Tourism Sector in Costa Rica Faces Multiple Challenges Amid Economic Instability
Increased costs, exchange rate fluctuations, and security issues hinder the growth of the vital tourism industry.
Costa Rica's tourism sector, traditionally a pillar of the national economy, is currently confronting significant challenges that threaten its stability and growth.
Shirley Calvo, Executive Director of the National Chamber of Tourism of Costa Rica (CANATUR), has highlighted economic, monetary, and exchange rate policy distortions as primary obstacles facing the industry.
The Costa Rican colón has appreciated against the US dollar, leading to diminished earnings for the tourism sector and reducing the purchasing power of foreign visitors.
This situation has contributed to a decline in tourism arrivals, as potential travelers reconsider the costs associated with visiting the country.
Since the COVID-19 pandemic, tourism costs have surged by approximately 20%, partly due to the introduction of Value Added Tax (VAT) on tourism services, which were previously exempt.
Inflationary pressures, combined with debt burdens and delayed credit payments, have further exacerbated the challenges for tourism-related businesses.
Increased operational costs, including contributions to social security, electricity, wages, and other expenses, have led many enterprises in the sector to either halt operations or struggle to remain viable.
Despite the sector's reliance on strong peak seasons for survival, visitor numbers have notably declined.
According to Calvo, the Central Bank's failure to implement effective measures for stabilizing the exchange rate has compounded these issues.
Infrastructure deficiencies present another significant challenge for the tourism industry.
Efficient transportation is vital for tourists traveling between attractions, such as volcanoes, beaches, and the capital city of San José.
However, many roads in the country remain in poor condition, which undermines the competitiveness of the tourism experience and can lead to negative perceptions related to value for money.
Additionally, a rising wave of insecurity has impacted Costa Rica’s reputation as a tourist destination.
Calvo pointed to challenges on two fronts: local security issues that directly affect tourists within the country and the growing presence of organized crime at an international level, which has tarnished Costa Rica’s image as a safe travel locale.
Shirley Calvo, Executive Director of the National Chamber of Tourism of Costa Rica (CANATUR), has highlighted economic, monetary, and exchange rate policy distortions as primary obstacles facing the industry.
The Costa Rican colón has appreciated against the US dollar, leading to diminished earnings for the tourism sector and reducing the purchasing power of foreign visitors.
This situation has contributed to a decline in tourism arrivals, as potential travelers reconsider the costs associated with visiting the country.
Since the COVID-19 pandemic, tourism costs have surged by approximately 20%, partly due to the introduction of Value Added Tax (VAT) on tourism services, which were previously exempt.
Inflationary pressures, combined with debt burdens and delayed credit payments, have further exacerbated the challenges for tourism-related businesses.
Increased operational costs, including contributions to social security, electricity, wages, and other expenses, have led many enterprises in the sector to either halt operations or struggle to remain viable.
Despite the sector's reliance on strong peak seasons for survival, visitor numbers have notably declined.
According to Calvo, the Central Bank's failure to implement effective measures for stabilizing the exchange rate has compounded these issues.
Infrastructure deficiencies present another significant challenge for the tourism industry.
Efficient transportation is vital for tourists traveling between attractions, such as volcanoes, beaches, and the capital city of San José.
However, many roads in the country remain in poor condition, which undermines the competitiveness of the tourism experience and can lead to negative perceptions related to value for money.
Additionally, a rising wave of insecurity has impacted Costa Rica’s reputation as a tourist destination.
Calvo pointed to challenges on two fronts: local security issues that directly affect tourists within the country and the growing presence of organized crime at an international level, which has tarnished Costa Rica’s image as a safe travel locale.
