Thursday night here in Mexico City started out rough. We were supposed to be going to a free salsa class on the rooftop overlooking the national square, but the class got canceled. A group decided to go out on the town, so I thought, “why not?” We started walking several blocks south and walked into the Regina bar, which is easily has the sketchiest entrance I’ve ever been to. Imagine a NYC multilevel building lit up on the first floor with graffiti all over the stairway. I was a little weirded out at first but everyone was going in so again I thought, “why not?” We walked to the top of the building, and the bar was beautiful. There were paintings covering the walls and a group of friendly locals who started speaking to us about what to do in Mexico. When the bar closed down after getting some beer made from corn, they walked down the stairs with us. One of the local Mexicans gave me some great advice I wanted to share with you. He looked me dead in the eye and said in English, “Don’t go to the Caribbean and spend dollars, come to Mexico and spend pesos!” Let’s think about how true those words really are.
The All Inclusive CNBC Vacation
When I was working in my finance job, the TVs surrounding the trading floor would broadcast CNBC nonstop all day. This happens at almost any financial institution with Bloomberg terminals and millions of dollars in trading. The financial professionals making decisions in the market want to be alerted if there are any big news events. In other words, there is a large captive audience prone to luxury spending staring at glowing screens all day. Many are desperate for a distraction from their job or something to look forward to while working 10 hour days without lunch. Hence, the most popular ad by far on CNBC during the day seemed to be for all inclusive vacations to resorts in the Caribbean. I can almost recite the 1-800-SANDALS ad to you by heart.
At these kind of places, you spend the $1000 airfare to get both you and your partner down there, and then maybe you’ll drop another $1000 to $2000 on the “all inclusive” experience. You can drink all you want, eat all you want, and lay on a beach all you want. You’ll have access to large pools, helpful staff, and won’t have to lift a finger. Of course, your bill will be in US dollars.
These vacations might be nice to go to when it’s 10 degrees F in the Northeast and you’re dead tired from your job, but they’re really expensive. These facilities charge you way more than what you’d pay anywhere else in Latin America. Furthermore, it’s the least original vacation of all time. It is probably a fun time if you enjoy the company of your partner, but in terms of experiencing anything life changing, it won’t happen at one of these mega resorts.
The “Authentic” Cruise Ship Excursion
Another dollar denominated vacation is the giant cruise ship excursion in tropical ports. Everyone is dressed in native clothes, serving fresh coconuts, and giving out shots of authentic Bacardi Rum brewed right there on the island. In fact, the cruise ship companies carefully control the environments where they dock. The locals you’ll meet are similar to the workers at Disney World. They are there to create an experience.
You will never taste anything close to authentic Latin culture by stepping off the cruise ship. That’s fine sometimes as cruises can be a fun adventure. However, your trip will be very expensive and you’ll have nothing original to share about your vacation. The cruise ship companies have literally built small cities to cater to their guests. All the prices will be inflated and it might be hard to tell the difference between the different ports.
Who Are The Buyers Setting the Price You Pay?
To figure out what price you will pay on vacation, look at the customer next to you. One thing I’ve noticed while traveling around Mexico City is that I’m not competing against other Americans when I spend my money. Instead, the main buyer at the places I’ve been eating, shopping, sightseeing, etc. is Mexican middle class workers, who are far less wealthy than middle class Americans. Because of this, I pay less for everything.
The picture above was taken on top of the Temple of the Moon at Teotihuacan. I paid less than $4 for an unforgettable experience looking at the giant Mesoamerican pyramids that rank in the top 3 largest in the world. If I had gone to a place like this where tourists pack the grounds, that price would have been way higher.
Other examples of the value you get for your money when the primary customer is not another American are fancy bakeries, smoothie joints, and high end restaurants. At almost every one of these places, we were the only white people there. Dinner with a fancy croissant sandwich and dessert was $1.50, a 1 liter smoothie made from fresh watermelon, papaya, and pineapple was about $3, and the most expensive meal we’ve had here in Mexico cost us $3.50, and it had four courses.
Go To Where the Tourists Aren’t and Spend Pesos
One of the best parts of traveling is coming back and having unique stories. You gain more prospective about life from meeting people and seeing places other people do not. When you learn how blessed you are to live in a rich country like America by going to places with lots of poor people, it makes you grateful. In going to these off-the-beaten-path places like Mexico instead of the Caribbean, you get more for your dollar. You also support their local economy and provide jobs. As I write this, the peso has hit a new low against the dollar at 18 to 1. The purchasing power you’d have here in Mexico is bordering on the absurd. If you come, you’ll discover what I’m talking about.
That Mexican guy we met at the bar was giving us the best advice anyone could give on traveling in Latin America. Don’t go to the Caribbean and spend dollars, come to Mexico and spend pesos! You’ll have more fun for way less money. Two people can go on vacation to Latin America. One might spend $1000 for two months of travel, while the other might spend $5000 in a weekend. The person who spent the $1000 didn’t fall for the dollar denominated vacations and had to work for a far shorted time to afford a lifestyle of travel. If you’re thinking about going to Latin America anytime soon, hurry up and convert some of your dollars to their local currency and go spend it. These exchange rates might not be seen for another decade.
Where is your favorite value location to travel in Latin America? Is there any way to save lots of money on one of these Caribbean dollar denominated vacations? Comment below!