Costa Rica Tourism Industry Overview
Annual Grow Breaks Records!
Tamarindo Costa Rica
This industry has grown dramatically. Some 400,600 foreign tourists spent US$ 164million in 1988; of these, 123,600 came from the US and Canada. In 1992 more than half million foreigners visited Costa Rica, spent an estimated $200 million and created 15,000 jobs during the first six months of the year alone. Future growth is expected : an estimated 1.2 million visitors are projected to arrive during 1998 and a similar figure for 1999. The industry now employs half million Costa Ricans (17% of the population). On a par with bananas, tourism has become a major economic priority and a large number of new hotels are under construction, many of them owned by foreign investors. Unfortunately, many of the hotels, are being built with only short-term profit in mind, and without considering the effect such development will have on the local ecosystems. Some believe it is unwise for any local economy to place too much emphasis on tourism. Instability in the region, a major earthquake, civil disturbances, hyperinflation, even the whims of tourists could depress tourism sending the economy into a tailspin. Regardless, Intel Corporation’s exports from the country recently raised the commercial balance to a higher notch, surpassing any other industry in Costa Rica.
In its haste to boost the influx of tourist dollars, the government of Rafael Angel Calderon Fournier began promoting large-scale resort development on the shores of the pacific northwest. More than 50% of visitors in 1991 mentioned that they were visiting Costa Rica to pursue some interest in nature. The government also positions Costa Rica as a comprehensive destination for the whole family, and particularly as a beach resort contender to Mexico and the Caribbean, but with abundant biodiversity and radical changes between microclimates within the driving hour.
Sprawling resort complexes, which had before that been scarce and catered to the Costa Rica high class, began sprouting from the jungle shoreline. Jaco Beach has been pinpointed for redevelopment and is currently a small city, with all the good and bad that implies. Puerto Limon is expected to prosper as cruise tourism booms. Chief among the projects, however, is the Gulf Papagayo Project encompassing several beaches in Guanacaste. The megaresort, being constructed by a host of Europeans and Mexican developers, will be the largest leisure city in Central America. Mexico’s Grupo Situr alone is planning to build 6,900 rooms in an initial project phase that includes more than 2,000 hotel rooms, 50 luxury villas, 400 family villas, and 700 apartments, complete with shopping center, golf course, and other supporting amenities. In all, more than 20,000 rooms may be developed.
The development covers 4,492 acres close to several national parks and wildlife reserves, and has come under heavy attack from conservation groups for destruction of the ecosystems over which the development is carried out and for the possible environmental long term-impact.
There have been a host of hotel closures in areas where the construction of resorts was carried out without proper planning. Manuel Antonio, next to the Manuel Antonio National Park saw 60 hotels populate it’s roadsides in 10 years. Some 15 of those have had to close, as the profit margins shortens with the increase of competition.
Tourist Resorts are granted government incentives, but legal formalities have to be fulfilled before these can be granted. Plus, investments in the tourism industry are tax deductible.