Panama Investor Blog

Only 200,000 tourists visit Costa Rica, not 2 million

Costa Rica has a similar problem of collecting good data on tourism as Panama. As this article in AM Costa Rica  points out, although the official tourism number are 2 million, when you take out all the central American visitors and the residential tourists who come and go about 4 times a year, the real number of free spending tourist is closer to 200,000. This seems rather low to me, but Panama touts similar numbers and when we break it down we come up with fewer than 100,000 actual tourists. As I have pointed out a number of times, most people visiting Panama are here for business. A tourist will go into the country side to the see the flora and fauna and get a feel for the culture of the country. The sheer lack of hotels in the interior and low occupancy rates tell the real story. Glad to hear we are not so far behind our neighbor to the north.

Tourism institute seeks help in branding the country.

With a tourism industry in distress and an erosion of the nation's worldwide image, government officials want to put a new face on the country.

In a message sent out over the name of Carlos Ricardo Benavides, tourism minister, residents here and individuals elsewhere are invited to have their say on what the new Costa Rican image might be. There is a survey posted to a Web site.

In the e-mail  Benavides explained that what officials hope to obtain is more than a logo or a slogan. They seek to demonstrate the social values held by the people here. He said that the effort would require intense work but did not specify how much the Instituto Costarricense de Turismo might have budgeted for the process.

Benavides said that qualitative and quantitative techniques will be used to focus on the new image.

The institute has been slow in adopting valid methods. In fact, despite having identified a New Jersey family as the 2 millionth visitor in 2008, the institute does not really know how many tourists entered Costa Rica.

Tourism down 30% in Costa Rica

This article speaks to both the construction and tourism industry in Costa Rica. They have been hit much harder than originally thought and they will soon head into low season.

Excerpts from Canada.com:

Once-bustling construction sites on Costa Rica's Pacific coast are lying silent as a real-estate boom fuelled by tourists and U. S. expatriates slumps due to the global financial crisis.

At a dozen building sites around the picturesque Tamarindo resort town, where workers once crawled up and down hulking concrete structures, now only security guards stand vigil in the midday tropical sun.

Now the beach, normally crowded at this time of year, Costa Rica's busiest tourist season, is half-empty as cash-strapped travellers opt to stay at home.

Tourism is Costa Rica's No. 1 source of foreign-exchange earnings, so any dip can have a major economic impact on the country, also known for its eco-lodges in tropical jungles.

"We didn't expect this to happen, no one saw the crisis coming," said developer Guillermo Cubas, whose six-unit Brisas del Monte condominium stands idle.

Costa Rica taking hit

Costa Rica is certainly not immune from the downturn as this blog post points out. there a still a number of project being completed but they had been started long before the shoes began to drop. Unfortunately, Costa Rica will feel the negative effects more than most Central American countries because it has grown so dependent on the U.S. tourist and second home market. Prices have been driven up so high by market demand that they have a long way to fall before anyone can afford them in today's world.

Excerpts from the Costa Rican pages Blog: Since the economic crisis hit Costa Rica investment hard, halting tourist and residential projects and scaring off million dollar real estate development plans, several projects have managed to stay afloat with a positive outlook for the future of tourism in the country. Many investors will be watching the outcome of these investments intently, using them as a strong indicator for whether Costa Rica tourism has the potential to continue growing exponentially, or whether it is time to slow things down.

Read it here

Tourism number down in Costa Rica

 We get this report from the Costa Rica Pages.

Excerpts; Costa Rica is one of the most popular tourist destinations for North Americans and is in the top 5 countries visited by this group. Many North Americans own property in Costa Rica as the flights are only between 2 to 5 hours in duration. However, over the past 12 months (from September 2007 through August 2008), Costa Rica received 10,000 less tourists from North America than the year before during a similar time period. The worst month this year for tourist entrances was this August, with 8,500 visitors less than last August.

Many hotels are not even full for the high season in Costa Rica (Dec - Mar) and many such as Si Como No are offering incentives to stay extra nights with 50% off your final night. La Mansion Arenal in Arenal is offering the 4th night free if you pay for 3 throughout 2009.

This could well be a tough year for tourism in Costa Rica, however the Tico’s are hopeful that they will still be one of the premier tourist destinations in the world.

Financial crisis washes up in Costa Rica

Looks like the cracks in the tourism market are starting to show in Costa Rica. This article from the Calgary Herald explains

Excerpts:

For Rogers, who abandoned Calgary when he was 25, times are tough once more, the global meltdown cutting into this year's business at Condotel Las Cascadas, near Quepos, one of Costa Rica's top three tourist destinations.

Reservations for the upcoming Christmas season, a time that sustains many tourist operations through the quiet, rainy months, are down at Rogers' business by 30 per cent compared with last year. The situation is worse at other popular destinations, with hotel operators near Lake Arenal, where foreigners are drawn to its active lava-spewing volcano, reporting a 50 per cent decline.

Read the story here.

Costa Rica to spread the wealth through luxury tax on homes

As if the economy is not creating enough problems for real estate in Costa Rica, the government is now going to tax the over 6000 homes valued at over $200k with a luxury tax to "help eliminate shanty towns".
They will be doing some similar schemes in the good old U.S.A. in the coming year so you foreigners with homes in Costa Rica can plan on paying more in both locals. Your rich so you can (and should) afford it.

From the Costa Rica Pages

Legislators have approved taxes on luxury homes, and the money will supposedly help to eradicate shantytowns. How much money these taxes will generate is still unknown and the current estimates vary greatly. Houses valued at about $200,000 or more will be the targets of the new tax, however taxes on the land on which they are built are excluded in this scheme.
According to the National Registry there are more than 6,492 properties that are registered with a value of $200,000 or more. This project, which will be valid for 10 years, is considered to be a gesture of solidarity and should bring in enough cash to help build decent housing for the poor, thus allowing them to live with more dignity and sanitation.

Trouble in Paradise, a cautionary tale of squatters rights VS developers

Forbes carries this story which I have heard time and again in Costa Rica and it is now starting to surface here in Panama too. The lesson here is that Central American leaders are loath to protect foreign investors over locals because foreigners can't vote. Of course everyone loses when they vote with their feet.

Excerpts: Costa Rica is a retirement heaven--unless some squatters steal your land

Welcome to Eden--after the fall. An estimated 50,000 Americans and 15,000 Canadians spend more than four months a year in Costa Rica, a tiny, peaceful democracy (pop. 4 million) with heart-stoppingly beautiful mountains, rain forests and beaches. Every year 2 million visitors pump $2 billion into a stable economy.

It may be a great place to visit, but as a retirement spot? Think hard--particularly as an absentee landlord. The agrarian law says that squatters can't be booted off unoccupied land without a court order. Moreover, if they stick around for a year they get the right to stay indefinitely, if no one evicts them, and after ten years of such de facto possession they can file for title on the land.

There's not much recourse for owners who encounter uninvited guests. They can sue based on recorded title, but cases can drag on for years. As far as protecting investors, the World Bank ranks Costa Rica near the bottom--number 164 out of 181 economies--alongside Iran, Senegal and Haiti.

Costa Rica Travel Industry Faces the Economic Crisis

Regular readers of this bog know that I frequently refer to Costa Rica as a bell weather of both what Panama should be doing and what Panama can expect in the tourism market. Costa Rica is starting to feel the effects of the economy in the U.S. and the world which would be more worrisome if Panama had a lot of real foreign tourism.
 
Here are some excerpts from the Costa Rica pages; Here in Costa Rica, about 60 percent of incoming tourists are U.S. citizens. With this group taking the direct financial blow, luxuries such as real estate investment and family trips have to be reconsidered. The Chamber of Costa Rica Hotels recently noted a decrease in occupancy between 5% and 50% in respect to the occupancy levels at the same time last year.

Hotel prices are also on the decline, generally up through Dec. 15 when the High Season starts up. A well-known group of 4- and 5-star sustainable hotels has also jumped on board to lower prices in the hope of attracting more tourists.

In an attempt to diversify clients, companies have also taken the obvious step toward attracting national tourists to try out the vacation offerings of their own country. The Costa Rican Chamber of Tourism (CANATUR) is currently offering “ChiquiTico” prices for locals thanks to a 35% off discount on select hotels.

Costa Rica, Panama Sign Free Trade Deal

With the signing of the trade deal, 91% of Costa Rican goods can now enter Panama duty free. Panama is Costa Rica's fifth export destination.

The trade deal is expected to greatly benefit small and medium sized exporters as well as conusmers on both sides of the border, with lower prices for many products.

"Costa Rica is Panama's major market in Central America", said Torrijos, who assures that the trade deal will mean a greater exchange of goods between the two countries as the two countries have strong commercial ties.

The trade deal frees up of any tariffs 90% of the goods now exchanged between the two countries and with the rest of products dropping duties in the next 3 to 17 years.

Read this story hear...

Costa Rica floods: worst in a century

Well, it has been a very wet month here in Chiriqui, but we can be thankful that we have not seen the flooding being experienced by our neighbors to the west of us. Costa Rica and countries further north have been hammered.

Excerpts from Climate Change Corp: The National Meteorological Institute (IMN) of Costa Rica says that Costa Rica's 2008 rainfall is going to be the heaviest in 60 years, and a significant portion of that has fallen over the past week in association with the remnants of a tropical depression. 100,000 residents have also been forced to leave their homes over four countries in Central America, with the majority of the evacuees coming from Costa Rica.
Up to 15 inches of rain fell after Tropical Depression 16 moved through last week, which led the IMN to declare the floods to be the worst in over a century. Seven people died from the flooding in Costa Rica, four in Nicaragua, three in Honduras, and one each in El Salvador and Guatemala.

Bridges were smashed, villages were flooded and roads have been blocked by the flooding in Costa Rica. The latest round of rain is coming on top of what has been one of, if not the most intense rain season on Costa Rican record.

Experts are blaming the record rains on the influx of tropical storms that have rocked the region. A steady amount of storms have moved through the region and have 'sat over' Central America, moving slowly and dumping heavy rains for days at a time.