Tuesday 4 October 2022

Tourism sector concerned that Costa Ricans could “sacrifice their vacations” due to the increase in the cost of living

Less tourism or shorter vacations could be the result of the high cost of living in the country

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04 October 2022 - At The Banks - BCCR

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QCOSTARICA – Costa Rica’s tourism sector is not registering major effects on visitation due to the high cost of living, which continues to rise.

The executive director of the Chamber of Tourism (Canatur), Shirley Calvo, acknowledges that they are concerned because when people have less money, one of the first cuts is in their expenditures is “leisure and entertainment”.

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“We are cautious because we are aware that this is a very sensitive activity and although it (the country) has an international position, it could be one of the countries that is most affected,” Calvo said.

This year, interannual inflation in Costa Rica went from 3.5% in January to 11.48% in July. Ten years ago the country did not reach these levels in the Consumer Price Index (CPI). The most affected are food and non-alcoholic beverages, as well as the cost of recreation, sports and culture.

The latest measurement of the CPI reported a decrease in the cost of gasoline of -0.91%. However, this does not take into account the latest increase in fuels, reaching historic levels.

Also, the cost o air transportation has increased in the most in recent weeks.

Less tourism or shorter vacations

Calvo said that she is not only concerned that people (potential tourists) have less money, but that at the same time the services offered are more expensive.

For her part, the executive director of the Costa Rican Chamber of Hotels, Flora Ayub, explained that another possible effect is that families spend less for their trips.

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For example, a “paseo” (an outing) that used to be a weekend will become a Sunday excursion to the beach.

Ayub questions, “How much does it cost you to fill the gas tank to go to Puntarenas for one day?”.

Both Ayud and Calvo agree that it will be national tourism that will be the most impacted if there were to be a decline in this economic activity. This is because, in addition to inflation, many of the tourist services are offered in dollars, whose exchange rate had a significant upward trend in mid-2022.

The College of Economic Sciences predicts that the dollar exchange rate will close this 2022 between ¢675 and ¢695 for the sell which means that it will either remain as it is today or will rise, but not fall.

Tourism in recovery

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Calvo is optimistic. She agrees with the Government of Rodrigo Chaves that tourist activity in Costa Rica will recover before the world average.

For the country, 2023 will be necessary to reach the tourism figures of 2019, including the generation of foreign exchange and the arrival of international tourists. In the rest of the world, it is expected to do so between 2024 and 2025.

However, both Calvo and Ayub agree that while the recovery will continue, the high cost of living could slow it down.

The most recent report from the Instituto Costarricense de Turismo (ICT) concludes that the country is half a million international arrivals away from recovering pre-pandemic figures.

For the first six months of this year, total international arrivals were 1,223,764. In 2019, for the same period of time, the figure was 1,725,963.

Source: Observador.cr

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