Paying in Pesos Snags Mexico’s Best Room Rates

A few weeks ago, a taxi driver and I were rambling around the coast of Mexico between Puerto Vallarta and Manzanillo. On a bluff atop a lonely beach we found Punta Serena, an adults-only holistic retreat that serves mostly American clients. A gorgeous spot.

The place had 21 rooms in whitewashed Greek-villa style, a restaurant with lots of vegetarian options, bluff-top hot tubs, views to compete with Big Sur and a twice-weekly sweat lodge ceremony. Around the pool, over at the hot tub and down at the private beach, swimsuits were optional. But the site and the dress code may not be the biggest surprises waiting for inexperienced American tourists at Punta Serena. There’s also the money.

Punta Serena is an all-inclusive place: Your money buys lodging, meals, horseback rides, yoga, a spell in the sweat lodge and so on. The rates, the on-site staff told me, run 780 to 1,020 pesos per person per night, with highest rates in winter, lowest rates during the muggy summers. At the prevailing local cash exchange rate of about 9 pesos to the dollar, that translated out to about $87 to $113--from what I saw, a pretty good deal.

Then I returned home, and things seemed to change. When I called the resort’s U.S. toll-free number, (800) 551-2558, and checked its Web site (https://www.puntaserena.com), the rates were quoted at $110 to $135 per person per night. That’s a price boost of more than 25%.

Had the hoteliers lost track of the exchange rate? No.

Had they included the usual 17% in Mexican taxes in one figure and excluded them from the other? No. In fact, unlike many Mexican resorts that aim for Americans, Punta Serena quotes all its rates with taxes included.

The reason for the difference is a simple economic generalization that’s common in the Mexican tourism industry: the idea that most Americans can afford to pay much more than most Mexicans can. With that in mind, said Fiona Taylor, president of the Creative Marketing Alliance, the New York firm that represents Punta Serena here, the resort is one of many in Mexico that keep two rate scales.

If you call from the U.S., you’re quoted the higher dollar rate, Taylor says. But “if you were in Mexico and you showed up, you could pay pesos.” In fact, she added, even though plenty of businesses in Mexican tourist areas now merrily accept dollars, as a consumer “you’re going to be at an advantage if you go down and transfer your dollars to pesos [at a bank], wherever you go.”

But that last-minute approach might not work with a resort like Punta Serena. It requires full payment in advance, and most fall-season rooms are booked by the time summer gets underway. By May 21, Taylor noted, Punta Serena was already sold out for September and October.

Though few in the hotel trade like to talk about it, it’s long been common for lodgings and other businesses in Mexico to quietly maintain separate dollar and peso prices. If you look Mexican, or seem Mexico-savvy and speak passable Spanish, you may get quoted the peso price. If you call a toll-free number in the U.S., or merely show up with blond hair speaking English, you’re likely to be quoted the dollar price.

The last time I ventured near this subject, in 1996, I ended up drafting a Spanish-speaking travel agent and conducting a semi-scientific test. One late October day, we chose a date in December and made a round of calls and computer contacts with half a dozen major chain hotels from Acapulco to Cancun. We wondered if the language spoken affected the rate quoted.

Speaking English, I asked rates from U.S. toll-free numbers as well as local numbers in Mexico. Speaking Spanish, the travel agent tried the local numbers only. Then we checked out her computer reservation system. In a perfect world, the six hotels would each have offered the same price four times. Instead, we got 18 different prices. The best prices came over the travel agent’s computer and to the Spanish speaker, and those rates were usually offered to the Spanish speaker in pesos.

Moral of story, then and now: If you’re improvising in Mexico, always be on the lookout for the peso price, no matter how eager local merchants are to accept dollars. But if you’re bent on lining up your arrangements before leaving the U.S. (often a prudent thing to do), you’ll probably pay a premium for that security.

Unfortunately, getting a fix on differences between peso and dollar prices is difficult unless you’re already on the scene in Mexico.

“It seems to vary from resort to resort. I have found there’s usually about a 10% difference [between the dollar and peso rates], and I attribute that to the fluctuations of the peso,” says veteran Mexico traveler “Mexico Mike” Nelson.

Nelson’s firm, North Hollywood-based Spa World Reservation Service (tel. [800] 321-4622, Internet https://www.spagetaway.com), connects travel agents and travelers to about 20 spas and holistic retreats throughout Mexico.

“Most of these places set their rates about a year ahead,” Nelson said. “That’s certainly not an onerous difference, considering they’ve got to guess where the dollar’s going to go.”

Indeed, if you follow the exchange rates used by banks in million-dollar transactions, the dollar gained about 9% against the peso between May 1998 and May 1999. While the merchants around town were giving an even 9 pesos per dollar during my May visit, the wholesale trading rate was about 9.3 pesos per dollar, and the rate offered by Thomas Cook’s airport kiosks was about 8 pesos per dollar. (Secondary moral of story: Do your major Mexico buying with a credit card, thereby enjoying the banks’ wholesale rates; and trade your cash or traveler’s checks for local currency at a bank, not at the airport.)

When travelers ask for peso advice, Nelson says, he tells them: Yes, an American with workable Spanish, a calculator (for exchange-rate translations) and a zest for long-distance calls might be able to save a bit by chasing peso prices. But as Nelson says, “Your time is worth something. It’s going to take a little time, and it’s a little frustrating.”

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Christopher Reynolds welcomes comments and suggestions, but cannot respond individually to letters and calls. Write Travel Insider, Los Angeles Times, Times Mirror Square, Los Angeles 90053, or send e-mail to chris.reynolds@latimes.com.