01 — The fundamentals, on one page
The 2025 picture: ~4M visitors, occupancy ~75%, Mexico’s highest ADR ($500+ blended, $800+ luxury tier), and private aviation at record levels on roughly 17,000 rooms. Demand is 80%+ North American and remarkably rate-inelastic at the top: festive weeks sell out at multiples a year ahead. The supply side is the story: the swimmable beachfront is essentially built out, which converts every remaining plot into a scarcity asset.
02 — The pipeline, complete enough to list
· Amanvari (Costa Palmas, East Cape) — Aman’s Mexico resort debut
· Park Hyatt Los Cabos at Cabo del Sol
· St. Regis Costa Azul — Corridor trophy with residences
· Four Seasons expansion at Cabo del Sol
· Soho House & lifestyle-tier additions in San José
· St. Regis, Park Hyatt and Aman residential components lead pricing
· Pedregal and Quivira villa programs $3–15M
· Montage/Auberge estate resales at record psf
Note: in Cabo the for-sale product consistently outbids hotel economics on prime plots — residences are the market’s true pricing engine.
03 — Why supply stays scarce
Three structural brakes. 1. Water: the aquifer math caps growth; every major project now underwrites its own desalination, adding $10–30M to development budgets and favouring deep-pocketed flags. 2. Land control: the premium coves sit inside master-planned communities (Del Mar, Cabo del Sol, Quivira, Costa Palmas) that release hospitality plots on their own schedule. 3. Hurricane underwriting: insurance and construction standards post-Odile raised the capital bar — cheap product no longer pencils. For investors the conclusion is friendly: oversupply is the one risk this market does not have.
04 — Where the capital goes
Four lanes. 1. Existing trophy resorts: rate growth against fixed inventory is the cleanest inflation-plus trade in Mexican lodging. 2. Branded residences: the deepest demand pool — US buyers paying cash, HOA-subsidized hotel economics. 3. Lifestyle boutique in San José: the art district lacks design-led sub-100-key product; the gap is visible. 4. East Cape: Costa Palmas proved the thesis; land is still cheap by Corridor standards and Aman’s arrival reprices the entire coast.
05 — Risks, sized honestly
US concentration: a US recession cuts Cabo arrivals within one quarter — there is no European backfill. Water cost escalation: desalination capex is manageable for $1,000-ADR product and fatal for mid-market — the pipeline skews luxury for a reason. Hurricane tail risk: a direct hit closes the destination for a season; insurance repricing is the quiet variable. FX: peso strength compresses dollar margins for operators paying peso costs.
06 — Scenarios to 2030
07 — What we would do
For the investor: buy existing swimmable-cove product or East Cape land before Amanvari opens — the repricing has a date. For the operator: the San José lifestyle-boutique gap is the white space with the lowest capital bar. For the developer: underwrite desalination first, then the flag; on this coast the water plant is the hotel’s true foundation. For all: treat September as a data point about resilience, not a reason to leave — post-Odile Cabo rebuilt in months, not years.
Sources: Fiturca market releases; STR/CoStar; developer announcements (Aman, Hyatt, Marriott, Four Seasons); Los Cabos water-utility and desalination project disclosures; Baja California Sur hospitality press. Verified as of August 2026.