Hotel Occupancy in Los Cabos
Market
trends indicate that over the next five years Los Cabos is projected
to have more demand for hotel rooms than the current supply. The
number of tourist arrivals to Los Cabos continues to increase having
a positive effect upon both hospitality and real estate. But how have
hotel occupancy rates fared?
Healthy
occupancy rates are keys to a sustained recovery. Hospitality
occupancy rates and tourist
arrivals
are leading indicators of the
strength
of the Los Cabos resort
market.
Historically, as the number of
tourist
arrivals has increased, hotel
occupancies
rates have also increased. The market can respond to additional new
demand by either the development of new hotels or increasing rack
rates. Los Cabos has historically had a combination of both, which
has led to a generally stabilized hotel market and no oversupply.
This balance has
generally
helped Los Cabos recover
from
the recession faster than other competitive markets.
The
trends indicate that the Los Cabos four and five star hotels can
easily absorb new demands.
As
market occupancies rise above 70%, the market is then able to sustain
increased rack rates. While an increased occupancy at current rates
is better than an increase is rack rates, the projections indicate as
the expected new demand becomes a reality both occupancies and rack
rates can increase, especially
along
the Los Cabos corridor.
While
it is important to note that every hotel in Los Cabos may not warrant
an
increase,
the general trends show that the market is becoming healthier to be
able to sustain increased occupancy and rack rates.