Baja California Sur introduces EMBRACE IT digital tourism tax to fund conservation and community development

Baja California Sur has officially implemented a mandatory digital tourism tax, known as EMBRACE IT, aimed at strengthening local infrastructure, preserving ecosystems, and enhancing cultural heritage in the Mexican state’s rapidly growing tourism sector. The initiative, launched on June 30, 2025, requires all foreign visitors staying in the region for more than 24 hours to pay 470 Mexican pesos (approximately $25 USD) through the digital platform Travelkore. This new tax strategy is central to the state’s broader Tourism Development Strategy, targeting both sustainability and responsible growth.

As tourism to destinations such as Cabo San Lucas, La Paz, and Loreto continues to rise, the Government of Baja California Sur is seeking to establish long-term funding mechanisms that reduce the environmental burden while increasing socio-economic returns. The EMBRACE IT program is enshrined in Article 129 Bis of the State Finance Law and enforced through collaborative partnerships with Tourist Tax México S.A. de C.V. (TTMX) and Travelkore, a global SaaS provider for tourist tax collection.

Why did Baja California Sur implement a digital tourist tax for foreign visitors staying over 24 hours?

The EMBRACE IT tax responds to mounting pressures on the natural and urban infrastructure of Baja California Sur, which has seen double-digit tourism growth since the early 2020s. Los Cabos International Airport and La Paz International Airport have experienced record foreign arrivals over the past five years, placing strain on fragile coastal ecosystems, water reserves, and public services in adjacent communities.

By setting the tax at 470 MXN, the state government aims to generate a sustainable and predictable revenue stream earmarked for three primary goals: environmental protection, infrastructure improvements, and socio-cultural development. The state’s Finance Minister, Bertha Montaño Cota, noted that the initiative is part of a broader vision to deliver “an unforgettable tourism experience while protecting ecosystems and supporting the well-being of local communities.”

Historically, similar tourism taxes have been piloted in countries like Costa Rica, Bhutan, and select European cities, often met with mixed sentiment. However, institutional investors monitoring Latin American sustainable development policy regard EMBRACE IT as an example of fiscal modernization in tourist-heavy jurisdictions. Analysts suggest the success of the initiative will hinge on payment compliance, enforcement at entry/exit points, and visible reinvestment into community-facing infrastructure.

How will funds from the EMBRACE IT tax be used across tourism, environment, and community projects?

According to the General Rules outlined in the legislation, revenue collected through EMBRACE IT will be specifically allocated to:

Environmental protection efforts, including marine conservation zones, waste management reforms, and sustainable coastal development programs.  Tourism infrastructure improvements such as airport upgrades, road connectivity, and sanitation systems in high-traffic corridors. Social and cultural projects, including heritage preservation, community-based tourism cooperatives, and vocational training for local populations.

Importantly, the funds will not be absorbed into the general state treasury but will be channeled through earmarked development budgets managed in collaboration with local stakeholders and implementation partners. This includes regional NGOs, municipal authorities, and tourism boards.

Experts in sustainable tourism finance suggest that if implemented transparently, the program could serve as a replicable model for other ecologically sensitive tourism hubs. The use of a digital-only payment modality via Travelkore enhances traceability and reduces leakage or misappropriation.

What are the key digital compliance measures being implemented through the Travelkore platform?

A critical component of the EMBRACE IT rollout is its exclusive reliance on digital payment infrastructure. Foreign visitors are mandated to complete payment via the official website https://embrace.bcs.gob.mx before entering or exiting the state at designated land or air checkpoints. Valid proof of payment must be presented at airports in Los Cabos (SJD), Cabo San Lucas (CSL), La Paz (LAP), and Loreto (LTO).

Travelkore, a SaaS-based technology platform specializing in tourist tax compliance, enables real-time verification, multilingual user support, and automated issuance of receipts. Travelers who fail to show proof of payment may face entry or exit delays or be subject to fines.

Tourist Tax México S.A. de C.V. (TTMX) is the local partner responsible for on-the-ground collection oversight and digital operations management. The two firms have collaborated closely to ensure smooth integration with immigration and customs authorities in the region.

This digital-first approach aligns with global best practices, particularly in post-pandemic travel compliance, where contactless systems are now the norm. Institutional observers note that such tech-integrated taxation frameworks could eventually be harmonized across Mexico’s tourism-heavy states, creating inter-operability across destinations like Quintana Roo, Jalisco, and Oaxaca.

How have travelers, institutions, and tourism investors responded to the EMBRACE IT tax initiative so far?

While the EMBRACE IT tax has been formally in place only since June 30, early indicators suggest a mixed but generally favorable reception. Travel platforms have updated guidance to include the mandatory fee, and tourism operators in Baja California Sur have incorporated the cost into booking and itinerary disclosures.

Some travelers have expressed confusion or resistance to the fee online, particularly around its mandatory nature and the need for pre-travel digital payment. However, as awareness improves, industry observers expect compliance rates to rise significantly by Q4 2025.

Institutional investors monitoring ESG metrics in tourism portfolios view the tax as a long-term net positive. It signals fiscal responsibility, community engagement, and climate sensitivity—factors that increasingly influence international capital allocation toward destination development projects. Public-private partnerships in regions like Los Cabos may also benefit from the visibility and credibility the program adds to the state’s policy framework.

Analysts expect that EMBRACE IT will become a case study in Latin American tourism taxation, particularly if Baja California Sur reports tangible outcomes—such as reduced waste in marine reserves, improved visitor infrastructure, or measurable increases in community income from tourism-linked grants—by mid-2026.

What are the future plans and expected outcomes from the EMBRACE IT program in Baja California Sur?

Looking ahead, the Baja California Sur government aims to continuously evolve the EMBRACE IT initiative through regular legislative updates and stakeholder feedback. Plans are underway to integrate the digital payment platform with airline booking systems, cruise lines, and international travel aggregators to improve compliance and user experience.

Officials are also considering tiered pricing models based on length of stay or travel purpose, with potential exemptions or discounted rates for humanitarian visits, student exchanges, or medical tourism. Data from the digital platform will help guide policy refinements and revenue forecasting.

By 2026, the state hopes to present its first annual EMBRACE IT Impact Report, detailing how funds have been distributed and what outcomes have been achieved. This transparency, coupled with third-party audits and community participation mechanisms, is expected to build credibility and encourage reinvestment in local tourism clusters.

In the long run, analysts believe that the EMBRACE IT program could be a cornerstone of Baja California Sur’s transition toward a regenerative tourism model—where economic gain is balanced with ecosystem health, local empowerment, and cultural vitality. The initiative could serve as a roadmap for peer regions globally seeking to future-proof their tourism economies amid rising ecological and infrastructural stress.