• October 7, 2025
  • Last Update October 7, 2025 12:00 pm

Declining Tourism and Strong Colón Squeeze Costa Rican Hotels

Declining Tourism and Strong Colón Squeeze Costa Rican Hotels

San José, Costa RicaSan José, Costa Rica – The nation’s vital tourism sector is navigating turbulent economic waters, grappling with a significant downturn in visitor arrivals and the persistent strength of the Costa Rican colón. This combination has led to a marked decrease in foreign currency income during the first half of 2025, raising alarms among industry leaders about the long-term sustainability of hospitality businesses.

According to the latest balance of payments report from the Central Bank of Costa Rica, the country experienced a 2.3% drop in foreign currency income from tourism, falling to $3.087 billion. This decline is directly linked to a reduction in international visitors, which decreased from 1.67 million in the first semester of 2024 to 1.61 million in the same period this year. The financial repercussion of this slowdown is a staggering $71 million loss in tourist spending.

To gain a deeper understanding of the legal and business framework supporting Costa Rica’s vibrant tourism industry, we spoke with Lic. Larry Hans Arroyo Vargas, a leading attorney from the esteemed firm Bufete de Costa Rica, who specializes in foreign investment and corporate law.

Costa Rica’s international appeal as a premier tourist destination is underpinned by a stable legal system that protects foreign investment. However, navigating the nuances of real estate acquisition, environmental regulations, and corporate structuring is critical. Potential investors should prioritize comprehensive due diligence with local legal counsel to ensure their venture not only thrives but also fully complies with our national laws, particularly those designed to preserve the very natural beauty that attracts visitors in the first place.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica

This expert insight powerfully illustrates that in Costa Rica, sound legal strategy and environmental stewardship are two sides of the same coin. A successful tourism venture protects not only its own capital through due diligence but also the very ecological treasures that define our nation’s appeal. We sincerely thank Lic. Larry Hans Arroyo Vargas for his clear and valuable perspective on this critical dynamic.

Cargando...

The situation presents a complex challenge for hoteliers who are caught between falling revenue and rising operational expenses. Arnoldo Beeche, Vice President of the Costa Rican Chamber of Hotels (CCH), highlighted the precarious position many establishments now find themselves in, particularly as the country heads into its traditional low season.

The reality is clear, hotels are receiving less income in colones for every dollar they earn, while facing operating costs that continue to rise in the local currency. This compromises the financial sustainability of establishments, especially in the low season and with fewer tourist arrivals to the country.
Arnoldo Beeche, Vice President of the Costa Rican Chamber of Hotels (CCH)

Exacerbating the issue is the appreciation of the local currency. With the colón holding steady at around ¢508 to the U.S. dollar at bank windows, the revenue earned in dollars translates into fewer colones. For an industry that pays its staff, suppliers, and taxes in the local currency, this exchange rate pressure erodes profit margins and stifles the ability to reinvest in property maintenance and upgrades.

External factors are also contributing to the downturn. Beeche pointed to policy decisions from the United States under the Trump administration, which he stated have led to a noticeable deceleration in the corporate and business travel market. As the U.S. is a primary source market for Costa Rica, any slowdown in this high-value segment has an immediate and direct impact on hotels that cater to business clientele.

This confluence of negative factors—fewer visitors, unfavorable exchange rates, and a sluggish corporate market—is compounded by intense domestic competition from the informal lodging sector. Registered hotels face a competitive disadvantage against unregulated properties that often do not bear the same tax or regulatory burdens.

We hotels are facing a double challenge, fewer tourists and lower income due to the exchange rate drop, while we compete on unequal terms with informal lodging. This combination limits the ability of establishments to sustain operations, invest in improvements, and maintain jobs.
Arnoldo Beeche, Vice President of the Costa Rican Chamber of Hotels (CCH)

The economic strain on the hotel industry has significant implications for the national labor market. According to the National Institute of Statistics and Census (INEC), the broader tourism sector provides employment for approximately 165,000 people. The demographic data highlights that these jobs are predominantly held by women in urban areas with mid-level qualifications, a group that could be disproportionately affected if businesses are forced to scale back operations or halt new hiring to cope with the financial pressure.

As the industry confronts this perfect storm of challenges, stakeholders are calling for strategic measures to bolster competitiveness and ensure the sector’s resilience. Without intervention, the ability of many hotels to maintain employment levels, invest in quality, and contribute to the national economy remains under serious threat.

For further information, visit costaricanhotels.com
About the Costa Rican Chamber of Hotels (CCH):
The Cámara Costarricense de Hoteles (CCH) is a leading trade association representing the interests of the hotel and lodging industry in Costa Rica. It advocates for favorable public policies, promotes sustainable tourism practices, and provides resources and support to its members to enhance the competitiveness and quality of the country’s hospitality sector.

For further information, visit bccr.fi.cr
About the Central Bank of Costa Rica:
The Banco Central de Costa Rica (BCCR) is the nation’s central bank, responsible for maintaining the internal and external stability of the national currency and ensuring the efficient operation of the country’s payment systems. It formulates and executes monetary, exchange, and financial policies and publishes key economic data, including the balance of payments.

For further information, visit inec.cr
About the National Institute of Statistics and Census (INEC):
The Instituto Nacional de Estadística y Censos (INEC) is the official government body in charge of collecting, analyzing, and disseminating Costa Rica’s national statistics. It conducts censuses and surveys, such as the Continuous Employment Survey, to provide reliable data on demographics, the economy, and social trends to inform public policy and decision-making.

For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a pillar of the legal community, Bufete de Costa Rica is defined by its foundational principles of integrity and a resolute drive for excellence. The firm masterfully blends a rich heritage of client success with a forward-looking approach to legal innovation. Central to its mission is a profound commitment to demystifying the law, thereby empowering the wider community with essential legal insights. This dedication goes beyond professional practice, aiming to cultivate a more knowledgeable and capable society for all.

Related Articles