| Costa Rica | Feb 06, 2017
Costa Rica has one of the most developed tourism industries in the region; not only does it provide a solid foundation for the economy, it acts as a catalyst across all sectors.
Costa Rica’s tourism sector has long been one of the strongest, most robust sectors in the country. With stunning natural landscapes that include wet, lush rainforests, powdered sugar beaches, and an extremely diverse score of wildlife, this country in the heart of Central America is blessed with some of the finest tourism offerings in the world. While the country has five-star and luxury accommodation on par with any other major tourist destination, its eco- and cultural tourism activities are perhaps the most developed in the world.
The main body overseeing the tourism industry’s development and sustainability is the Costa Rica Tourism Board (ICT), created in 1917. The ICT is tasked with development planning, attracting investment, comprehensive marketing, and assisting the management improvement process, among other responsibilities. By 2021, the board will act as the sole governing body for tourism in the country, as it seeks to further develop an innovative and sustainable tourism model.
The tourism industry is a major one in Costa Rica, providing substantial contributions to GDP. Direct contributions to the industry in 2015, meaning economic activity spurred by hotels, airlines, and other tourism-oriented business, were CRC1.33 trillion, amounting to 4.8% of the total, according to tourism research firm World Travel and Tourism Council (WTTC). The WTTC projects a rise of 2.2% in 2016, raising the total to CRC1.4 trillion. Over the next decade, the industry is forecasted to sustain strong annual growth, with the WTTC estimating a 5% per annum increase in the sector’s contributions to the GDP, ultimately contributing CRC2.2 trillion to the GDP, constituting 5.4%, by 2026. The total contribution to the Costa Rican economy, such as contributions stemming from the supply chain and investments, is even greater; in 2015, the sector’s total contributions to the economy equalled 12.6% of GDP, some CRC3.47 trillion. That figure is expected to grow by 2.2% in 2016, rising to CRC3.55.
The tourism sector plays an equally important role in national employment as it does in GDP. Though both the portion of total employment the sector contributes and the number of jobs has fallen throughout the last decade, figures over the past two years have started to rise again, with the WTTC forecasting a steady increase in the sector’s contribution to employment over the next 10 years. The WTTC reports that the total contribution to employment in 2015 was 256,000 jobs, representing just over 12% of total employment. In 2016, a 1.5% increase is expected, with the sector adding an additional 4,000 jobs to the labor market. Through the next 10 years, the WTTC estimates the travel and tourism sector add jobs at a growth rate of 3% per annum, providing just over 350,000 jobs by 2026, representing 13.6% of total employment in the country. Tourism dominates the country’s service exports industry; in the second trimester of 2016, tourism accounted for 48.8% of the total service account, according to the Costa Rica Star. This accounts for a staggering 15.8% growth YoY. Tourism in Costa Rica plays a key role in developing the national economy and acts as a catalyst for projects in all sectors.
Better late than never, low-cost airlines are starting to either include Costa Rica as a destination, or increase the number of flights and destinations to and from the country. Copa Airlines’ new, low-cost carrier, Wingo, announced it would start operations in December 2016, with four Boeing 737-300 aircraft flying to 16 cities in 10 countries throughout Latin America and the Caribbean; the budget airline will offer five flights weekly from Costa Rica to Panama, and three to Guatemala. In addition, Air Panama recently announced new flights to the country, from Costa Rica to Roatán Island in Honduras. Local carrier Air Costa Rica also announced that it open a flight between Guatemala and San José. Among big names, Air Franc announced in early 2016 that it would open two weekly flights from Paris to San José beginning before the end of the year on a 468-passenger capacity Boeing 777-300.
ICT has been working since the 1990s to build up Costa Rica as a destination for MICE tourism. In late 2015, President Luis Guillermo Solís announced plans to build a major convention center in the country before 2018. According to The Tico Times, the project is expected to cost some USD35 million and will have a capacity of 4,600. The meeting center will occupy 10ha and will be ideally located 10km from downtown San José and 8km from the airport. The National Congress and Conventions center is poised to include 10,000sqm of solar panels, high-efficiency air condition, and a rainwater harvesting system. The country hopes the center, when complete, will attract some 50 million conference-goers in its first year. In recent years, Costa Rica has seen a gradual rise in the number of business tourist arrivals, and, as such, business spending among tourists is slowly taking a greater and greater share of tourist spending. In 2014, business spending amounted to 18.8% of total spending, or CRC451 billion, with leisure spending making up the remaining CRC1.95 trillion, according to the WTTC. One year later, business spending’s share rose to 19.2% and brought in an additional CRC30 million. For 2016, the WTTC projects business spending to grow by 4.1%, and then assume a 3.8% yearly increase through 2026.