Vacations In Mexico Just Got More Expensive For US Travelers

Mexico has always been a popular destination for American travelers, with around 40 million visiting in 2019 prior to the pandemic. Now the pandemic is in the rearview mirror, demand continues to soar for Mexican travel, with airlines putting on new flight routes to keep up with the demand. However, while demand increases, traveling there just became far more expensive for those who spend the US dollar.

Mexico just got more expensive for US travelers

As the demand soars, why is Mexico suddenly becoming expensive for American travelers? Quite simply this is due to the fact that the Mexican economy and the value of the peso is soaring against the US dollar. Right now, USD$1 converts to 17.21 Mexican pesos. Reportedly, this is the strongest rate against the US dollar in more than seven and a half years. Meanwhile, in 2022, the peso strengthened by around 12.6 percent against the US dollar. In fact, the peso hasn’t been this strong since December 2015. So, what does this mean for Americans taking a vacation in Mexico?

Basically, when the value of the Mexican peso is high, travelers will be able to buy less for their US dollar. In other words, Americans will have less purchasing power, meaning they must expect to pay more for normal tourist purchases on their vacation.

As the US dollar has historically been strong against the peso, this will likely come as a shock to many US travelers.

Budget travelers and Mexico

Previously, travelers on a budget chose Mexico as it was an affordable destination for their vacation. However, with the stronger peso, the country’s top tourist destinations are noticeably more expensive. In fact, the Mexican destinations can now be seen as on par with most of the popular US vacation destinations.

To get an idea of the change, during the last few years the Mexican peso has hovered around 20 pesos to the US dollar, but now a dollar is only worth 17 pesos. While that might not sound too significant, this will make a major difference in travelers’ spending money. One example is the price of the average taxi journey from Cancun Airport to downtown Cancun, which is 1,400 pesos. On the previous exchange rate, the taxi would have cost $70. However, with the stronger peso, the same journey will now be $82.

Another example is the cost of an average cocktail in downtown Mexico City is around 185 pesos. With last year’s rate that would have been $9.25, but nowadays it will knock you back $10.80. Moreover, everything you pay for with pesos is going to cost you more.

How will this affect accommodation?

A room in a luxury hotel in Mexico costs on average 3,700 pesos per night, which last year would have been $185 per night. However, with the soaring peso, that same room is likely to knock you back $217 per night.

In the meantime, Bloomberg reports that Mexican travelers are heading to Las Vegas and Orlando with their strong pesos.

Of course, prices are currently rising worldwide with the cause blamed on the Ukraine war and more. On Mexico’s part, the soaring peso should be good for the country’s economy and it likely won’t stop American travelers heading there for their vacation, no matter what.