Tourism Leaders Discuss Threats to Industry

September 13, 2010

MANUEL ANTONIO, Puntarenas – Plenty of problems are bogging down the country’s travel businesses these days. Just ask them.

That’s just what tourism officials, industry leaders and politicians did at a recent conference in this central Pacific coast town.

Approximately 60 business owners, along with members of the press and representatives from the Costa Rican Tourism Board (ICT), all five political parties in the Puntarenas province, and the Costa Rican Tourism Professionals Association (Acoprot) gathered last week at Gaia Hotel and Reserve in Manuel Antonio to discuss the state of Costa Rica’s tourism industry. Gaia’s president, Boris Marchegiani, organized the meeting in cooperation with Grupo Manuel Antonio and the Aguirre Chamber of Commerce, Industry and Tourism, two organizations striving to promote and protect tourism in the area.

“The tourist industry in this country is going through a tremendous financial crisis,” said Marchegiani. “Rather than having observations made at random, I felt it necessary to study the problems from an educated point of view where professionals could express their expertise.”

Seven speakers gave presentations on topics including Costa Rica’s overall economic climate; the cost of services such as electricity and water, and the impact of special taxes; the effects of alcohol and drugs on tourism; criminal and safety concerns; the mounting legalities of running a sustainable, tourism-centered business; and the politics of securing a business loan from the bank.

Diego González, general manager of Hotel El Parador in Manuel Antonio, described the effects of the worldwide economic crash on Costa Rica’s tourism industry. With 80 percent of Costa Rica’s tourists coming from the U.S., hotel owners throughout the country have had to adjust to hard times in that country and abroad by slashing prices for hotel rooms. As a result, most hotels are taking in less money than three years ago, while payrolls and taxes continue to rise. González said the government should put more of the money it collects into solving problems that most affect the industry, such as fixing the country’s roads, maintaining national parks, and tackling the drug problem.

The declining colón/dollar exchange rate was another issue addressed at the meeting that has a strong negative impact on tourism. Guillermo Piedra, CEO of Portasol, an eco-community located in Portalón, south of Manuel Antonio, found that the exchange rate is nearly 205 colones per dollar below what it would have been if the government had continued its previous policy of allowing the colón to devalue at a rate of .65 percent per month rather than letting the rate be dictated by the market. The new system was put into place in October 2006.

Piedra, whose business attends to full-time foreign residents as well as tourists, showed figures demonstrating that $100 at the end of 2005 would have been enough to buy 2.5 canastas básica (a mix of basic consumer products whose cost is used by the government to determine increases in the cost of living), but that same $100 today would be enough for only 1.5 canastas, approximately 40 percent less.  

“I have full-time residents who are complaining that when they moved here three or four years ago they were able to buy more goods and services, and now they have less to spend,” Piedra said. “I also have vacancies.”

Throughout the night, there were calls for preferential treatment for sustainable businesses that make the environment a priority. Piedra went so far as to suggest a special exchange rate that would fluctuate for tourism based on an environmentally sustainable business model. And González suggested if the government did change the laws to favor ecologically friendly tourist businesses, other companies would follow suit.

Crime and lack of security, and the closely related problem of drug  and alcohol abuse, were also on the agenda. A discussion led by Harry Bodaan, president of the Aguirre Chamber of Commerce and chairman of its Security Committee, debated the question of why a canton of 493 sq. kilometers with a national park that attracts more than 250,000 visitors annually has a police force with no handcuffs or bulletproof vests, and no more than five Traffic Police officers. “If tourists don’t feel safe, they won’t come,” Bodaan said.

 

More Questions than Answers

 

While the speakers highlighted the widespread concerns within the tourism industry, they each also gave possible solutions. “We’re trying to come up with ideas to deal with the problems so that the legislative and administrative branches can see what action they can take on these issues,” Marchegiani commented.

Roland Lizano, ICT’s planning director, and Juan Carlos Borbón, director of the agency’s regional offices, both appreciated the clarity with which the tourist business community presented their concerns.

“Nothing came as a surprise tonight,” Borbón said, “but it was good to hear the expectations of the private sector as well as ideas of how we could help not only with economic and financial assistance but in other areas such as security, strategic alliances and labor issues.”

At the conclusion of the event, business owners were asked to elaborate on their views on investment in relation to 30 specific impact factors, for example, investment in regional marketing by the government, exchange rate policies and the legal framework for environmental protection.  

Marchegiani said this information, along with the points raised during last Friday’s meeting, will be compiled and provided to the ICT for review and distribution. The results will also be available to any organization that requests a copy.

“It is my feeling that the Tourism Ministry has done its absolute best to help the tourist industry, not withstanding the problems in communication within different branches in the government,” Marchegiani said. But he is hopeful that the tourism business community’s concerns will reach the ears of policy-makers in San José, spurring additional aid to the private sector.

Referring to the possibility of bank foreclosures should the industry’s troubles continue, Marchegiani said, “The main goal is to not have Banco de Costa Rica or Banco National be the largest tourism chains in the country.”

Boris Marchegiani can be reached at: tel. 506-2777-9797, e-mail borism@gaiahr.com

colleen.m.smith@gmail.com

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