Los Cabos Increases Tourist Taxes in 2025 With the “Embrace It” Fee and Other Charges Making It More Expensive

Los Cabos Increases Tourist Taxes in 2025 With the “Embrace It” Fee and Other Charges Making It More Expensive

Los Cabos Increases Tourist Taxes in 2025 With the “Embrace It” Fee and Other Charges Making It More Expensive

In 2025, Los Cabos introduced the “Embrace It” tourist fee alongside a range of other charges, significantly increasing the cost of visiting the destination. The “Embrace It” fee, aimed at funding environmental conservation and tourism infrastructure improvements, adds to the already high cost of accommodations and activities. With new levies on hotels, Airbnb rentals, and cruise passengers, tourists are facing rising expenses, leading many to question if the added costs are worth it.

On July 1, 2025, Baja California Sur launched the “Embrace It” tourist fee, initially set at 470 pesos (about US $28), later raised to 488 pesos. The fee applies to visitors aged 12 and older who arrive from outside Mexico and stay for more than 24 hours. Paid digitally through an official website, tourists are given a QR code to show as proof of payment.

Despite the fee’s goals of supporting environmental efforts and infrastructure development, it has faced backlash due to inconsistent enforcement. In the first six months of its implementation, Baja California Sur collected 256 million pesos from 544,680 tourists. However, with over four million international arrivals to Los Cabos alone, a significant number of tourists appear to have avoided paying, possibly due to poor communication or frustration with what many consider just another tax on visitors.

Tourist Taxes in Los Cabos: A Growing Burden

Los Cabos, a top destination in Baja California Sur, has long been a hub for international tourists, particularly from the U.S., Canada, Europe, and Central America. While the “Embrace It” fee is the latest in a series of levies, it’s far from the only tax tourists face. In fact, the region has long been known for its high tax burden on visitors, beginning when they purchase their airline tickets, with a surcharge of around US $42 for the tourist visa required to enter Mexico.

Once in Los Cabos, visitors are subjected to multiple taxes, starting with a 4% lodging tax that supports the Los Cabos Tourism Board and infrastructure projects. The Environmental Sanitation Tax, levied at about US $4 per night, also applies, as does the Impuesto al Valor Agregado (IVA), a 16% sales tax that applies to hotel room rates, food, beverages, and amenities.

Additionally, a service charge ranging from 15-18% is often added to hotel bills, on top of the IVA, bringing the total taxes on hotel stays to as high as 30%. For those staying at high-end resorts, such taxes can add a substantial amount to the overall cost of their stay. In October 2025, the average hotel rate along the coast between Cabo San Lucas and San José del Cabo was a staggering US $596 per night, meaning taxes could run as high as $175 for a single night.

The Rising Cost of Airbnb Stays and Cruise Taxes

It’s not just hotels that are affected by these taxes. Airbnb rentals have seen their taxes increase by 600% in 2025, adding further financial strain for visitors choosing non-hotel accommodations.

Cruise ship tourists, once able to avoid many of the taxes imposed on land visitors, now face their own set of charges. A new tax of US $5 per person was introduced in July 2025 for all cruise passengers arriving in Mexico, with planned increases of $5 per year, reaching $21 by 2028. This tax, while still lower than those applied to land-based visitors, will undoubtedly add to the overall cost of a trip for cruise-goers.

A Growing Backlash from Tourists and Local Industry Stakeholders

It’s not only tourists who are upset with the rising number of taxes. Many local industry professionals, including those working in hotels and tourism, are concerned that the excessive taxes will deter visitors. In particular, the stacking of taxes — from the “Embrace It” fee to the Environmental Sanitation Tax and the cruise ship levy — is creating a sense of frustration among both tourists and local businesses.

Some hotel managers have expressed concern that tourists may begin to avoid Los Cabos altogether if the tax burden becomes too high. The region’s growing reputation as an expensive destination could drive travelers to look for more affordable vacation spots elsewhere. This has led to fears of a decline in tourism revenue, despite the state’s efforts to improve infrastructure and conservation efforts.

The Challenges of the Embrace It Fee

One of the main issues with the “Embrace It” fee is its execution. Inspired by the VISITAX in Quintana Roo, which has been in place since 2021, the new fee has faced similar challenges. The system for online payment processing, managed by the Canadian tech company Travelkore, has encountered issues with credit card approval and fraudulent websites that mislead tourists into paying fake fees.

While the fee was intended to be mandatory, its inconsistent enforcement has led to many tourists skipping the payment process entirely. The lack of clear communication about the fee’s necessity, coupled with unreliable enforcement mechanisms, has contributed to a sense of confusion and frustration among visitors. Some tourists, especially those who are unaware of the fee, have simply chosen to ignore it, further undermining its effectiveness.

The Long-Term Impact of These Taxes on Tourism

As Los Cabos continues to raise taxes on visitors, the question remains whether this model is sustainable in the long term. With multiple fees being imposed on tourists for a variety of services and amenities, visitors may begin to look elsewhere for their vacation spots. The growing cost of visiting Los Cabos, combined with concerns about unclear taxation and enforcement systems, could ultimately harm the destination’s appeal.

In 2025, Los Cabos raised tourist taxes with the introduction of the “Embrace It” fee and additional charges, making it a more expensive destination for travelers. These new costs, including higher fees on hotels, Airbnb rentals, and cruise passengers, have sparked frustration among visitors.

For now, however, the “Embrace It” fee and other taxes remain in place, with the government citing environmental and infrastructure improvements as the intended benefits. The challenge, though, will be to balance the need for funding with the need to maintain a competitive and attractive tourism market. Only time will tell whether these taxes will succeed in funding the desired improvements or if they will ultimately drive visitors to more tax-friendly destinations.

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