Why are businesses having the worst summer if tourism is breaking records?

As Puerto Vallarta is welcoming a record number of tourists this summer travel season, many business owners say they are having the worst summer sales in years.

So here is this week’s “Vallartenses Voice” question:

What can the city and business owners do to help increase local sales and get our record number of tourists to explore more of our area and open their wallets a little more?

We would like to hear from locals and tourists with the viewpoint as a shopper in our area, and also businesses from the business aspect of the issue. As we have learned in several “Vallartenses Voice” segments, the shopper and the business owners seem to always be on opposite sides of the argument.

Tell us what you think in the comments section below.

40 Responses
  1. Dale Trebbs

    We live in PV six months a year, our condo is already stocked with Mexican art. We spend money primarily on dinners and some entertainment. We have little interest in shopping and souvenirs. How many “tourists” are like us. Restaurants are less expensive in PV than the US. Three margueritas or two bottles of wine are what makes meals pricey…no matter where you are.

  2. Patricia Lestz

    I am so happy that we are getting more people to visit Vallarta. Why they are not spending more
    money. I do not know other than I think families are more inclined to come in the summer and
    all inclusives are easier and in many cases more relaxing if you have kids. The one thing I
    do wonder about is why are airfares to Vallarta so high as compared to Cancun. It is often times less money to fly to Cancun from L.A. than to Vallarta?

  3. First, we need to get tourists off the all-inclusive resorts. This could be accomplished by getting the Hotels to educate and encourage tourists to leave the resort during the orientation session. I like the idea of providing free shuttles between the North hotel zone, Centro and Zona Romantica. We also need to get the resorts to not have the sales at the resort. Second, once the tourists leave the resort, we have to get them “off their wallet”. As a small business owner, I see the value in advertising prices, because that is what tourists are used to. Just because you advertise a price, does not mean there is no haggling or bartering, if the individual wants to.

  4. Our hotel Casa Cupula and Taste Restaurant has enjoyed record occupancy every month since last December (September to November last year were terrible for us especially due to the US Government shutdown). September this year is double last year.

    We do not do all inclusive and encourage our guests to get out and about and they spend millions of US$ annually in town. Sadly we are a bit of an exception. The numbers we read about, while true are arrivals, they don’t speak to where the tourist is going. From what I’ve heard, the business is indeed up in Nuevo Vallarta and in the newer all inclusives. All inclusive guests don’t want to leave and spend $$ in town.

    As for prices in restaurants and even shops, another sad fact that people seem oblivious to is that as of January the federal government changed tax law to make all restaurants pay IVA. But menu prices must list the price INCLUDING IVA, which used to run 6-8% in taxes, now it’s 16%. So costs went up 8-10%. Uncle Samuel is trying to collect IVA from every tiny little business and it is killing small businesses. New reporting requirements are badly stressing our business, I can’t imagine how smaller companies can keep up and not get fined. And the fines are stiff. More business pressure. The govt even charges IVA to tip money deposited by credit card, depriving waiters of about 14% of their tips.

    If you are a PV regular on a budget, try to eat at a good quality PV restaurant from time to time as a splurge if you can. And talk them up even if you don’t want to pay those prices for yourselves, others may. Great restaurants draw tourists to town, and too many have failed. What kind of destination only has taco stands and Oxxos?

    We just launched a new marketing campaign and are constantly marketing internationally to bring people to PV. My impression is most businesses don’t reach out to international clients, and most have a copycat attitude instead of working to create something unique and memorable and then promote it. I think you’ll see that the businesses that are doing the best are the ones with great reputations, strong market niches, strong returning customers, and consistent management.

    Another very tough point is the seasonality of the market. Even if we could afford to hire a top chef for 5 months of the year, we can’t afford to pay him to twiddle his thumbs for the other 7. So it’s hard to keep talent. This is true for other management positions.

    On the bright side, airfares are going down because airlift capacity is going up as Mexicana’s old slots get taken up. Southwest is about to launch a new hub to Mexico. Fear of getting killed when you visit Mexico is practically over, but it paralyzed us for about 3 years (2011-2013). And as the economy improves people are starting to travel again.

    It’s easy to cast blame, but it’s a challenging situation. Get active and get involved, if you love the destination. And don’t talk the destination down publicly even if you feel that way. Get involved with your neighborhood association and advocate for improvements. Email us at the Amapas Neighborhood Association (I am treasurer) if you need pointers…[email protected]

    1. VallartaDaily.Com

      Thanks Don, I don’t think the problem is All-Inclusive, or it is a small percentage of the problem. Businesses suffer every summer not because tourism is down, but because in the winter months businesses do not need to do much to make money except open their doors. When the slow season comes they are clueless on identifying their market and being creative in getting their niche customer into their door. That really is the problem, it’s not the tourist, even though summer tourists are a bit more frugal and visit the area when things are much cheaper, they still have money to spend at the businesses that are successful at getting their attention.

  5. Put reasonable prices on the items you are selling—-with attached price tags—Don’t try and grab me verbally as I walk by (tequila shops)—Get rid of the attitude that the price for me should always be higher than for my Mexican partner–because I am a rich gringo! All the shops seem to sell the same stuff. I don’t buy alot because I am tired of feeling that all they want is ALL my money. Example—I went into a resale shop two days ago—where I have purchased many items in the past–at a reasonable price—but after weeks of negotiating. The sales person had a multi-colored glass-candle lantern for sale—asked the price—1800 pesos—I can buy the same item at TJ Maxx in America for $19.00 US. Now this is ridiculous! I told the person I’ll be back in a couple of months and ask the price again—LOL!

  6. Get SOME of the restaurants to lower there prices. They r higher than ours in Canada.Even the foodstores r a lot higher than past years. Also,,,,, vendors. How high do they have to go on t-shirts?? just wondering..

  7. I’m a travel agent and book the vacations…I sell 3x more to Cancun and the Maya Riviera than here because the airline prices are much cheaper. So I’m not sure why they are saying we have a record number of tourism here. Besides that, when I do book most everybody now wants all-inclusive now. All-inclusives keep people in the resorts where they don’t venture out as often to spend money in the town.

    1. But travel agents make a larger commission booking all inclusive resorts so they tend to push them a little more, right? It makes sense that people going with travel agents are going to end with a packaged deal, it’s part of the industry. I think all inclusive resorts have their place in tourism but I wonder how many of the resorts offer free shuttle services into the centro areas or shopping districts for their guests.

    2. We get a flat percentage (usually around 10%) commission on the reservation…regardless if all-inclusive or not. The prices for all-inclusive packages and European plans tend to run about the same cost which is why most do all-inclusive. Makes since…why pay the same price and still have to pay for your food and drinks?
      No resort offers free shuttle service because the bus/taxi union won’t allow it.

    3. We get a flat percentage (usually around 10%) commission on the reservation…regardless if all-inclusive or not. The prices for all-inclusive packages and European plans tend to run about the same cost which is why most do all-inclusive. Makes since…why pay the same price and still have to pay for your food and drinks?
      No resort offers free shuttle service because the bus/taxi union won’t allow it.

    4. Good information :) I also wasn’t aware that all-inclusive and standard hotels were both competitively priced. Thank you so much for the information! We are writing an article now on the impact of all-inclusive on our economy, we would like to quote you (and credit you), if that is OK.

    5. Good information :) I also wasn’t aware that all-inclusive and standard hotels were both competitively priced. Thank you so much for the information! We are writing an article now on the impact of all-inclusive on our economy, we would like to quote you (and credit you), if that is OK.

    6. What’s a “travel agent”? Only kidding. The last agent I used was probably in the 90s. Not everyone books via agents. Not everyone gets packages.

      When we book our hotels, even after we do so we watch prices like a hawk and have saved thousands of dollars by canceling and rebooking numerous times. Unfortunately the pricing fluctuates much the same as the airline prices.

    7. @Mike. Straight up on the Money. Thats the problem in part. Also Vallarta lost a lot of its charm and attraction when they screwed the Malecon up and put in all the South Beach Miami style clubs. People come to Mexico to see and experience Mexico, not something you can find for a lot less money in the states or Hawaii.

  8. I agree with Jeff. They aggressive sales pitch is a turn off and when you ask how much something is the starting price is often way too high and people just don’t want to barter anymore. A successful model for tourists is the Talaquepaque store. They have merchandise nicely displayed. You can shop in peace and prices are fair and marked. Also many tourists have visited Mexico before and alot of the items for sale are dated…they need to update the selection. I realize that alot of the items come from GDJ or DF but I have been coming to PV for 30 years and alot of it is still the same.

  9. Maybe because a bunch of those businesses do not price tag their wares, and when we, locals have visitors, we take them to the Marina, the Malecon and when we see that business practice, we know that the shop is playing the “your profile, your price” game, and we consider it disrespectful. Also, no promotions, no advertising, some businesses pay a fortune to the cruise ship industry yet little or none local advertisement, coupons, discounts, etc. And then, it seems that a lot of the shops sell the same things from Tonala and knowing how diverse Mexican arts and crafts are in all the States, and that the Tonala items do not really reflect Puerto Vallarta and sometimes not even Jalisco, and most of the cheap Vallarta souvenirs are plastic, made in China. And the taxi drivers have taken over the side streets leading to the Malecon with total impunity.

  10. If owners/workers would stop jumping out of their shops saying “buy buy buy, one dollar” every time a “tourist” walks past, I am sure they’d sell more. I get so annoyed with that that I do not even look at their stuff any more. I surely do not want to be bullied in to buying anything but that is their sales strategy!

  11. In the last year alone prices for some things have risen as high as 30%.. hotels went up in price, taxis, and restaurant prices have all gone up maybe this why tourists have not opened their wallets

  12. Alex

    Maybe because a bunch of those businesses do not price tag their wares, and when we, locals have visitors, we take them to the Marina, the Malecon and when we see that business practice, we know that the shop is playing the “your profile, your price” game, and we consider it disrespectful. Also, no promotions, no advertising, some businesses pay a fortune to the cruise ship industry yet little or none local advertisement, coupons, discounts, etc. And then, it seems that a lot of the shops sell the same things from Tonala and knowing how diverse Mexican arts and crafts are in all the States, and that the Tonala items do not really reflect Puerto Vallarta and sometimes not even Jalisco, and most of the cheap Vallarta souvenirs are plastic, made in China. And the taxi drivers have taken over the side streets leading to the Malecon with total impunity.

    1. And where will those tens of thousands of employees work? We go to PV every year and only stay at smaller AIs. Only because of the alcohol and pool snacks. We eat out every night, and often eat breakfast and lunch out as well. And we know a LOT of people who do the same.

    1. The Puerto Vallarta Airport Management. The Hotel Association. Worldwide Travel Agency Network. And a whole host of organizations that are in the tourism business release REAL numbers every single month. I am sorry your business is suffering but all you have done is complained about how your business is suffering and when someone makes a recommendation you complain more and say it won’t work so you won’t bother trying. So you have chosen to suffer, that is your business and investment.

    2. JRinPV

      They are probably just counting airplane seats and cruise ship passengers, who are herded to the Cruise Lines’, fee paying, stores and restaurants.

  13. I think that it has to do with so many all inclusive’s are telling people to not leave there resorts. And now that it has been going on for a few years so many places have closed and it is truly sad.


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