Although in 2019 the arrival of tourists to Costa Rica increased 4% compared to 2018, businessmen of the sector continue to face complex procedures to open a new business and the high costs of basic services.
Data from the Directorate General of Immigration and Foreigners, said that between 2018 and 2019 the number of foreign visitors who came to the country grew by 122 thousand, from 3.01 million to 3.14 million tourists.
In Costa Rica, exporters and businessmen of the tourism sector are concerned about the decreasing trend that in recent months has reported the exchange rate, which on July 18 was quoted at ¢575.7 per dollar.
Official figures report that between early February and mid-July of this year, there has been a fall of up to 38 colones per dollar, as the average rate in the Monex wholesale market fell from ¢613.87 to ¢575.69.
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.
A month before the ballotage, Costa Rican tourism entrepreneurs are asking the two candidates for clear proposals on issues such as the impact of Airbnb, the tax burden and the image of the country at an international level.
Following the trend of the main business associations in the country, the National Chamber of Tourism (Canatur) has started to raise its concerns and ideas with the two presidential candidates regarding how to improve competitiveness of the sector.In the first meeting, with Fabricio Alvarado, candidate for the Restauración Nacional party, representatives of Canatur asked for urgent issues to be attended to, such as the case of the holiday rental platform Airbnb and the impact it is having on the operation of hotels and hostels.
Between January and August, tourists' arrivals grew by only 1.3% compared to the same period in 2016, mainly due to a 3.4% reduction in the arrival of Americans.
While the Minister of Tourism attributes the reduced tourists arrivals to a change of government in the United States, private entrepreneurs think that part of the decrease is due to a reduction in the supply of seats on flights from US cities to Costa Rica.
Visitors who came into the country in the first quarter generated $1,242 million, the highest quarterly figure for the last 16 years.
Of the total foreign exchange from tourism entering between January and March 2016, 77% was through personal trips and the remaining 13% from business trips, according to a detailed breakdown published by Nacion.com.
Correcting the mistake made in July 2014, the Solis administration has reinstated the strategic political role of the tourism sector.
An article in Elfinancierocr.com reports that "... The Presidential House announced that the tourism sector will regain its rank within the government. The announcement of the correction made on Wednesday night by the President of the Republic, Luis Guillermo Solis, who signed an executive order to return the tourism sector to top place during the inauguration of Expotur 2015. "
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.
The postponement of the payment of sales tax on some activities, approval of pending projects and the creation of a Tourism Competitiveness Council are some of the points that entrepreneurs want to prioritize.
Private trade union for tourism has raised at least five actions points it hopes will be addressed no later than next May by the Costa Rican Tourism Institute.
Businessmen are complaining that investments in international promotion amount to less than a third of what Panama spends, resulting in the country losing competitiveness as a destination in the region.
The 2015 budget for investment in official tourism promotion is $18 million, which industry representatives say is not enough if you expect tourism flows to keep up a good pace.
The productive sectors are pointing out the negative effects of the planned increase from 13% to 15% in Value Added Tax, and insist on the need to resolve the fiscal problem by cutting state spending.
According to representatives of the productive sector, an increase in Value Added Tax (VAT) will have a negative effect on the economy. For the food industry, the 15% rise could result in the closure of production plants and an increase in informality among businesses.
Up until December 31, 2015 a moratorium will be in effect on the payment of the 13% sales tax on recreational tourism activities in Costa Rica.
The tourism sector will accept the new tax on their terms: desiring an alternative draft law as soon as possible, which exempts legislative procedures and exonerates the charges made before the moratorium.
A proposal has been made to create a program within the Banking Development System to allow tourism enterprises to readjust their debts with banks.
If the bill introduced in Congress thrives, a group composed of representatives from the Costa Rican Institute of Tourism, the Banking Development System and the Ministry of Planning (Mideplan) would analyze each case and determine which companies could opt for restructuring.
Ranging from law suits to revoke the decision, to a request for injunction against the Director of Taxation, legal measures are being taken by the guild in Costa Rica to get the collection of the sales tax suspended.
The decision to charge sales tax on companies offering tourist services, retrospectively since 2009, will generate the "... failure of many businesses," warn the authorities of the National Chamber of Tourism (Canatur).