Hotel supply Exceeds Demand, Sector Considered at Risk

Costa Rica News – While the Costa Rican Chamber of Hotels (CCH) ensures low hotel occupancy, there are new developments primarily in the Central Valley, however various sectors ensure that demand does not justify the increased supply.

Gustavo Araya, vice president of the CCH, said that they face unfair competition. Araya said that what happens in the certain places like Escazú is experiencing a hotel “boom” that could be risky because supply exceeds demand.

The 2011 statistics report an average of 55% occupancy, hoteliers in 2012 affiliated to CCH filled only 54.1% of the rooms.

The construction of the convention center in San Jose has cause a surge in hotel construction. The current capacity in San Jose is 5,000 rooms and the new development represent approximately 800 more rooms

Meanwhile, for many, the wave of new hotel construction is not justified because the capital city has no attraction for tourists, so the market is oriented only to the executive level. Tourists come seeking adventure one day and then look for other areas of the country. The development is not justified by the demand,

According to CCH, the sector is a significant risk because not only must analyze the occupation but also must add factors like high costs. For example, the increase in water service increased by 24%.

There has also been a decrease in European tourists in the wake of the economic crisis. The expectation is that the sector of European tourism to decrease by 30%.

The Costa Rica News (TCRN)
San Jose Costa Rica

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