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Cabo San Lucas wants to be a luxury destination, but high prices are hurting tourism
(From April):
http://seattletimes.nwsource.com/html/travel/134682329_cabo2...
By Beverly Beyette
Los Angeles Times
Sunday, April 27, 2003
CABO SAN LUCAS, Mexico ? Here at land's end ? where, they say, the sun shines 350 days a year ? gallons of margaritas are poured, migrating whales
spout in the Gulf of California, and bronzed and buff tourists lounge poolside at hotels that (for a price) offer every imaginable amenity, from
massages under the stars to customized minibars.
But there are clouds on this sunny horizon.
Tourism is suffering. One hears it from the merchants in town, senses it by the empty restaurant tables. Some worry that Cabo San Lucas may be driving
away tourists by offering too little for too much.
"People are trying to dress this place up like a ballroom queen and take her out dancing before she's learned to walk," says David Halliburton Jr.,
whose late father, David Sr., opened the Twin Dolphin in 1977. At the time, it was one of a handful of resorts in Cabo and along the 20-mile
oceanfront corridor between Cabo and San Jose del Cabo, together known as Los Cabos and dotted with luxury hotels. "They're just jacking their prices
up and pretending there's nothing wrong."
Before a recent trip to Los Cabos, I contacted Halliburton, who was pinch-hitting as general manager of Twin Dolphin, and asked if he would show me
around and introduce me to some longtime residents who could discuss the area's history and growing pains.
I soon learned that environmentalists, concerned about depletion of game fish in what has been dubbed "God's fish tank," recently won a battle to
restrict commercial fishing to 50 miles offshore. There is organized opposition from a group calling itself Defenders of the Bay to a proposal to
build a dock at Cabo San Lucas marina big enough so that cruise ships, which now must anchor offshore, can come into the harbor to disgorge
passengers. (More than 400,000 passengers were aboard cruise ships calling last year at Cabo.)
Los Cabos makes a point of wanting to be Mexican, not Miami Beach or Waikiki; yet it is teetering perilously close to both. Wrapped in the arms of a
$400-a-day hotel, you can easily forget that you're in Mexico ? and the desert at that.
The area's first hotel, the Palmilla, was built in 1956 on the corridor. Guests came by yacht or private plane, landing on a rudimentary airstrip.
Where today four-lane Highway 1 takes visitors from Cabo San Lucas to San Jose del Cabo, in the '60s there was only a dirt road hugging this coast;
the journey took four hours, dodging a cow or two.
The opening of the 1,000-mile transpeninsular highway from California to Cabo in 1973 brought the first wave of tourists, many in RVs. The tsunami
came after the 1977 opening of the international airport near San Jose, which gave easy access to the natural attractions ? sea lions and
whale-watching; the picture-postcard landmark El Arco, a wave-carved arch in the rocks where the Gulf of California meets the Pacific; the barren
desert beauty; and, of course, lovely beaches (although many have dangerous drop-offs and undertows).
Today there are 8,200 hotel rooms, with 9,100 projected for next year ? up from 5,731 only five years ago. In-season rates at one boutique hotel begin
at $250, and rates run as high as $5,000 a night for a three-bedroom suite.
As many golfers as fishermen now visit, lured by nine courses, including the oceanfront Jack Nicklaus-designed Cabo del Sol, where prime-time greens
fees are $262. Increasingly, visitors come not to golf or fish but to be pampered at luxury spas.
To "old-timers" ? and that includes those who have lived here for 20 years ? there's something of a through-the-looking-glass quality to this. At
Minerva's Bait and Tackle in Cabo, Bob Smith, who settled here with his wife, Minerva, from Los Angeles in 1978, recalls, "This was just a small
village. Everybody knew what time it was because they blew the whistle at the (now-defunct tuna) cannery. That was the only industry.
Smith, who operates three charter boats, is among those fighting to restrict commercial fishing. "This used to be a great swordfish area. Now you're
lucky if you ever see one."
Time shares have become almost synonymous with Los Cabos. Having dodged the airport hawkers who pounce on arriving passengers, I felt victorious ?
until at the Avis office my car keys came with a time-share pitch (car discount and free breakfast). "Time scares," some here call them, and the hard
sell abounds.
In town, salesmen pop out of booths. Even at the newish Pueblo Bonito Sunset Beach Hotel, about 10 minutes west of central Cabo San Lucas, where the
small lobby is dominated by a gilded and silvered carving of an archangel and a painting of cherubs and saints in the manner of colonial Mexico, the
desk clerk is pitching the hotel's time shares. (In Los Cabos, time shares piggyback at most hotels.)
At Pisces Real Estate in town, Marco Ehrenberg talks about "the time-share craziness," which took off in the late '80s. "Cabo is one of the most
successful time-share places in the world," says Ehrenberg, also a founding co-owner of El Squid Roe, a raucous and fabled nightspot that after 15
years still packs in the dance-on-the-tables-and-have-tequila-squirted-into-your-mouth-with-a-spray-gun crowd. Juan Zamora, president of the Timeshare
Association of Los Cabos, says that four of the area's 18 time-share resorts are sold out and the other 14 account for "around $140 million" in sales
annually, at an average price of $16,000 a week.
Ehrenberg's wife, Tracy, a transplanted Brit, runs the other family business, Pisces Sportfishing at the marina, booking luxury fishing charters for
catch-and-release billfishing for up to $3,500 a day. When the Ehrenbergs arrived, Cabo's population was 4,800. Today it's about 100,000 in Los Cabos.
"There were donkeys right along the main street, eating out of trash cans," she says.
Marco Ehrenberg, who is the chamber of commerce's vice president for tourism, sees the stunning transformation of Cabo as a good thing for the locals,
but thinks the tourism industry may be overreaching.
"Where's the service? Where's the quality of the product?" he asks. "I think we're going to get an adjustment. Even millionaires expect value for
their money."
In the February issue of Andrew Harper's Hideaway Report, which caters to the high-end market, Cabo gets a scolding from readers, the editor reporting
"lots of Baja humbugs for 'outrageous,' 'unconscionable,' 'sky-high' rates for food, drinks, golf and other amenities.' "
Puerto Paraiso, a new tri-level mall at the Cabo San Lucas marina, has 350,000 square feet and plans for 200 shops, but, save for the bowling alley
and children's play center and a multiplex cinema that opened in December, it's a ghost town, with only a handful of retail occupants. Two more hotels
and a convention center are planned.
The still-quieter San Jose, once a snoozing 18th-century mission town, has definitely woken up and now has more than two dozen hotels, upscale shops,
restaurants and art galleries.
Patrick Sanchez, general manager of the Westin Regina on the corridor and vice president for marketing of Los Cabos Hotel Association, is a
self-described "cautious optimist" but acknowledges that the situation is "very challenging." Last year Cabo room rates were slashed an average of 30
percent.
"That's the good news, because we are a very exclusive resort and a very expensive resort," he says. But he is somewhat "alarmed" that group bookings
have dropped from 2002 because of Sept. 11, the U.S. economy and the Iraq war.
Sanchez stops short of saying that Los Cabos is overbuilt, but sees problems if supply continues to outpace demand. Mother Nature has imposed one
control on the beachfront: a series of unbuildable arroyos that slice through the desert to the sea. The government hopes to impose another, requiring
that new developments have facilities to reclaim water and to desalinate drinking water.
"I think we have learned from the rights and wrongs in other destinations ? Canc?n, Acapulco, Mazatl?n," Sanchez says. There is talk of requiring new
developments to help fund updating of Cabo's infrastructure ? roads, lights, water and power.
"Value" is a word heard over and over. Most of the fancy hotels were built before Sept. 11, Halliburton of Twin Dolphin says. "People were paying way
too much money for everything and charging too much money for everything." Tourists have been "hammered," he adds ? top prices, minimal hospitality ?
and many have gone elsewhere. "This is the most expensive destination in Mexico, but the big money is leaving town."
"If the tourists stop coming," he muses, "they'll probably have to fire that cannery up again."
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Neal Cox
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Posts: 21
Registered: 8-28-2003
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What a great post!! As one who loves Baja, I feel sorry whenever one takes on the Cabo area. With all of it's problems, it is a great place to visit.
I usually spend most of my time in Baja out side of the Cabo area, but I still have a great love for that area. I think the questions and concerns
you have raised are valid and appropriate.
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