountainous areas, which helps with the destination’s overall sustainability goals.

According to Esponda, the fund continues to grow in members and financial contributions — and there’s no doubt that the trust has fueled the marketing and financial success Los Cabos enjoys. 

What’s Next?

Los Cabos Tourism Board has several goals for 2025.

One is to focus on quality growth versus quantity, which Esponda says is possible thanks to the trust fund.

We grew 34% more in visitors since 2019, with ADR increasing almost 60%.

"Members need to get onboard and understand this concept,” he said.

While the destination has attracted more visitors than ever, it has also achieved an attractive ADR, proof that it is focusing on quality. Esponda also shared that Los Cabos is on track to reach about the same number of travelers as it did last year — which is a number it wants to sustain, rather than rapidly grow.  

“We grew 34% more in visitors since 2019, with ADR increasing almost 60%,” Esponda said. “We need to ensure we have strategic management for this growth.” 

Another aim is to focus on the most demanded segments by travelers, especially luxury travel.

"In the last two to three years, tourism has changed more than [in] the last 20,” Esponda said. “Post-pandemic, now that everything is open, we need to find innovation and find the segments where we have competitive advantage.”

Esponda pointed to the fact that Los Cabos has two different destinations in one, which is something highlighted by its latest luxury hotel opening, Four Seasons Resort and Residences Cabo San Lucas at Cabo del Sol. (Four Seasons has two properties in Los Cabos — the other being Four Seasons Los Cabos at Costa Palmas in the lesser-developed East Cape area.)

RELATED: Four Seasons Is Adding Another Los Cabos Resort. Why?

At the recent Virtuoso Travel Week conference, Esponda educated travel advisors on the “new endemic wonders of Los Cabos,” including natural destination highlights such as Cabo Pulmo National Park, where the reefs are increasing due to careful preservation.

Advisors will have to stay up to date on the new offerings, as well. Golfing clients will be excited to try the four new golf courses coming to the destination in the next two years. And then there are the hotels. More than 700 hotel rooms are expected to open over the next three years — with all properties offering branded residences — for a projected investment of $700 million into the destination (or, as Esponda says, “$1 million per hotel room”).

The last hotel in the pipeline for this year is the 70-room Tropicana Los Cabos, Tapestry Collection by Hilton, set in a historic building. Some of the upcoming hotels for next year include Soho House Los Cabos (30 rooms), St. Regis Los Cabos at Quivira (99 rooms), The Residences at St. Regis Los Cabos at Quivira (25 rooms), Park Hyatt Los at Cabo del Sol (168 rooms) and Amanvari (22 rooms). Grand Hyatt is scheduled for 2026 (300 rooms), and Siro Palmilla (120 rooms) is planned for 2027.

Thanks to the foundation set by the first five years of FIPROTUR, Los Cabos is well on its way to achieving its goal to grow revenue, while maintaining its reputation as a high-quality destination for luxury travel.