Playa del Carmen Hotels Face Rate Cuts Amid Vacation Rental Boom

Playa del Carmen, Quintana Roo — Hoteliers in Playa del Carmen are grappling with significant declines in average room rates despite maintaining occupancy levels above 85%, a situation they attribute to an oversupply of lodging options and the rapid growth of vacation rentals.

Offner Arjona, president of the Playa del Carmen Small Hotels Association, said February saw positive visitor numbers with occupancy rates approaching 90%, but acknowledged profitability hasn’t kept pace with a decade ago.

“February is historically a good month. We’re above 85% and very close to 90% occupancy, but there has been a decrease in the average rate,” Arjona stated.

According to the association leader, average rates during high season were around $150 per night approximately 10 years ago, while currently they range between $55 and $60.

“What we had 10 years ago as an average rate in February was $150 per night and today we’re at $55 or $60. That’s the reality,” he said.

The hotel executive attributed the decline to multiple factors including international competition, the post-pandemic landscape, and particularly the expansion of vacation rentals.

According to Municipal Treasury figures, Playa del Carmen has approximately 13,000 residential units designated for vacation rentals.

In contrast, the association represents just over 3,000 rooms, and even including non-affiliated hotels, the total estimated formal hotel inventory doesn’t exceed 7,000 to 8,000 rooms.

“We need equal conditions. We operate with all permits and pay taxes, while there are other businesses that still don’t comply with all requirements,” Arjona noted.

The association president added that vacation rental regulation has been under discussion for over a decade and said faster progress is needed to establish a level playing field in the lodging market.

Meanwhile, the sector continues addressing sargassum seaweed influx in coordination with municipal, state, and federal authorities. Arjona explained that cleanup strategies depend heavily on weather factors, including recent southern winds that complicated both the arrival and collection of the algae.

“It’s comprehensive work and we depend a lot on the weather. Southern winds complicate not only the arrival of sargassum but also its collection,” he indicated.

Despite the challenges, the small hotels president maintained that the destination retains its appeal and said the key will be strengthening competitiveness to maintain visitor preference.

“We have to focus on caring for and improving our destination. That will make tourists continue preferring us,” he concluded.