San José, Costa Rica, since 1956

Grim Tourism Outlook Has Silver Lining

A local consulting group projects tough times ahead for the tourism industry, but says the economic crisis presents an opportunity for the sector to reinvent itself and save Costa Rica’s reputation as an eco-tourism destination.

Based on a four-month survey completed in December, the San José-based tourism consulting group Desarrollos Turísticos Los Cuatro projects the number of tourists to decline between 5 and 7.5 percent in the first quarter of 2009, with hotel occupancy falling below 50 percent for the same time period. But, the company says, a silver lining exists if the right moves are made.

“Tourism is one of the economic areas that is impacted the most and the fastest, but at the same time that can recover the fastest,” said Mario Socatelli, executive vice president of the firm. “If we give, as a country, the right support to the tourism industry, the country’s economy will have the chance to lower the impact due to the crisis.”

Calling the crisis an opportunity if handled correctly, the report identifies several lines of action for the industry and the government, including protecting Costa Rica’s market, fostering sustainability, marketing strategically and planning in the long term.

Tourism accounts for more than 500,000 direct and indirect jobs in the country and 17 percent of the country’s gross domestic product, the group said, and should be a higher priority for government leaders and decision makers.

“We pride ourselves about tourism, but the government doesn’t really give it the priority that it needs,” said group director Bary Roberts. “We have serious security issues that are affecting the chicken that lays the golden eggs.”

Supporting sustainability, Roberts said, is a chief concern considering recent challenges to Costa Rica’s reputation as an ecotourism destination.

“There are a lot of weaknesses that Costa Rica has developed over the last decade, with the fast growth of ‘sustainable tourism’,” said Roberts, adding that many business say their practices are environmentally friendly, but there are no government regulations in place to monitor those claims.

Citing overdevelopment and sanitation problems in places like Tamarindo, Jacó and Manuel Antonio, Roberts said the country has “been very complacent” in upholding Costa Rica’s reputation as a leader in environmentally friendly, green tourism.

“They have really destroyed the ambience that Costa Rica represented a decade ago,” he said. “And the country can’t sustain itself like that. If the country keeps on going that way, we will lose (that reputation), and other people who start doing it right will take over our leadership position.”

In that sense, Socatelli said, the crisis presents an opportunity to ensure future development in Costa Rica shares the vision of sustainability.

“The crisis definitely will slow down the many developments that were built all over the country (without) a vision of what the country is about,” Socatelli said. “Local governments and municipalities have the opportunity that the crisis has given them to stop, revise and analyze what their development planning is for their areas.”

The group also concluded that the government should not back tourism outlets that attempt to market Costa Rica as a budget destination, arguing instead that the environment, not price, will be the country’s competitive advantage.

“Whatever we do, we shouldn’t be making any type of actions to attract a cheaper market,” Socatelli said. “We’re not in a position to compete with price with other destinations like Cancun or the Dominican Republic.”

Instead, they said, companies should focus on marketing aggressively and strategically, taking advantage of what the firm found is a interest among prospective tourists in buying packages and making purchases on the Web. While they reported that 78 percent of tourists to the country buy packages, and 58 percent make their purchases online, Costa Rica’s tourism industry is lagging in e-commerce.

“A lot of people are dropping back in their actions,” Roberts said. “Some of the smarter countries are stepping up. If we stay back, we’re going to lose out.”

The group has also called for a public- private partnership to market tourism, similar to that in the coffee industry, and argues that such a body would do a better job tracking the proper tourism statistics that the sector lacks today.

“We don’t even run the proper statistics,” Roberts said. “It’s unbelievable how poor the market intelligence is in this country, relative to the importance of tourism. That’s where the government should be spending their money. We need market intelligence seriously.”

“Tourism is a private sector activity,” he continued. “But the main marketing is done by the private sector.”

The current process, Roberts explained, mires marketing decisions in bureaucratic delays when rapid responses are necessary.

Other important changes, such as improving signage in the country and creating a national hotel school, could be expedited.

“It takes two to three months just to kick into action any change or decision you need right now,” Roberts said. “Our own system is killing us.”

Finally, the group found, the banking sector needs to aid tourism ventures that are not big investment projects.

“The banking system has not been an ally to the tourism industry, per se,” Roberts said. “This needs to change drastically.”


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