Why are hotels in some parts of Uruguay so expensive? I hear this a lot. It’s not universal but it’s true to say that in a handful of Uruguay’s most sought-after beaches, hotel and vacation rental prices are significantly more expensive than you might expect, especially when coming from North America or Europe.
During high season tariffs can skyrocket
Why does this happen? It’s simple laws of supply and demand. These resorts are very small and in demand. Demand outstrips supply.
In an exclusive spot like José Ignacio, prices in general are higher than the market average. It’s a tiny peninsula just six blocks long by six blocks wide with a permanent population of 300. During a peak season weekend thousands of visitors will flock to the beach in José Ignacio. So there’s little surprise that a simple mid-century holiday home in this ‘haute hippie hideaway’ can rent for 70,000 USD a week.
The tourism season has historically been very short in Uruguay—stretching in its entirety from Christmas to Easter. As a consequence, many hotels—and restaurants—aim to make a killing over 3-4 months—and then close down entirely for the rest of the year.
It’s not great for customers, nor for job security in the hospitality industry and something here at Guru’Guay we are working to change. However it is the reality on the ground for now.
In addition, costs are high in Uruguay. Labour costs, particularly employment taxes, are high. Utilities are expensive.
Wait, I don’t know anyone who has been to Uruguay. And you’re saying it’s really popular?
If you’re from North America or Europe, you may be asking yourself this. Here’s the deal. Uruguay is particularly popular with our neighbours and has been so in some cases for over a century.
Argentines have been holidaying in Uruguay for over a century. The beaches have much lovelier white powdery sand and warmer water than in Argentina, where the oceanic beaches are much further south.
Brazilians love the safety they feel on holiday in Uruguay. They can swan out in their jewellery, leave stuff on the beach and go for a walk.
In recent years Paraguayans and Chileans have also flocked to Uruguay. Paraguay is landlocked. Chile suffers the same issue with their beaches as Argentina.
Want to get more of this insider knowledge? It’s in the Guru’Guay Guide to Uruguay
So, how to avoid paying top dollar on beach hotels and rentals in Uruguay?
- Avoid peak high season. That’s December 24 to January 5 (or sometimes 10)
- Offer to book directly (so your host avoids paying 12-15% commissions to booking websites) or pay with cash (credit cards charge around 6% to businesses in Uruguay) and enquire if that could get you a discount
- Enquire if staying three or four days or more, especially when travelling outside of peak high season, will get you a more favourable rate. The worst you can be told is no—and maybe you’ll get a nice discount
- Get the best rates by going to the beach during shoulder season i.e. before Christmas and from March onwards (excluding Easter).
In your favour is that foreigners are not charged VAT on hotel stays.
Cover photo by Jimmy Baikovicius