Financial crisis in the US affects investments in Costa Rica

$1.2 billion in real estate investment have been suspended until project viability can be assured.

Tuesday, September 30, 2008

Several major hotel chains announced that their investment projects would be suspended for an indefinitely until the viability of the projects can be assured. These decision represent $1.2 billion in tourism investment in Costa Rica.

Many of these large hotel projects are financed by banks in the US such as Lehman Brothers, which had just opened offices in country in 2008. Some projects financed by American sources include the Mandarin Oriental, Hyatt, Saint Regis, Regent and Punta Cacique. The construction of these projects depend on market recuperation and bank stability.

More on this topic

Costa Rica: Late Payments Growing in Tourism and Real Estate

March 2009

In January, 2009, 15% of the payments in real estate and tourism loans were late, more than double the amount in August, 2008.

The figures reported by the Superintendent of Financial Institutions indicate that in August of last year, 7% of the payments on loans to the hotel and restaurant sector were late, whereas they were 15% in January of this year.

Tight Credit May Result In Massive Layoffs

October 2008

The business sector is warning that the Costa Rica could enter a crisis of massive layoffs if they cannot finance their activities.

The warning is based on the scarcity of credit both from the public and private banks, which is causing many companies not to have sufficient financial resources to continue operations or expand.

AOL founder Steve Case's $800 million project in Costa Rica delayed until 2010

October 2008

The financial problems in the United States are taking a toll on Costa Rica.

Construction was scheduled to begin next year on the much-discussed Cacique development, which includes two boutique hotels, a spa, an array of high-end home sites and a tennis facility designed by Andre Agassi and Steffi Graf. But now the project won’t break ground until 2010, at the earliest.

Forecast calls for drop in exports, tourism, investment and remittances

October 2008

For Eduardo Lizano, President of the Central American Academy, the fast benefits that were expected from the DR-CAFTA may not materialize

Due to the financial crisis in the US and Europe, Central America can expect to see a drop exports, tourism, real estate investments, and remittances sent home by immigrant workers, he said in an interview with IPS.

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