In most tourist areas in Mexico, it is acceptable to tip in either pesos or dollars, though pesos are more practical for the person being tipped. If you do tip in dollars, be sure to only tip using notes and not coins as coins cannot be exchanged.
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Tip 15-20% for waiters, depending on service, but make sure a 15% service charge hasn't already been added to the bill. (Although this practice is more common in resorts). It is not expected to tip taxi drivers, but it is always appreciated.
In Mexico, every bellboy, chauffeur/driver, or valet parking person expects a tip of 20-50 pesos. Bartenders, waitresses/waiters, and housekeeping staff expect a tip of 15% of your bill, and housekeepers should be tipped about 50 pesos (or more) per day.
100 Pesos is equivalent to about $5 to $6. This sum may not seem like a big amount, but it can buy tourists one or two meals in Mexico. In the Mayan country, the cheapest cuisine is street food. Tacos can cost as much as 20 Pesos for a basket of four or five tacos.
Cabo taxi drivers accept payments in both USD and Mexican Pesos. However, they often inflate the exchange rate, so paying in USD will be more expensive. If your driver gives excellent service, you can round up your fare to tip them, however, it's not obligatory.
While tipping is a discretionary and optional gesture, at all-inclusive resorts in Mexico, Cuba, Dominican Republic, Jamaica, and others, it is certainly encouraged.
While tipping may not be required at some all-inclusive resorts, many guests prefer to do so. In the event that you would like to tip staff during your all-inclusive vacation, it is important to find out in advance whether staff would even be allowed to accept those tips.
For traveling (even on a backpacker budget), it is perhaps better to consider what 500 pesos (or $25 will buy). That is enough to rent a car for a way (minus non-specified expenses). It is also enough for dormitory accommodation in some of the cheapest hostels in Mexico City for two nights (around $8 per night).
Tipping is both appreciated and expected. You can tip in USD or in pesos, but pesos will be easier for locals to spend. When in doubt, tip the larger value. These suggestions are listed in USD; use the most current peso conversion for the accurate peso tip.
It's up to you how much you tip, but the recommended amount in Mexico is between 10% – 20% (15% is a good standard in tourist areas) of the bill or ticket price.
The short answer is, not exactly. While the water in Los Cabos is very pure, you still need to be careful. The water distribution pipes and other factors can become contaminated. Drinking water directly from the pipe is therefore not encouraged.
The best currency to bring to Mexico is a mix of pesos and US dollars. Use the dollars to pay for tours, entrance fees, accommodation, and travel. For everything else use pesos. It should be relatively simple to get pesos in your own country before you travel.
One thousand good Mexican pesos have the purchasing power of about $50 U.S.A. dollars. You might get a nice dinner for three, or a tankful of gasoline (gasoline is expensive there), or a bus ticket to a major city, or a night in a cheap hotel.
Taxis are easy to find where ever you are traveling, although the price is usually high. Expect to pay $8-10 US to travel a mile in Cabo San Lucas or $35-40 US to travel from San Jose del Cabo to Cabo San Lucas. From the airport, expect to pay $80 US for a cab to Cabo San Lucas / Zone 3.
Preparing your travel money options beforehand is the key to a stress-free vacation. Credit cards, debit cards, prepaid travel cards and cash are all accepted in Mexico. Outside of a few purchases like transportation fare or local shops, a credit card will be your best bet for everyday purchases.
It's recommended that you buy pesos before you land in Mexico, just in case you need the cash. According to this USA Today article, the most economical way to do this is to buy pesos from your bank in the U.S. Most banks will do this for free, especially if you're not withdrawing a significant amount of money.