San José, Costa Rica, since 1956

Tourism industry dodges swine flu, but still under the weather

As the threat of a potential influenza outbreak reached Costa Rica, there were worries not only for the health of the population, but for the health of the economy, which relies heavily on tourism.

If the virus had spread inside Costa Rica the way it did in Mexico, the tourism industry – already feeling the effects of the global recession – would likely have seen a more dramatic drop, said Gerardo Rojas, the economic consultant with the Costa Rican Chamber of Commerce.

So far, the damage has been minimal. Costa Rica has one confirmed case of the Influenza A (H1N1) virus, with eight cases pending official results from the U.S. Center for Disease Control and Prevention (CDC).

To prevent any further spread, this week authorities began questioning passengers entering the country at the major airports about how they feel, and transferred anyone with related symptoms to be tested. It has also used the media to disseminate information about symptoms and prevention.

“The Health Ministry is the institution that can best maintain the economy right now, by keeping the people safe from the flu,” said Rojas.

Mexico became the epicenter of the socalled swine flu pandemic, and as news spread faster than the virus itself, the Mexican economy experienced a flurry of activity.

On Tuesday, Mexican Finance Secretary Agustín Carstens announced that the outbreak had cost the country at least $2.2 billion, mostly in the agricultural and tourism sectors, and the government planned

to inject the economy with a $1.3 billion stimulus in tax breaks and recovery funds for affected businesses.

But nearly two weeks after Costa Rica became the first Central American nation to preliminarily confirm a case of the virus, the initial concern over how the virus would affect the economy has died down.

“Actually, we have not seen a specific impact on any sector in particular,” said Eric Vargas, strategy manager for Aldesa, a San José-based financial consulting firm. “Right now, our position would be that the flu is not going to have a really large impact on the economy.”

Just because the economy hasn’t caught the flu doesn’t mean it isn’t feeling under the weather, though.

Vargas said the tourism sector has been feeling the wrath of the global recession. According to the Costa Rican Tourism Board (ICT), over the past decade, close to 53 percent of foreign travelers came from the United States, the epicenter of the global recession.

And for the first time in years, the once booming tourism sector is posting negative numbers.

On Monday, the daily La Nación reported that the country received 83,000 fewer tourists in the first trimester of 2009 than it had during the same trimester of the previous year.

The unofficial numbers from the two major international airports reflect a 13 percent decrease in the number of tourists entering the country, as opposed to the 17 percent increase during the same time period in 2008. The ICT has yet to confirm these numbers.

Even so, the rudimentary study reflects an alarming drop in a sector that has consistently seen double-digit increases in recent years, and makes up 8 percent of Costa Rica’s gross domestic product.

The drop doesn’t seem to have registered with Swiss Travel Service Costa Rica, however. Marketing Director Marcela Arias said the company, which caters mostly to Europeans and North Americans, has not seen many cancellations or significantly lower numbers since the beginning of the year.

And it’s been nowhere near as bad as in Mexico.

With the outbreak of the flu and the increased drug-related violence in Mexico, the United States State Department has issued two warnings against traveling to its southern neighbor since February. Recently, Mexican Tourism Minister Rodolfo Elizondo said tourism revenue is expected to drop by 43 percent this year.

And while airlines have begun to cut back on flights to Mexico and offer passengers the option of changing their destination without a fee, no such action has been taken for Costa Rica.

US Airways spokeswoman Michelle Mohr said the airline increased the number of flights to Costa Rica earlier in the year and plans to maintain those flights. By contrast, they reduced their service to Mexico by 38 percent through June.

However, none of this reflects what will happen in the long run, said Lynda Solar, executive director of the Costa Rican-American Chamber of Commerce.

“Really, we’re seeing business as usual, as investors think long term,” said Solar.


Comments are closed.