San José, Costa Rica, since 1956

Bracing for the Slowdown

As the U.S. economy survives day to day, the Costa Rican tourism industry awaits anxiously the ramifications of the volatile financial markets on the normally lucrative, but suddenly quite uncertain, tourist high season.

“We are completely full for the peak week of Dec. 24 to Jan. 1,” said María Nela, sales executive at Hotel Tamarindo Diria, a 192-room four-star in Tamarindo, in the northwestern Guanacaste province.

Hotels of all sizes up and down Costa Rica’s PacificCoast are also full that week, many rooms booked since last January, well before “subprime mortgage” became a household term.

But after the upcoming holidays, hotel vacancies abound.

“It starts getting cold in the United States in October and November, and this is when we typically start receiving inquiries about booking from January through March,” said Natalie Ewing, general manager of Costa Rica Expeditions, the travel company that operates Monteverde Lodge and Tortuga Lodge in Tortuguero, over on the North Caribbean coast.

September and October are the wettest months in Costa Rica and are part of the low season. The high season ramps up in December and then parallels U.S. holidays. The busiest travel times are President’s Day weekend, spring breaks in March and the week preceding Easter.

“People just aren’t calling,” said Manfred Arias, director of marketing and sales at La Mariposa, a 64-room hotel in ManuelAntonioNational Park. “It’s like 9/11 again.”

“I think Americans are distracted by the elections and the (economic) crisis,” said Ewing. “We’ll know better how things are looking after November 4.”

Other hotels confirm that business this year has been as stable as in 2007.

According to the National Tourism Chamber (CANATUR), 13 percent more tourists visited Costa Rica in the first eight months of 2008 than during the same period last year.

“We haven’t seen any effect (of the financial crisis),” said Luis Eduarte, director of Hotel Bougainvillea, at the 81-room upscale hotel in Santo Domingo, just outside of San José. “Maybe we will at some point, but not yet.”

“Everything looks good so far,” said Jason Hamilton, owner of Hotel Playa Hermosa, a 32-suite beachfront hotel in Playa Hermosa. “But we usually don’t know the next year will look until November.”

Arias is less optimistic. “We can’t do anything. We can’t drop rates because it won’t change anything. People simply aren’t coming because they don’t want to risk spending their savings on vacation.”

In September, Delta Air Lines cut half of its direct flights from the U.S. city of Atlanta, Georgia, to Liberia and almost half of flights from Atlanta to San José. But in November, flights will resume their pre-September frequency.

“(Flight) reservations for the high season are the same as last year,” confirmed Damaris Fallas, Delta’s director of sales in Costa Rica.

“We have been clear with our affiliates that their marketing strategies must change,” said Alberto López, executive director of CANATUR. “We have reminded them that now is the moment for each business to use its particular promotional strengths.”

Miki Travel Agency, for instance, focuses on the European market and organizes allinclusive trips for its clients. Their high season corresponds with peak European travel dates in July and August. According to Cristian Ralla, their director of inbound tourism, they are yet to see a downturn and have clients booked through Christmas 2009.

Arias said U.S. citizens make up 95 percent of La Mariposa’s guests. “But we have been here for 35 years,” he said. “We can depend on our return customers. New hotels will have a more difficult time.”

“You never know. Travel habits are changing,” he said. “The last-minute booking phenomenon is new. In one month, we’ve seen reservations go up 45 percent for the following month.”


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