According to a recent article in La Nación, the answer is mixed.  The article sites the CCH (or Costa Rica Hotels Chamber) as predicting that the decrease for hotel occupancy in the coming high season will be between 5% and 50%.  Wow!  That is some dire prediction.  The article states that according to the CCH, some 52% of its members claim to have experienced a decrease as of the year 2008 to date, compared with 2007.  The article states that the Northern Zone, principally the area of the Arenal Volcano (or, San Carlos) has been hard hit by the decrease, with hotels reporting 30% to 45% decreases in occupancy compared to last year’s low season.  Also hard hit are the hotels of the beaches, whereas hotels in San Jose have fared better.   Contributing to the economic problems is the uncertainty of the elections, the article states.  Cancellations for the high season 2009 are also running high.  However, the management of the largest hotel in the capital city, the Best Western Irazu, as well as operators of several other prominent hotels and the Gray Line Tour Agency, claims that they have not experienced any decrease from last year.  They claim that business travel is up due to passage of the TLC.  They also site the fact that oil prices have dropped some 50% to support their optimism for tourist travel in the coming season.  They are also putting their money where their mouths are by spending some $5 million to add 40 new rooms to the Hampton Inn near the International Airport.  Another major tour company, Swiss Travel, also claims not to have experienced any decrease.

Being the owner and operator of a Costa Rica Vacation Package agency, I can also speak from experience.  2008 has been our best year to date.  However, we have experienced a dramatic decrease in sales since the beginning of September and as of yet, sales for 2009 have not begun to come in.  Nevertheless, I have reasons to be optimistic.  I recently posted to this blog about my feeling that there are certain qualities about the Costa Rican vacation market that may make it even more attractive in a downturn than other markets (See recent blog post).  To reiterate, here are a few reasons I believe Costa Rica is in good position to weather the economic storm…..

1. Costa Rica has predominantly attracted reasonable wealthy tourists and they will tend to take vacations anyway and may prefer vacation spots like Costa Rica that are closer and less expensive…..

2. Gas prices are going down which hopefully will translate to lower airfares….

3. As the world becomes more environmentally conscious (especially the U.S.), Costa Rica will become more attractive due to its environmentally conscious reputation…..

4. If Obama is elected and Democrats end up with control of the Presidency, the Congress and the Press, many may consider the idea of moving to Costa Rica and this will spur more tourism as general interest about Costa Rica is peaked….

As I heard Bill O’Reilly mention recently, if all goes to hell in a hand-basket in the U.S., “we’ll all have to move to Costa Rica.”  If Mr. Bill has Costa Rica on his mind these days, it is a good bet that many others probably do (or will) as well!

Link to Article in La Nación

This entry was posted on Thursday, October 23rd, 2008 at 5:09 am and is filed under Costa Rica Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.