can tourism support an economy?

by Nick Fong, broker, los cabos agent

According to the World Bank DATA (WBD), Tourism as a whole in 2015 generated over 1.4 trillion dollars in revenue worldwide. In 2016, Mexico was number eight on the top 10 vacation destinations list that was published by the United Nations World Tourism Organizations (UNWTO). The UNWTO reported that in 2016, Mexico and its popular tourist destinations shared 35 million visitors between them. This is up 8.9% over the previous year. The question proposed is this, “Can Tourism support an economy?”

The 18.7 billion dollars generated in 2015 according to a WBT report was divided throughout Mexico’s most favorable regions. The more popular destinations like Mexico City, Puerto Vallarta, The Riviera Maya, and Cabo San Lucas to just mention a few – with the exception of Mexico City, heavily depend on tourism dollars to survive. There are limited economic provisions for these cities to fall back on, so tourism is by far their number one revenue producer. When tourist arrive they spend their money on accommodations, food & drink, and in the local shops and markets.

With all the revenue coming into the system – local economy, it has a trickledown effect. Business owners pay their employees and servicing vendors. In turn, the suppliers are able to pay their staff as well. The government collects its fair share to pay the city employees to perform their assigned jobs, keep the street lights on, and support the local law enforcement who keep the city safe. Everyone ends up with money in their pockets.

One of Mexico’s most prized resort destinations is Cabo San Lucas. This vacation mecca depends a lot on tourism. With that in mind, it also brings foreign investment to the area. Cabo San Lucas’s real estate market is one of the hottest in the region. Investors from around the world come to purchase second homes, rental property, and even look for permanent residences as well. Some of the reasons why are due to lower cost of living, the fabulous weather and relaxed life style. These are only a few of the reasons why tourism is alive and well in Cabo San Lucas.

With the good, can come the bad. There are some negative factors that do affect tourism and a sustained economy. As of late, several world news media sources can disrupt a seemingly safe environment with pretentious rumors and suggested cautions when traveling to certain cities or even regions. This is not to say that being cautions is a bad thing and should always be practiced no matter where you are. However, there is no need to worry when visiting or thinking about investing in Cabo San Lucas and its growing corridor. Cabo is considered to be one of the safest destination in Mexico.

So going back to the original question and that is, ‘Can tourism support an economy?’ In my opinion it most certainly can. Destinations that provide an atmosphere that includes a desirable environment, a chance to spend time away from daily routines, and enjoy activities normally not done will always attract tourist from all over the world. When people are truly having fun, they spend money. Remember the trickle down affect? Everyone benefits no matter what end of the spectrum they are on.

By:  Nick Fong, Broker of Los Cabos Agent. For questions or comments please contact Nick at 624-157-3170 or