Loreto is a small town of 15,000 located along the Sea of Cortez in Mexico (Steinitz et al. 2005). Founded in 1697 under Spanish rule, the town was the first capital of the Californias, and is now one of five municipalities in the Mexican state of Baja California Sur. The region was originally a religious center highly dependent on artisanal fishing. Pearl fishing and salt production industries in particular helped the economy flourish and made Loreto a center for coastal trade. Eventually however the salt mines were sold and the pearl industry exhausted, making tourism the main form of economic development (Ivanova et al. 2007).

In the late 1960s, Loreto was identified by the Mexican National Tourism Promotion Fund, Fondo Nacional de Fomento al Turismo (FONATUR) as one of few places in Mexico that could become a major tourist destination (Steinitz et al. 2005). Consequently, the past few decades have seen increasing growth rates as Loreto strives to catch up with other more developed regions in Baja California Sur, such as Los Cabos or the state capital of La Paz. This has led to intensive development that increasingly affects the area’s watershed, ultimately impacting the adjacent Loreto Bay National Marine Park, part of a U.N. World Heritage Site (WHS). Consequently, the coastline of Loreto Bay has begun to show signs of degradation due to improper land use and inadequate resource management (Steinitz et al. 2005).

The Loreto region is hot and dry with wet humid summers creating an ecosystem of diverse flora, fauna and unique landscapes which attract thousands of visitors every year. The particular draw is Loreto Bay, which has a level of biodiversity characterized as one of the highest in all of Mexico. This ecologically rich marine park is home with more than 300 species of fish, 1,500 marine invertebrates, 250 algae species, more than 30 species of marine mammals, and 5 species of sea turtles, which are increasingly threatened by extinction (Arispe et al. 2007). The bay is currently affected by both inadequate fishing regulations and enforcement, and the consequences of the growing tourist industry.

Within the next 2 to 3 years, the number of people in greater Loreto is expected to grow 10-fold due to increasing tourism and related development. Proposed or pending large-scale development projects include resorts, eco-villages, golf courses, and four desalination plants which will span the approximately 25 miles of coastline along Loreto Bay from just north of the city of Loreto to Ensenada Blanca to the south (Villagas 2007).

Although locals are eager for the economic opportunities engendered by tourism development, there is increasing interest in tempering the recent rapid development in favor of more sustainable growth. Nonetheless, the strong economic incentive means that a combination of land use changes and increased population is expected to accelerate land-based activities that negatively affect the sensitive ecosystem of the Marine Park (Villagas 2007).

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