The Impact of the Mexico City Tourism Law and its Recent Reform: Analysis and Considerations for the Real Estate and Tourism Sector.



Mexico City is one of the world's most attractive destinations for tourism, with a cultural, architectural and gastronomic heritage that cultural, architectural and gastronomic heritage that attracts millions of visitors annually. With the growth of tourism and the expansion of digital platforms such as Airbnb, the Mexico City Government has seen the need to modernize its Tourism Law to more effectively regulate temporary stays, promoting sustainable and inclusive tourism without affecting local communities.

 

In this article we will briefly analyze the current Tourism Law in relation to its last reform of April 4, 2024, as well as the points that we consider positive and negative in relation to limiting the number of nights that an owner can rent his property.

 

1. Mexico City Tourism Law.

 

Mexico City's Tourism Law establishes the normative framework for the regulation and promotion of tourism activities in the capital city. Enacted to align local tourism policies with the principles of sustainable economic development, the law promotes a balance between tourism, the protection of cultural and environmental heritage, and the rights of host communities.

 

Among its main objectives, the following stand out:


- Regulation of tourism in its different modalities: The law classifies tourism into categories such as Cultural Tourism, Gastronomic, Religious, and more recently, LGBTTTIQ+ Tourism, to ensure that tourism activities are safe and sustainable.

 

- Promotion of Alternative and Social Tourism: The law establishes the promotion of accessible tourism for people with disabilities, senior citizens and other vulnerable groups.

 

- Protection of Sustainable Tourism Development Zones: The law seeks to ensure that tourism activities in areas of environmental value are carried out under strict conservation measures.

 

This law reflects a significant effort by the local government to position Mexico City as a competitive tourist destination, fostering development that benefits both tourists and the city's inhabitants.

 

2. Recent Reform to the Mexico City Tourism Law (2024)

 

On April 4, 2024, an important reform to the Tourism Law was enacted, which introduces key changes to modernize the regulation in response to the evolution of the digital tourism market. The Eventual Tourist Stay, facilitated by platforms such as Airbnb, has been one of the most discussed points in the reform.

 

Key Points of the Reform:

 

- Registry of Hosts and Technological Platforms: The reform requires both hosts and digital platforms to be registered in registries administered by the Ministry of Tourism. Hosts must provide details about the property, its tax status and the security conditions of the place.

 

- Regulation of the Eventual Tourist Stay: The new regulatory framework establishes clear rules for those who offer their properties to tourists, regulating aspects such as safety, respect for neighbors and compliance with tax obligations.

 

- Sustainable Tourism Development Zones: The provisions on specific areas where tourism is a priority are strengthened, but with a focus on environmental conservation.

 

- Lodging Tax: The reform imposes greater fiscal responsibilities on hosts and platforms, requiring that both parties comply with the payment of lodging tax, and that the platforms act as jointly and severally liable in case of non-compliance by the hosts.

 

One of the most controversial aspects of the reform is the limitation on the number of nights that hosts may rent their properties. Although no exact number is established in the law, the regulation raises the possibility of imposing restrictions in certain cases, particularly for those who own multiple properties intended for tourist rentals.

 

3. Pros and Cons of Limiting the Number of Nights on Tourist Stays.

 

Pros of the Limitation:

 

1. Protection of access to housing: Limiting the number of nights for renting properties as tourist stays can help prevent owners from transforming residential properties into tourist-only accommodations. This protects access to housing for permanent residents, especially in areas where rental prices have increased due to high tourist demand.

 

2. Preservation of the social and community fabric: Local communities can be negatively affected by the constant turnover of tourists in properties originally intended for permanent housing. Limiting the number of nights allows communities to maintain their residential character, avoiding gentrification and forced displacement of long-term residents.

 

3. Regulation of environmental and urban impact: In areas with high tourist density, urban infrastructure and public services can become overburdened. By imposing limits on the number of nights, authorities can better manage tourist flows and minimize the impact on local resources such as water, electricity and waste collection.

 

Cons of the Limitation:

 

1. Negative impact on small landlord income: For many property owners, temporary property rentals represent an important source of additional income. Limiting the number of nights may significantly reduce their economic opportunities, affecting those who depend on tourism to maintain their properties or improve their quality of life.

 

2. Disincentive for tourism: Limiting nights may reduce the supply of tourist accommodations, especially in times of high demand, which could deter some tourists from visiting the city or generate an increase in the prices of available stays. This could affect Mexico City's competitiveness as a tourist destination compared to other cities where similar restrictions do not exist.

 

3. Implementation and control complications: Controlling the exact number of nights that each property is rented can be a major logistical challenge for authorities. It requires a system of constant monitoring and supervision, which could generate high administrative costs and leave room for non-compliance or informality.

 

Finally, with what has been said so far, we can conclude that Mexico City's Tourism Law and its recent reform represent significant advances to regulate and modernize tourism in the capital, especially in a context where digital platforms have transformed the way in which tourist accommodation is consumed. While limiting the number of nights for tourist stays has obvious benefits in terms of social and urban protection, it also presents challenges that may affect small property owners and the city's tourism offer.