All Inclusive Resorts Accused of Harming Local Economy

The money stays in the resort until the profits are taken by out of town and out of country owners

Merchants in downtown Cabo and San Jose are concerned with the trend to all inclusive hotels. That’s the system of paying up front for a resort vacation, including all the drinks and all the food. Vacationers like it because it contains the cost of their trip: They know the total amount of money they are going to spend. Resorts like it because they make money on the food and drink. As far as the local merchants liking it? Not so much. Everyone has a conflicting perspective, depending on how they earn their paycheck.

immigration.jpgLocal all-inclusive hoteliers claim the all-inclusive holiday packages are a direct response to U.S. and Canadian tour operators’ demands and pressure, saying it’s not their fault that local entrepreneurs such as restaurant, bar and shop owners are hurting. Half empty restaurants and bars are blamed on the all inclusive tourism product. And so who takes it in the shorts again? All the local people who are just trying to carve out a living. And who profits again? The richy rich investors who do make it all happen by building the infrastructure.

 The resorts, (which are usually owned by either an overseas company or well financed companies out of Mexico City), rakes in most of the tourist’s cash, leaving little behind in the local community. They do employ local labor, but give little back to communities in the way of economic benefits. Vacationers often use vast quantities of energy and water and create large amounts of waste, which some feel is a high price to pay for little commercial return.

Belgian entrepreneur and former athlete Gerard Blitz pioneered the concept of all inclusive holidays using army surplus tents in Majorca in the 1950s. Then the French owned Club Med resorts, where food was included and you paid for your drinks in plastic beads worn around your neck, expanded on that. Thus was born the cheap all inclusive holiday that has become the habit of millions of holiday makers.

The first part of February saw our airport experiencing record levels of traffic. The operators of the airport reported receiving more than 3.5 million passengers last year, up up more than 12.5% over 2014, but the merchants are whining that this new prosperity is not reflected in their sales. Some blame this on the all inclusive business model.

 Sylvia Warnes, her husband, sister and brother in-law all from the Bay Area, stayed at the Riu Palace hotel here in the Cabo recently for a week of golf and relaxation. The Riu Palace does not have a golf course, but promoters cleverly packaged it with local courses.  The cost for seven days all inclusive at the Riu for four adults came to US $1,700 per person which included three rounds of golf. Without golf they pack them in for as little as $600 a week. The owners of The Riu Palace are based in Spain and have more than 100 hotels across 19 countries. Rui is part of the TUI Group, which is one of the world’s largest multinational travel and tourism companies with headquarters in Hanover Germany. They gross about $19 billion annually. The Warnes family paid $6,800 to a California based travel agent who paid a Spanish based hotel group which in turn sent their portion of the profits to a holding company in Germany.

Sylvia Warnes stated, “just getting to the airport in San Francisco and then simply switching off for the week with precious few decisions to be made was an attractive quality to the vacation and we would buy an all inclusive again”

allinclusiveresorts.jpgAnother barrier to going into town are the measures taken by the concierges and hotel staff of even the non all inclusive resorts.  These workers are often told by hotel management do discourage the tourists from going into town, in order to build up business for the on site restaurants. They tell the visitor that it is dangerous to leave the property, or that at the very least they will be ripped off by the businesses in town or by the police. Which brings us to the another problem: The police. They seem to be somewhat calmer now that we have a new administration, but there are still scattered reports of  extortion of tourists and expats by the police. Foreigners often say, “but they have to care about us, we are their only income.” True, but you will never get your average Mexican to understand that, much less care.

And how are they going to get into town? Another problem for downtown businesses is the high cost of taxis here. The round trip taxi ride into town from the hotel to restaurant can often cost more than the dinner and drinks. This is because the several taxi cartels are owned by powerful families with influence in the state legislature. Each election cycle we get our hopes up that the new administration will stand up to these thugs, but it never seems to happen.

Rental cars is the solution? Not a good solution, because the major rental companies, the ones with the American names that the Americans have faith in, are owned by just a few companies, members of an extended family, and they are in cahoots with the prices. They also extort money from their renters by claiming it is neccessary to buy insurance that easily doubles the expense od renting the car. Then there’s the old, “where are your floor doilies?” trick. They claim you rented the car with those silly plastic mats, which are now missing. Of course they were never there, but who notices that when you’re renting a car? And, rental cars have unique pink tinted plates that scream out, “I’m a foreigner and I’m bending over for you now, so please come take advantage of me.”

Then there’s the timeshare hustlers who pester us as we walk down the street, and the beach vendors who pester us as we walk down the beach.

The short story here, (yeah, it’s too late for that), is it takes a village to please the visitors, that all the Mexicans have to work together to make this a hospitable enviornment, and that’s not going to happen any time soon, because to the Mexican making $800 or $900 a month, they will gladly take an ill gotten $50 or $100 today and not worry about not having anyone next week to take from. Their attitude is they got along without us before, just fine, and tthey can get along without us again, just fine.

Of course they have forgotten that before the foreigners, there were only a tiny fraction of the people living here then, and they were scrambing for a living, working for minimum wage, (less than $5 a day), toiling in the cannery.