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Businesses try to lure travelers with discounts as tourism takes a dive.
SAN JOSE, Costa Rica — “When the United States sneezes, we catch a cold,” a Costa Rican hotel owner said recently.
He wasn't talking about swine flu.
The tourism industry, vital to the Costa Rican economy, has been reeling from the global downturn, with estimates of up to a 13 percent decline in visitors in the first quarter from the same period in 2008. Now, with the onset of the low season, hoteliers and tour operators are bracing for an even harder fall.
Casa Roland Hotel Group has definitely felt the hit. The company has watched room occupancy plunge by as much as 40 percent, according to Christian Castro, the group's corporate marketing and sales director.
More than two-thirds of businesses in the tourism industry have reported a slower-than-normal first quarter and nearly a third reported layoffs in the past few months, according to the National Tourism Chamber. (Costa Rica lacks up-to-date unemployment figures, but analysts estimate it has risen to more than 7 percent from less than 5 percent last year.)
All told, economic activity has slowed for six months in a row, prompting a growing number of economists to cry recession. Tourism, along with manufacturing and construction, is among the hardest-hit sectors.
Despite promising headlines on the travel pages of the U.S. press, like The New York Times' recent "Costa Rica Any Way You Want It," businesses like Casa Roland fear that cash-strapped Americans and their counterparts in Europe and around the world won't visit this tropical paradise anytime soon.
"I've never seen a year tougher than this," said the Costa Rica Tourism Board's deputy manager and marketing director, Maria Amalia Revelo. Her department is equipped with a $20 million budget to promote this destination worldwide.
Meanwhile, some of Costa Rica's neighbors are enjoying sustained growth periods. Panama's visitor numbers are up 3 percent, Guatemala’s 4 percent and Nicaragua's surged by 11 percent. Juan B. Pasos, general manager of Hotel Alhambra in the colonial city of Granada, Nicaragua, said the crisis has hardly made a dent in occupancy at his 60-room hotel.
Looking at the numbers alone, it almost appears as if somebody lured away Costa Rica's tourists — the country hit a record of 2 million total tourists last year.
But it isn't so, said Coralia Dreyfus of the Central American Tourism Council. She said Costa Rica's principal visitors are Americans, "who are suffering more severely the effects of the economic crisis." The most frequent visitors to the rest of the region are Central Americans, for whom it's an easier, more affordable journey, often made by land.