Included below are some comments relevant to the area around Cabo San Lucas and San José del Cabo (jointly referred to as "Cabo," "Los Cabos," or "the Cape"). Over a number of years I have spent a total of about six weeks living in Cabo San Lucas and now spend 2-3 months a year living in La Paz (100 miles northeast), and so am somewhat familiar with the area around Cabo.
I have passed through what seem to be typical phases in my attitude regarding Cabo. When I first visited there I loved the place. But over the years, as development has progressed at a furious rate, I see it in a very different light and only visit when I have guests who have a wish to see Cabo. For those who desire a resortish environment, with activities and entertainment oriented towards the American tourist, Cabo is probably a better location than, for example, Mazatlan.
Cabo San Lucas is in a beautiful setting with lovely beaches, although the quality of the setting is deteriorating with the exponential growth of this town as an "americanized" resort center. Some nice hotels are the Hacienda and the Finisterra (both expensive) - the Hacienda is on the beach on the Gulf side, while the Finisterra straddles the rocky shoulder which terminates the Baja peninsula.
A less expensive hotel in town (not on a beach) is the Mar de Cortez. There are several other smaller inexpensive hotels in the town area. Right on the inner harbor is a new hotel which has ruined the view for many. I assume that it is expensive, although I don't know anyone who has stayed there - the name is "Plaza Las Glorias" - it has no beach access.
Between San Lucas and San José are many other resortish hotels (it would be difficult to reach the town areas except by taxi). In July of '95 I stopped briefly at the Westin Regina Resort Hotel. This is a spectacular piece of architecture in an equally spectacular location. Worth a look if you are passing by - or a stay if this sort of place suits you.
When in Cabo San Lucas, I have enjoyed breakfast at the The Galleon (on the inner harbor). Lunch or dinner at the Las Palmas on the beach is excellent. For that very special dining experience, in a restaurant with priceless menus (i.e., no prices shown on some or all of the menus), try Alfonso's. I was there once when someone else was paying! (Note: In July '95, as I was driving past, it appeared that the name may have been changed, but it remains a restaurant.)
A favorite beach at Cabo San Lucas is "Lover's Beach," located out on the set of rocks stretching to the end of the peninsula. It is most accessible by boat. You should be able to bargain with a panga driver for a ride out there with a pick-up scheduled for a later time (a "panga" is the basic outboard driven boat in that area). Another possibility is to rent a boat (power or sail) and to take it out there yourself. The beach straddles the point of land and lies on both the Pacific side and the Gulf side.
An older and, in my opinion, much nicer town. There are numerous hotels along the beach area about one mile from the town center. I once stayed at the El Presidente and found it quite comfortable. There is an excellent restaurant in town by the name of "Damiana" (a local vine from which a tea is brewed).
The public market is an interesting stop in San José, especially if you have not been in such a market in Mexico (there are much larger and more elaborate markets in the main cities). It is located in a semi-open building some distance from the downtown area.
The Los Cabos Airport (serving both San José and San Lucas) is located about 10 miles north of San José.
A pleasant little town on the Pacific side of the peninsula - home to a small colony of Americans (northern variety). In mid-January, this is the site of a popular Arts Festival.
I have heard that the "motel" in town is a good place to stay. This is also where the "Hotel California" is located - a place made famous by an Eagles song of the same name.
South of "Pescadero" (a few miles south of Todos Santos) are a number of very long, mostly deserted beaches. A great place for a picnic. Watch for dirt roads which seem to head off towards the ocean. The beach at Punta Lobos is where the local fishermen keep their pangas on the beach - it is worth driving out to the beach just to watch the "lancheros" (panga drivers) run their boats up on the beach at full speed in order to get them up as high as possible.
This is a large city (160,000 population) and the capital of the state of Baja California Sur. Generally speaking, La Paz is not a tourist city. There are many hotels varying from resortish to very simple. The tourists who visit La Paz do so, for the most part, for the fishing and diving at the nearby islands.
While La Paz has a lovely waterfront with a beach running along it, the best swimming beaches are north of town and not where the hotels are located - with the exception of the La Concha, located about three miles north of the city center.
The city is quite old (450+ years since the first settlement) and some of the downtown areas are delightful. The "Malecón" is a sidewalk which follows the waterfront for several miles, and offers a wonderful place to walk in the evenings (most evenings have beautiful sunsets in La Paz - due to the clouds which are present most of the year and the fact that you look across the bay to the main peninsula mountains off to the west). On Sunday evenings the Malecón may be jammed with mostly young people participating in the "promenade." Lots of places to eat.
The "loop trip"
San Lucas -> San José -> Los Barriles -> La Paz -> Todos Santos -> San Lucasis an excellent (long) day trip.
Since 1989 an "IVA" tax has been imposed nationally on many goods and services in Mexico. This tax ("impuesto") is currently 10% in Baja California and the border areas (and 15% in mainland Mexico). It is particularly applied to those items and services the tourist is apt to encounter. Be aware that this tax will often be added to the basic price quoted - in a few cases the tax may be built-in to the price. In the grocery store it will not be so evident (most basic food items are not taxed), but when those grocery items are prepared and sold in a restaurant, along comes the 10% tax!. The days of Mexico being a tourist "bargain" are past, although occasional changes in the valuation of the peso may change the situation somewhat.
Note (March 2001):The IVA in Baja California has now been increased to 15%.
The entire Baja peninsula is a desert, and the southern end is in the "dry tropics." One advantage of this is that, except for the cities, the area is sparsely settled. There are no communities up in the mountains polluting the water sources, and hence, the water is good. I don't know of anyone who has had problems with the local water in Baja California - especially at the southern end (further north, there are several places with salty water, e.g., San Quintín and Guerrero Negro). This is unlike the "wet tropics" in mainland Mexico where there are often pollution sources upstream and the water has "bugs" our bodies have trouble dealing with.