CABO SAN LUCAS, Mexico (AP) _ Maids swept water from hotel lobbies and tourists scurried across flooded streets as a tropical storm dumped heavy rain on this fishing resort at the tip of Mexico's Baja California peninsula before slipping out to sea.

Greg, which was downgraded from hurricane status Tuesday, forced hundreds of local people to flee their humble shacks of cardboard and plywood to spend a second night in emergency shelters.

American vacationers grumbled over canceled flights and headed back to their hotels hoping to book passage home today.

The storm proved to be a nuisance for tourists and a disaster for Cabo San Lucas' poorest residents, many of whom work in the luxury hotels lining the dramatic Pacific coastline.

Cira Mejia Jacinto broke into tears at the Heroes of 1846 primary school, where she and her five young children sought refuge after the rain ruined their newly built cardboard shack a few miles from the hotel district.

The family had just moved to Cabo San Lucas from Guerrero state, one of Mexico's poorest, but her husband had yet to find work, Mejia explained.

``The water came in and got us wet,'' she said. ``We arrived here only recently. We don't even have money to eat.''

At 2 a.m. EDT, Greg's center was located 60 miles northwest of the southern tip of Baja California, creeping slowly northwestward, away from the Baja coast. The U.S. Hurricane Center in Miami said Greg's sustained winds had fallen to about 50 mph.

The Mexican government downgraded hurricane alerts to tropical storm warnings on the southern part of the peninsula.

Rains associated with the storm reportedly caused three deaths Monday in the mainland coastal state of Michoacan.

A state government pilot died after his helicopter crashed while on a relief mission to flooded communities, and two more people were killed when a wall collapsed, apparently as a result of the rains, the government news agency Notimex reported.

Nearly 1,000 people in Cabo San Lucas and nearby San Jose del Cabo had sought refuge Monday night when the hurricane brought its first wave of rain. Almost all went home when sunshine broke through Tuesday, but that afternoon many returned to the shelters when a second downpour caused more flooding.

Soldiers patrolled at-risk neighborhoods offering to carry people to refuge aboard their jeeps. But many refused to leave their homes and possessions unguarded.

Isabel Ozuna's family evacuated 10 children from their soaked shack in the Lomas del Sol neighborhood.

``We'll be going, too, in a little while,'' the 50-year-old woman said pointing to other adults in the family. ``We're just waiting for the others to get home from work.''

A short distance away, hotel maids in pastel colored uniforms hitched rides on jeeps that ferried them over a low-lying crossroad turned into a roaring creek that blocked the dirt path leading to their homes.

Tourists, meanwhile, tried to make the best of their vacation. At the Giggling Marlin bar and restaurant, they sipped on drinks and waited for Greg to pass.

Said Stacey Sparks of Denver, ``As long as it goes away, I'll be happy.''