Due to Costa Rica's estimated average hotel occupancy rate of 52% by 2020, well below the 95% recorded at the end of 2019, businessmen in the sector expect that in this context of crisis there will be no peak seasons next year.
The tourism sector is one of the hardest hit by the economic crisis generated by the outbreak of covid-19, because mobility restrictions, the closure of air terminals and the fear of tourists to be infected, have influenced the drastic fall in tourism activity.
Because the Costa Rican Assembly is discussing a bill that seeks to give municipalities the power to declare a dry law in their jurisdiction due to a national emergency, hotels, restaurants and tourist establishments are asking to be exempted from the rule.
The Legislative Plenary approved in first debate the file 21,281 Law to restrict the commercialization of drinks with alcohol content in sports activities and shows, this after the initiative had to be taken back to first debate to amend some details that the deputies considered necessary, informed the Assembly on July 16.
Attracting executives, pensioners and people willing to work remotely from Costa Rica, who extend their stay in the country for long periods, are some of the business opportunities that businessmen have detected in the current commercial scenario.
Although the sector is practically in the zero season, since the outbreak of covid-19 Costa Rica closed the borders to tourism, and during April and May there were practically no visitors to the country, the businessmen are beginning to prepare themselves to face the new commercial reality that arose from this abrupt change in the ways that people relate to each other on a global level.
As a result of the covid19 outbreak, Costa Rica closed its borders to tourism and during April and May practically no visitors entered the country, a situation that will persist in the coming months due to the slow reactivation of the sector.
In order to mitigate the advance of the virus, by means of a government decree the authorities ordered that as of March 18 only Costa Ricans and residents could enter the country.
Because of the restriction measures decreed in the country due to the covid-19 outbreak, between March and April of this year the average hotel rate for two people decreased from $160 to $120.
According to the "Monetary Policy Report" prepared by the Central Bank of Costa Rica (BCCR), in the face of the health crisis, hotel occupancy in the country has plummeted in the first four months of the year, from 90% in January to 15% in April.
New health and hygiene protocols in the establishments and the commitment to attract national tourists in an environment where short trips will be preferred, are some of the trends predicted in the new "normality" that will come after the quarantine period.
Given the quarantines decreed by most governments worldwide, it is anticipated that the habits of tourists will change dramatically in the short and medium term, as the crisis of covid-19 will leave consequences among consumers.
In the context of a considerable fall in foreign investment in the sector in Costa Rica, the situation could be further complicated by the elimination of tax incentives that tax reform is bringing along.
Figures from the Central Bank of Costa Rica (BCCR) detail that after reporting $443 million in foreign direct investment in tourism in 2017, this figure decreased dramatically last year, registering only $23 million.
After nine days of strikes by public officials in Costa Rica, tour operators, hotels and restaurants in different parts of the country are reporting that reservations are being cancelled and sales are plummeting.
The strike being promoted by the country's public unions started on Monday, September 6, and has already caused millions of dollars worth of losses due to multiple road blocks and acts of sabotage in the fuel distribution chain, among other coercive measures.
The limited political strength of the current Minister of the department is preventing industry demands from being addressed and priority given to the sector in the government's strategy.
Representatives from the tourism industry argue that they have been given a back seat because they are not given the necessary priority in government policies. The sector is also complaining about lack of investment in tourism infrastructure, excessive paperwork and permits and the enforcement of laws discouraging economic activity in the sector.
Although it is facing 2015 with optimism, Costa Rica knows that it is facing strong growth in competition from regional neighbors as a tourist destination.
Costa Rica has begun to lose its comparative advantage which it has held for many years over the rest of the region in attracting tourists. The strong competition from destinations such as Nicaragua and Panama is now creating some difficulties for the tourism industry, in whose view the country is not investing enough in promotion compared to its competitors.
The Chamber of Costa Rican Hotels disagrees with the Chamber of Tourism in the perception of the profitability of the industry, and has suggested their separation.
A survey last month by the National Chamber of Tourism (CANATUR) on the perception of the sector’s profitability, employment and demand for tourism services, showed a picture of optimism that surprised operators and industry observers, as complaints from Costa Rican tourism businesses have been constant since the crisis of 2008-2009.
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