Mexico’s Battered Economy A Boon For American Tourists

Two years ago, one peso was worth 30 American cents. Today it is the equivalent of about 13 cents. As a result, Mexico has become a moveable feast of bargains. Hotels, taxis, restaurants, movies, picnic food, handicrafts and many other vacation accouterments now cost far less than in the United States.

“I had no idea the values would be so dramatic,” said Vincent Davis, an engineering student from California who came south this year planning to travel for three months and stayed for six because rambling around Mexico has turned out to be so cheap.

The devaluation of the Mexican peso, which began with a crash in December 1994, has continued as an intermittent slide, most recently by losing 3 percent of its value against the dollar last month. Inflation has raised consumer prices here during 1995 and 1996 by about 75 percent, making daily life for the average Mexican worker painfully austere. But for travelers paying in dollars, the effects of the advantageous exchange rate have far outstripped inflation.

“Hotels are a real bargain now,” said H.H. Felsted, the editor of a travel newsletter, Mexican Meandering, published in Austin, Texas. Last month he and his wife traveled to San Antonio, where they stayed in a Holiday Inn for $89 a night. In contrast, they later went to the northern Mexico city of Monterrey, where they stayed in the Hotel Rio, a tidy, modern establishment with a swimming pool. There the Felsteds paid a weekend rate of $45 a night, although the Hotel Rio’s rates rise to $57 on weeknights.

Prices of some luxury hotels are also lower now than two years ago, even though most have always priced their rooms in dollars. A standard room at the Hotel Camino Real in Mexico City’s Polanco district cost $180 before the 1994 devaluation. Today the same room goes for $160.

Food prices in Mexico will seem extremely reasonable to Americans. A meal in most restaurants costs $10 or less. A sumptuous feast for two, beginning with Herradura tequila and continuing with Chilean wine and chicken mole at the Asador Vasco, on a balcony overlooking the colonial square in Oaxaca, can be had for $35.

Ground transportation is also a bargain. Two years ago a taxi ride from the international airport to downtown Mexico City cost $16. Today it has dropped to $8.50. The Mexico City subway costs one peso, or 13 cents, for an unlimited ride. That is up from 40 centavos, or 8 cents, a year ago.

Flights in Mexico, tied to fuel and to international aircraft-leasing costs, have grown costlier. Round-trip air fare between Mexico City and Guadalajara on Mexicana Airlines, $180 before the 1994 devaluation, now costs $197. But for intercity travel, Mexico’s first-class buses are cheap and clean.