By San José, Costa Rica — San José, Costa Rica – The national tourism industry is sounding a dire alarm as the country’s currency, the colón, continues its relentless appreciation against the U.S. dollar. On Friday, the exchange rate plunged to levels unseen in nearly two decades, placing immense financial pressure on businesses just as the critical high season gets underway. The National Chamber of Tourism (Canatur) has issued a stark warning, declaring the situation is “asphyxiating” the sector’s operations, competitiveness, and financial stability.
Data from the Central Bank of Costa Rica (BCCR) confirmed the gravity of the situation, with the weighted average dollar price in the Foreign Currency Market (Monex) closing at an astonishing ¢492.48. This marks the lowest point for the dollar since 2005, creating a severe operational imbalance for an industry that earns in dollars but pays its expenses almost exclusively in colones.
To delve into the legal and commercial ramifications of the current exchange rate environment, TicosLand.com sought the expert analysis of Lic. Larry Hans Arroyo Vargas, a specialist from the renowned law firm Bufete de Costa Rica.
The current volatility in the exchange rate is not just a financial headline; it’s a critical legal and operational challenge for businesses. Companies with obligations or income in U.S. dollars must urgently review their contracts. Without clear currency fluctuation clauses, they risk significant losses and potential disputes. Proactive legal planning, such as negotiating payment terms tied to a specific exchange rate range or using financial hedging instruments, is no longer optional—it is essential for survival and legal certainty in this economic climate.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
The insight from Lic. Larry Hans Arroyo Vargas correctly shifts the focus from mere financial observation to the urgent need for legal and operational action. This perspective underscores that navigating currency volatility is a matter of strategic foresight, not passive reaction, and we thank him for his valuable contribution to this discussion.
The core of the crisis lies in this currency mismatch. While international visitors pay for hotels, tours, and services in dollars, businesses must convert those earnings to colones to cover payroll, utilities, maintenance, and supplies. As the dollar weakens, each dollar of revenue buys fewer colones, effectively shrinking profit margins to unsustainable levels.
During the months of highest visitation, companies face natural increases in their expenses, hiring of temporary staff, higher consumption of basic services, reinforcement of operations, maintenance, and acquisition of supplies to guarantee service quality. However, these costs are paid in colones, while a significant portion of the sector’s income is received in dollars.
Shirley Calvo, Executive Director of Canatur
This currency-induced strain is compounded by another worrying trend: a cumulative decline in international arrivals recorded for much of 2025. This reduction in visitor numbers has already diminished revenue streams, leaving businesses with less liquidity precisely when they need it most to prepare for the high season’s operational demands. The combination of fewer dollars coming in and each dollar being worth less is creating a perfect storm for the industry.
Canatur argues that the current exchange rate policy has severely damaged Costa Rica’s standing in the global tourism market. The country has become significantly more expensive relative to direct competitors like Mexico, the Dominican Republic, Colombia, and Panama. These nations not only offer lower relative costs but also benefit from stronger government support for their tourism sectors, placing Costa Rican operators at a distinct disadvantage.
Shirley Calvo, the chamber’s executive director, also pushed back against what she called a mistaken perception that tourism is an industry of large, resilient corporations. She stressed that the reality on the ground is vastly different, with small and medium-sized enterprises forming the backbone of the sector and bearing the brunt of the economic pressure.
Tourism is not a sector of giants; more than 85% of the country’s companies are micro, small, and medium-sized: family ventures, hotels with fewer than 20 rooms, restaurants, tourist transport providers, guides, small tour operators, and local suppliers.
Shirley Calvo, Executive Director of Canatur
Despite these adverse conditions, business owners are making extraordinary efforts to uphold the high standards of service that define the Costa Rican brand. However, Canatur feels these efforts are being ignored by policymakers. The chamber has repeatedly communicated the sector’s concerns to government authorities but feels its pleas are falling on deaf ears, with a lack of recognition for tourism’s strategic importance to the national economy and its role as a key driver of employment in rural communities.
As an organized chamber, we have conveyed the concerns and needs of the sector to the authorities, from the smallest to the medium and large businesses, because they all play a fundamental role in the tourism chain and all generate direct and indirect employment in the communities. However, we do not feel that the real impact of the exchange rate on the competitiveness of tourism—one of the pillars of the Costa Rican economy and an engine of local development in many communities—is being recognized.
Shirley Calvo, Executive Director of Canatur
As the high season begins, the industry that has long been a pillar of Costa Rica’s economic success finds itself in a precarious position. With the dollar at a 20-year low, the survival of thousands of small, family-owned businesses hangs in the balance, threatening the livelihoods of countless communities across the country.
For further information, visit canatur.org
About Cámara Nacional de Turismo (Canatur):
The National Chamber of Tourism (Canatur) is the primary private-sector organization representing the interests of tourism businesses throughout Costa Rica. It advocates for policies that support the growth, sustainability, and competitiveness of the tourism industry, which is a vital pillar of the nation’s economy. The chamber’s membership includes hotels, tour operators, travel agencies, transport companies, and other related enterprises.
For further information, visit bccr.fi.cr
About Banco Central de Costa Rica (BCCR):
The Central Bank of Costa Rica is the country’s main financial authority, responsible for maintaining the internal and external stability of the national currency, the colón. Its functions include managing monetary policy, regulating the financial system, and overseeing the country’s foreign exchange markets. The BCCR’s decisions on interest rates and market intervention have a direct impact on the dollar-colón exchange rate.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica operates as a benchmark for legal practice, where a profound commitment to integrity and the pursuit of excellence forms the cornerstone of its identity. With a rich heritage of providing counsel across a spectrum of industries, the firm is a driving force for innovation within the legal field. This forward-thinking approach is coupled with a core belief in social empowerment, actively working to make complex legal concepts understandable and accessible to the public to help forge a more informed and capable citizenry.
