How Cheap is Mexico – Really?

Travel prices in Mexico are cheap in the interior

Way back in 2005 I wrote a post about how Mexico wasn’t a featured country in my book The World’s Cheapest Destinations, but it was still quite a bargain. Now 12 years later, that post has still been getting traffic every day, so I’m updating it now for the late ’10s.

Back then I owned a little beach house on the Gulf Coast near Merida that we put $45K into and used for years as our getaway vacation home. When we sold it a few years ago, we basically broke even. It’s still dirt cheap to buy a house around there. Later we bought a much bigger four-bedroom house with a view in Guanajuato for $85K. It’s hard to overstate how much lower real estate prices (and taxes) have on other prices too. Combine that with relatively low wages, and it means you will find quite an arbitrage opportunity if you’re coming from a wealthier country with dollars or euros.

You have to go to the right places, however, the areas where there aren’t so many people like you that the system has gotten out of whack.

Resort Mexico vs. the Real Mexico for Cheap Travel

Many short-jaunt tourists come back from a vacation in Mexico saying that the country isn’t really all that cheap. In a way, they’re right, but it all depends on where you go and which Mexico you are seeing.

torta stand in interior Mexico where prices are cheap

A stuffed Mexican sub for less than $2.

If you spend all your time in places that cater to tourists from Canada, the US, and Europe, you will pay prices that are meant for…well, people from Canada, the US, and Europe. It’s pure supply and demand: if the resorts, excursion companies, and restaurant owners in those areas can get planeloads of people to pay prices close to what they would pay at home, that’s going to be the price that is charged. So if you go to a resort in Cabo San Lucas, Puerto Vallarta, or Cancun, you won’t save much over what you would pay to go on vacation at home. You’ll just have a higher staff to guest ratio and good booze flowing freely from the all-inclusive bar.

The only way to really get a good room discount at a Mexican tourist resort is to buy a discounted package deal that includes airfare, or get seasonally discounted package or room from the likes of CheapCaribbean.com. You can then shave your costs significantly more by taking local transportation instead of expensive tours and by eating at restaurants where the locals eat instead of where the tourists eat if the package is not all-inclusive. (As a bonus, the food will be more interesting too.)

Guanajuato Mexico is much cheaper than resort areas

If you get away from the resort areas, however, it’s a whole different story. This Mexico, away from the beaches, is far more reasonable and naturally more authentic. In areas such as Merida, Guanajuanto, and Oaxaca, it’s quite easy to find a basic hotel room with air-con for US$25 a night, or an interesting inn with lots of local color for less than $60. There are AirBnB rentals in this range too. I have personally found places to stay in this range all over the country when traveling with my family, from San Cristobal de las Casas to Puerto Escondido to Real de Catorce to Guadalajara.

At the current exchange rate of 19 to the dollar, you can easily find cheaper hotel rates than when I wrote the original rundown in 2005. Throughout the interior it’s around $12-25 for a budget place (private room with bath, not a hostel bed.) There are loads of choices if your budget is $25-$60 for a mid-range hotel. It’s frequently $40-$90 for the equivalent of a 4-star hotel. Here’s a snapshot of a few deals in Puebla from Trivago. We stayed at that first one. It’s a gorgeous hotel.

cheap hotel prices in interior Mexico

Compared to backpacker favorites in Latin America such as Guatemala, Bolivia, and Ecuador, this may not be a screaming bargain at the budget level, but it is certainly quite a deal for mid-range travelers. The Mexican peso/dollar exchange rate has been declining for years now and it’s going to take a lot of fundamental changes to reverse that trend.

Daily Travel Costs in Mexico

Food, drinks, and transportation are also good values. I’ve found most tourist restaurants and seafood restaurants to be 25% to 60% less than a comparable place would cost in the US for a similar-sized city. At typical neighborhood restaurants and market stalls, however, you can get a good-sized filling lunch for 30 to 50 pesos-less than $3. You can fill up on snack plates of tostadas, tacos, gorditas, or panuchos for even less. (If you’re in Guanajuato City, check out this Guanajuato Tour focused on street food that I started years ago.) For food, you can get a great value as either a budget traveler or someone willing to splurge.

market stall in Cuetzalan, Puebla state of Mexico, where vegetables are less than a dollar a kiloIf you shop locally and cook yourself, prices are reasonable, especially if you stick to local goods and what’s in season. For a buck you can get a whole kilo of oranges, two kilos of seasonal vegetables, a dozen eggs, a kilo of fresh tortillas, a half kilo of avocados, or a half kilo of local cheese. (One kilo equals 2.2 US pounds.) Pork chops are four dollars a kilo and they practically pay you to carry the cilantro away: less than 20 cents per bunch.

Beers are generally around $2 – $2.50 in a bar or restaurant, $3 – $4 a six-pack in a store. (And that’s for good beer, not watery swill. Craft beers are more like a buck a bottle or more.) U.S. demand has driven up tequila prices, but you can still get a 100% blue agave bottle  of tequila for less than $10. Rum can be even cheaper.

Buses that travel from city to city aren’t dirt cheap unless it’s the slow local bus, but the express buses are quite comfortable and are definitely a good value. They have ample legroom, air conditioning, and even bathrooms and refreshments at the top end. A first class bus will be $20 to $40 for a trip of three to six hours—with lots of legroom and Wi-Fi.

If you are a backpacker on a bare bones budget, Mexico is not the best choice in the Americas. Offsetting this somewhat is the fact that flights are often cheap. (Check prices from your city here.) I have gotten a one-way flight from Nashville and Tampa to Cancun for under $200, taxes included, and have gone all the way to Mexico City round-trip for $379. In cities served by a Mexican budget airline, it can be even less.

So if money is really tight, hop a cheap flight to Mexico and go overland to Guatemala or fly directly to there or further south. If you are not squeezing your pennies, however, the country offers plenty of deals. Get out of the resort areas and go exploring and you’ll be surprised at how far your money can go.

Comments
  1. Wade K.

    Spent three months in Mexico this year. One month in Valladolid, Yucatan, then two in Guadalajara. Glad I did it but had issues. I was sick almost half the time I was there. My system didn’t handle the local bacteria well, especially in Valladolid. I did feel I was getting better handling it by the end, but lost 35 lbs in three months. Something people should be aware of. On the other hand was in San Miguel for 9 days in 2013 and had no issues. Actually found a private room with bath in an independent from main house building, on property of a doctor in a Guadalajara suburb, for $120 a month. Included utilities and wifi but no a.c. which is fine with Guadalajara’s climate if you use a fan. When I first arrived the Peso had dropped from about 22 to the Dollar to just under 20. By the time I left it was about $17.75 to the Dollar, now back over 19. On a fixed income you do notice the drop, but overall still very affordable. I highly recommend having a car if you go to either of the places I did. Valladolid is very walkable except it’s very hot and humid. Everyone comes out after dark when the temps are much more tolerable. It’s like a small New York at night, and I found the people mostly friendly. Guadalajara is huge, and city busses are packed. I mean sardine packed. To get the most out of the town you’ll want a car. Or spend hours, often standing, getting from one part of the city to another. All in all glad I went, and would have gone to Guanajuato if that great deal hadn’t popped up on Craigslist. And might still be there if I had gone to Guanajuato.

    • Tim Leffel

      Yeah, Guadalajara is a pain for transportation. There’s a subway, but it doesn’t go anywhere a tourist would want to go. Vallodolid is really small though. We got to Ek Balam on rented bicycles and walked the rest of the time. Not in the middle of the day though! That’s siesta time.

  2. Anthony

    That is about what I found Wade in Mexico City. I spent a few days there on two different occasions in 2015 and 2016.

    Exchange was 22:1 in 2015, I think 20:1 in 2016. Sao Paulo, BR which was were I was going in 2016 was 14:1 and that was high compared to what it had been during the boom years in the late 2000’s.

    Off the tourist trail it is cheaper by quite a bit especially housing.

    As for needing a car, after spending time in LA for a much as I have, YES YOU NEED A CAR. Public transport is okay when your in a large city like MX City but otherwise like LA you stand around way too much and it takes hours to cross the city.

    I walked three different times from Centro Sao Paulo back to the hostel I was staying in Pinheiros about 5-6 miles one way. I was short on money otherwise I could have use Uber but I was trying to save what little money I had at that time.

    Anyway Latin America is still a bargain, Central America even more so and it’s not that expensive to get down there. I am currently trying to get my parents to relocate to at least Mexico where they can afford live-in care. In fact they could live at a higher level (private secure community), afford everything they have now and still have money leftover.

  3. Jenna

    It totally depends on whete you are. There’s no reason to have a car in most colonial Mexican cities. If you don’t like the humidity, take a cab. It will often be less than five bucks. In Mexico City the metro is super convenient.

    • Wade K.

      Good point about cabs. Valladolid cabs were incredibly cheap. But Guadalajara is a huge city and it depends where you are as to whether cabs are convenient. Mexicans with means have cars and that opens up exploring the region to places like nearby Lake Chapala. When we were in San Miguel local buses were convenient and cheap if you lived a ways from the Centro.

  4. david

    Great post! worth the reading

  5. Dave Harmon

    Hey Tim, I’m enjoying your posts about Mexico a lot. I’m about to buy a house in Guanajuato after 20 years of visiting and I need a recommendation for an architect or contractor to do renovations. Can you offer any suggestions?
    Thanks
    Dave

  6. Gary

    I think I posted in a previous article that my wife and I have been wintering in Mérida the past 3 years. Last winter, we did a spreadsheet covering EVERYTHING we spent from departure to return. Our total for 2+ months was 5400 USD. That also included week long jaunts to Campeche and Sísal, as well. Hell, that’s about 2 grand less than spending time home in frozen Upstate NY. Lastly, we didn’t scrimp on accommodations (a fine 2 bedroom apt. in Centro), meals, transport, and most importantly, libations. See you there in January!

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