WILL COSTA RICAN TOURISM EVER RETURN?

On June 12th, the Costa Rican tourism industry wrote an open letter to President Carlos Alvarado urging him to set a date to reopen airports in Costa Rica. It was signed by 900 movers and shakers of the tourism sector. It also asked for financial support for the tourist industry and better communication between Alvarado’s administration and regional tourism chambers. Twelve days later, airports and borders remain closed, along with hundreds of tourist businesses both big and small. The tourist industry is surviving on fumes.

Costa Rica has coped magnificently with the COVID-19 pandemic, keeping both hospitalization and death rates low, drawing praise from the New York Times, World Health Organization, and the international press. Now things have gotten serious. Travel agencies, tour operators, transportation services, car rental agencies, domestic airlines, rental home owners, restaurants and bars, have begun to go under, unable to sustain themselves without foreign visitors. Thousands are out of work, many more will join their ranks if the situation continues without improvement.

“Guanacaste is the main thermometer with which the impact of the pandemic on Costa Rican tourism is measured, as it the place that concentrates the largest number of hotel chains,” reports the Tourism Board, and the situation there is being described as “horrendous”. “Tourism is a strategic axis of the country’s macroeconomic policy. On it rests not only the Costa Rican brand, but also links a whole chain of resources and services ranging from local to national. Although the long-term effects are not yet easily seen we can consider the effects and measures taken since the pandemic broke out in March.”

The initial estimate of a 15-month recovery in the tourist industry: 3 months of zero income, followed by 12 months of a slow recovery, has been gradually modified, as it seems more likely that the pandemic will last much longer, with no treatment and no vaccine in sight. Costa Rica is very reluctant to open itself to an influx of foreign tourists and foreign money, inevitably accompanied by imported cases of the virus. They are wisely putting public safety first — the magnificence of Costa Rica as a tourist destination will still be present once the virus is better managed, understood or eradicated.

How serious is the damage to the tourist industry and the myriad people who rely upon it to live?
Unemployment was already up to 12.5% in the first quarter of 2020 before COVID-19, up from 11.3% for the same time period from 2019. The first COVID case was confirmed on March 6th, and by March 16th, Costa Rica declared a state of emergency and literally shut down over night. The Central Bank predicted that the economy would shrink due to the virus, but in truth, the virus clobbered the country at the height of the tourist season. Businesses were closed, vehicular restrictions imposed, borders closed, international air travel ceased, and people were told to stay home.

The current statistics for Costa Rican unemployment due to COVID-19 are between 129,000 – 500,000 workers unemployed, depending on the study. Underemployment went up 3.8%, that’s for people who work less than 40 hours a week, but want to work more. Informal and undocumented laborers are not included in those statistics, though they play a vital role in the tourist industry. We have seen a collapse in family businesses, closures of bars, hotels, shops and sodas, with some restaurants barely hanging on. 40% of restaurants have closed in Costa Rica, and 121,000 restaurant workers have been laid off.
The Restaurant Association of Costa Rica (CACORE) petitioned the government to be allowed to stay open Mon-Sun. They point out that of the 19,000 restaurants in Costa Rica, only 10,450 remain open, most citing COVID-19 as the reason for their closures. Semenario Universidad commented, “The closure of borders to foreign tourism in a country profoundly dependent on this economic activity has resulted in thousands of dismissals, cancelation of contracts, reduction of work hours, and above all, anguish for families of limited resources.”
The coastal areas have been hardest hit. Beaches remain open only limited hours, and yet are the number one reason many people visit Costa Rica.

The government has received 598,554 requests for Bono Proteger (unemployment benefits), and has thus far awarded 188,000 bonos. The bonos break down as follows: 36% independent workers, 21.6% informal workers, 12% reduced hours, and 8% suspended contracts. As mentioned, this is really the tip of the iceberg as so many Ticos work off the books and do not qualify for aid.

The employment situation continues to worsen in Costa Rica, while they await news of a reopening of airports and borders. Business bankruptcies are increasing dramatically. Families have had to rely on relatives and neighbors to keep food on their tables. Hope rests with a unified public relations movement to promote Costa Rica as the “First Place to Visit” once the pandemic is over. The beaches, sun, surf, ziplines, whitewater rafting, and charming citizens will still be there – if only the tourist industry is able to hang on.

Let’s hope the wait will not be much longer

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