Govt Wants 4% Growth, $66m More Each Year
The Costa Rican government this week laid out an ambitious five-point action plan for the country’s tourism industry, calling for continued annual growth of four per cent, or about 70,000 extra visitors a year.
President Óscar Arias said he also wanted to see the number of hotel rooms in the country grow by 12 per cent, or about 3700 new rooms each year to accommodate the new business.
Under the plan Costa Rica’s tourism industry, already worth about $1.663 billion a year, would increase by more than $66 million a year for, for the next four years.
“Tourism has been key to our growth, but has also been key in the redistribution of that growth,” President Arias told developers, bankers and tourism industry leaders in San José this week.
“Tourism generates 100,000 direct jobs and close to 400,000 indirect ones,” he said. “Well paid jobs, stable, and distributed in areas traditionally marginalized from the economic benefits of the nation.
The president’s comments came in an opening address to the Costa Rican Tourism Investment Summit, the annual two-day event which this year brought together about 400 people for workshops, speeches, exhibits and networking.
The government’s plan calls for a four per cent annual increase in the number of tourists entering the country, a four per cent increase in the number of cruise ship visits, a 12 per cent increase in hotel room numbers and a 40 per cent increase in the number of companies awarded the so-called Sustainable Tourism Certification.
The plan also seeks more money to be spent on marketing Costa Rica as an international tourism destination.
“We are growing in the promotion and marketing of the brand,” the Minister of Tourism, Carlos Ricardo Benavides, told the summit. “We are looking to grow in quantitative terms and will invest twice as much in marketing,” he said.
Much of that money is likely to be spent in Europe rather than the traditional US market, from where more than half, or about 895,000 visitors to the country emanated. By contrast, in 2005, about 233,000 tourists came from Europe.
“There’s a mixed component. Some 60% of all visitors come from the US and Canada,” Mr Benavides told The Beach Times during a walk through the stalls and exhibits.
“But there’s a strong European component,” he added. “It’s proof of what Costa Rica means for the European Market…and this year we are aiming for a higher participation from Europe.”
“We shouldn’t be absolutely dependant on the US market.”
Both the president and his minister stressed Costa Rica would look to simplify the process by which construction and other permits are issued for tourist-related developments, something foreign investors have long sought.
“That would help,” said Alfonso Amen, a senior partner KPMG, S.A., which was one of the main sponsors of the summit. “The more agile the better for business, but it’s relative from one country to another.
“For instance there are many protected areas; this is both an advantage and a disadvantage. The advantages are clear; the disadvantages have to do with the strict rules to achieve sustainability.”
President Arias pointed to major hotel brands that have begun big projects, mostly on the northern Guanacaste coast, as an indication their strategies are working.
“These priorities have given fruit,” he told the summit. “In the tourism industry, we’ve attracted investment from the world’s great hotel chains, among them the J.W. Marriott, St Regis, Four Seasons and Hyatt stand out.
“Because of this enormous tourism growth, the government has vowed to work towards five strategic goals which will in the next four years multiply the benefits generated by tourism in Costa Rica.”
According to the Instituto Costarricense de Turismo, Costa Rica has averaged an 8.1 per cent increase in tourism in the past ten years.
However, at least one tourism industry expert has cautioned against over-estimating future expectations and revenues.
“I think 2005 was a boom year for tourism in Central America, which can probably be directly attributed to Costa Rica which had a increase of 13 per cent,” said Max Eidelman, who is a director with Northcourse, a global consultant on leisure real estate.
“But people in the industry in Costa Rica are getting used to this double digit growth and that is just not sustainable.”
Mr Eidelman said global warming, gasoline prices, security issues, the demand for electronic passports and the prospect of travel advisories can all work against the industry in Latin America.
“I think you will start to see a significant shift in a relatively short period of time, say three to five years,” he said. “All industries move in cycles, and I don’t think the tourism industry is any different.”
“We cannot be oblivious to the fact that after Germany the second highest per capital traveling nation is the US,” he argues. “And the US is the biggest feeder market to Latin America and to Costa Rica particularly.
“The fact that it is becoming impossible for tourists to easily get to the US will start affecting other nearby markets like Costa Rica.”
Mr Eidelman said infrastructure remained a big problem in Costa Rica.
“People are not going to go to high end hotels if they arrive at an airport, 90 minutes drive away on a bad road. Nor will people come if they do not address the communications problem.”
Despite caution in some quarters, investors heard how rapid development, particularly along the Pacific coast, had pressured banks to ease lending policies towards foreign investment.
“We’ve changed radically in the last five years,” said Marvin Ruiz, a business account executive for Scotiabank.
“From Guanacaste down to Herradura and Jacó and nearing Golfito, there were few banks that were interested in financing foreign businesses,” Mr Ruiz said.
“Today the four major private banks can finance 60 to 75 per cent to any foreigner who can demonstrate financial soundness.”
(Originally published by The Beach Times)
