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    Tourism Sector Concerned that Costa Ricans Could “Sacrifice Their Vacations” Due to Increase in Cost of Living

    When people have less money, one of the first cuts is in the "leisure and entertainment" category, they say

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    The tourism sector in Costa Rica “is not registering great effects” on visitation due to the high cost of living, which, moreover, continues to rise. However, 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 the “leisure and entertainment” category.

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

    During 2022, interannual inflation in Costa Rica went from 3.5% in January to 11.48% in July. It has been ten years that the country did not reach these levels in the price index.

    The cost of food and non-alcoholic beverages has risen 4.46% compared to a year ago, as well as the cost of recreation, sports and culture, which has risen 1.49%. The latest measurement of the Consumer Price Index (CPI) reported a decrease in the cost of gasoline of -0.91%. However, this does not take into account that since the previous Friday the price of all fuels rose again, reaching the threshold of ¢1,000 per liter. The latest report also shows an increase of 5.41% in bus transportation.

    On the other hand, although in the last balance of the IPC there was a decrease in the price of air tickets, this was one of the items measured that rose the most in price in recent weeks. It reached a variation of 13%.

    Less tourism or shorter vacations

    Calvo said that they are not only concerned that people (potential tourists) have less money, but that at the same time the services they offer become 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 pay less for their trips. For example, the excursion that used to be all weekend will become a Sunday-only trip the beach.

    “But how much does it cost you to fill the gas tank to go to Puntarenas one day?” questioned Ayub. Both 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.

    money

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

    Tourism in recovery

    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 Costa Rican Tourism Institute (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 reached 1,223,764. In 2019, for the same period of time, the figure rose to 1,725,963. The difference is 502,199 tourists.

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