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Hotel rates are set to rise in Cancun following an announcement that stated the city would be raising its lodging tax. Currently one of the world’s most in-demand destinations, with occupancy levels at around 80% right now and set to reach their limits over the next few months, the news is set to come as a blow to the millions of travelers who choose Cancun as their go-to vacation destination every year – and it could lead some travelers to pick more wallet-friendly destinations in the future instead.
The planned raising of the lodging tax is the latest of several blows to the hotel industry in the city – who have also been wrangling with the prospect of an increase to their environmental sanitation tax levels – and, as is often the case in these situations, it’s thought that the guests will be the ones forced to incur these extra fees via an increase in room rates. Here’s everything travelers need to know about the planned raising of the lodging tax, plus a recap of the other struggles hotels in the region are also facing.
Lodging Tax Set To Be Raised – Information For Travelers
It’s fair to say that as far as travelers are concerned, the travel-sphere has been flipped upside down over the last 24 months. Whilst once destinations and hotels were crying out for guests in the midst of the pandemic and offering insanely attractive deals and promotions in an effort to claw back reservations by any means necessary, fast forward two years, and it’s very much back to how life was before we’d even heard of Covid-19 – and in many destinations, it’s even more expensive.
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If that wasn’t the case before, it’s certainly set to be the case in Cancun. Firmly back on its feet and doing better than ever in terms of traveler numbers, authorities in one of the hottest destinations in the world are seizing the opportunity to introduce a series of tax rises in the hotel industry.
The latest such change is the planned rise in lodging tax. Lodging tax is a fee charged to travelers when they book hotel rooms and is pretty standard practice around the world. At present, the lodging tax in Cancun is 3%, but plans are afoot to increase the tax level to 5%; whilst not a significant increase on the face of it, over a two-week stay, it could make attractive room rates appear notably less so.
These plans were introduced as part of the government’s austerity plans and are set to be introduced alongside other cuts, such as a reduction in the amount spent on advertising and reducing employee perks. The governor of Quintana Roo, Mara Lezama, stated that the money saved by these measures will be reinvested towards social funds for matters such as security, health, social development, and tourism promotion. It is not yet known when the changes will come into effect.
However, this isn’t the only tax increase facing the hotel industry in the city. Hoteliers and the local authorities are currently locked in a very public battle about plans to raise the environmental sanitation tax to 40%, with hotels threatening to denounce the mayor of the city over such plans. With passing the costs on to travelers in the form of room rate increases as an easy way to soften the blow, stays in Cancun could be set to become significantly more expensive.
Such increases will also be in effect alongside other fees that travelers have to pay, such as the tourist tax per traveler, which currently stands at 224 pesos (approximately 12 USD), the city tax, and a 16% VAT rate on hotels. Whilst it remains to be seen whether or not the lodging and environmental sanitation tax increases will go ahead, travelers with an eye on Cancun for a 2023 vacation might want to start increasing their budgets to be safe.
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