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How Cheap is Mexico – Really?

Travel prices in Mexico are cheap in the interior

How cheap is Mexico for budget travelers? Well, not in the bargain basement, but it’s one of the best values in the world. Plus you can fly there for a reasonable price and stick around for six months if you want.

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 the whole country of Mexico is cheaper in 2021 than it was then thanks to exchange rate differences. It’s now in the 5th edition of that book.

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 in 2014, we basically broke even. It’s still dirt cheap to buy a house around there. Eventually, 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.

The answer to “How cheap is Mexico?” depends a lot though on which Mexico. You have to go to the right places, to get a real bargain, the areas where there aren’t so many free-spending foreigners 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 if you went for that option.

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 one of the online agencies like Expedia. 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.)

How cheap is Mexico travel? A bargain in the interior.

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 apartment 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 HotelsCombined. We stayed at that first one. It’s a gorgeous 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. So in a sense the question of “How cheap is Mexico?” depends on your historical perspective and what you’re comparing it to. 

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 $12. 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.

How cheap is Mexico? Well it depends a bit on how you travel and where you go, but 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.

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Thursday 11th of February 2021

In Mexico City you can find AirBnbs with your own private room for as cheap as $5 to $8 per day with the monthly and weekly discount. Notably there are a few in the areas around Centro and also near the airport. I wouldn't advise staying at the ones near the airport unless you have a flight on the next morning, but the ones around Centro are within walking distance from all the tourist spot. There is a guy named Luis on Airbnb who owns a few of these properties around Centro, he seems to be quite wealthy, I have stayed at his place before and it was fine. Of course you won't get any air-conditioner for that price but Mexico City gets quite chilly at night being so high up so you probably won't need it. Otherwise place is fine and clean, you only get basic furniture but for the price it's well more than one could ask. If you're on a budget I suggest staying at those, there are several others than the ones that guy owns too.

Tim Leffel

Monday 15th of February 2021

Good to hear. Thanks for the info!


Saturday 17th of August 2019

Can I live in central or south America on $400 a month? I'm an impoverished Brit.

Tim Leffel

Monday 19th of August 2019

Not easy, but it could be done if you live and eat like a local outside of the cities in the cheapest spots. Not in Mexico though unless there are two of you earning $800 together to share housing.


Thursday 18th of July 2019

Wow! What a great ultimate guide with ALL the necessary details. I’m pinning this so I can find it again later. Puerto Vallarta is on our list of places to visit, thanks!


Tuesday 11th of September 2018

Hi Tim, Do you have any recommended activities in and around Cancun? Tolum and Chichen Itza are close-by, but I'm wondering if you have any insights on interesting activities. Thank you.


Friday 31st of August 2018

Hey Tim, great post. Can you recommend a college/university that can accommodate a parent & teen. I am considering my Masters but will sign up for Spanish classes first. A low budget area but safe clean walkable & public transportation is a must. Tks

Tim Leffel

Monday 3rd of September 2018

Most universities are specialized in certain subject tracks, so it would depend on what you're studying. Most likely the classes will be in Spanish--and not beginner Spanish. This is not my area of expertise though I'm afraid. You'll have to do some deep research.