Hoteliers in Guanacaste and other tourist hotspots in Costa Rica have been doing brisk business and are enjoying the high season thus far in 2014, but their counterparts in San Jose are not. According to recent surveys conducted by the Costa Rica Chamber of Hotels and the National Board of Tourism (Spanish initials: ICT), hotels in the capital city have seen a 15 percent drop in occupancy compared to last year, and high prices may be to blame.

Sergio Arce of online news daily CRHoy.com reports that year-over-year occupancy rates also took a hit across the Central Valley. In January of 2013, hotels in the Valley, including those located in the lovable city of San Jose, enjoyed a 59 percent occupancy rate. Twelve months later, the rate dropped to 57 percent, and the decline has been much sharper in San Jose.

Industry observers and analysts have identified two reasons behind the considerable reduction. The first reason has to do with the recent expansion of the sector. Several hotels in San Jose have opened their doors in the last few years; many from established chains such as Holiday Inn, Hyatt, Sheraton, and Wyndham. This is good for visitors to San Jose since they now have many lodging options and abundant beds, but this is also diluting profit potential across the sector.

The second reason, according to Ruben Pacheco, president of the Chamber of Hotels, is that Costa Rica has become an expensive place to visit when compared to other regional destinations such as Ecuador, Mexico, Panama, and Peru. In the past, travelers who arrived in San Jose on business used to book an extra day or two so that they could enjoy the country, but that does not seem to be the case any longer. Tourists returning from the beach or the mountains also used to stay in San Jose for a couple of days before flying back home; alas, these days they are cutting their vacations short and skipping the city altogether.

ICT General Manager Juan Carlos Borbon does not agree with Mr. Pacheco’s assessment of Costa Rica being too expensive. He told CRHoy.com that:

“Costa Rica should be seen as a destination that offers both high quality and sustainability; this adds higher aggregate value when compared to other spots within the region. While it is true that we share tourists across some segments, this is not always the case for most visitors, who seek in our country an experience that is both unique and ecologically friendly.”