Surfing Costa Rica - Hotels, cabins, other accommodation places and food services are among the most affected by the current economic crisis due to COVID-19.
The second quarter of 2020 shows a decrease of almost 100% in the year-on-year variation in nights sold compared to the previous year.
The tourism sector has undoubtedly been the industry most affected by the economic crisis generated by COVID-19.
The government has tried to propose measures to gradually mitigate this impact. However, according to the latest report from the Central Bank of Costa Rica, the entity in charge of measuring the monthly index of economic activity by industry, accommodation and food service activities have experienced a decrease in the percentage variation of 68.55% from the beginning of the pandemic to the end of July 2020.
An alarming number that, according to economic studies, is caused by three factors that have led to this deficit, which are:
- Cancellation of reservations.
- Temporary closures.
- Impact on tourism based on COVID-19.
Furthermore, as we can see in the following image, the year-on-year variation in nights sold for the last three months has fallen enormously and is hovering around margins of almost -100%. We can also observe a large decrease in this second quarter of the year in the occupancy percentage, which has not even reached 3%, a truly alarming number. However, these figures could increase due to the reopening of airports, and we will have to wait until the third quarter to observe the percentage variations.
Another important point to consider is unemployment in the hotel or accommodation and food service industry, as these sectors have had to take measures in response to this strong impact, and layoffs or salary reductions are some of the solutions adopted.
This measure has affected a large number of people, who occupied a total of 140,838 positions in the first quarter of 2020; however, for the second quarter of this year, the number of people working in the industry is 77,188, representing a 45.19% decrease.
The Costa Rican Tourism Institute (ICT) is aware that domestic tourism will be key to the sector's recovery and has therefore encouraged Costa Ricans to travel under its "Let's Go Tourism" program. Furthermore, the ICT has implemented additional immediate support measures, which are:
- Approved the suspension of the payment of the 5% tourist tax to tourism companies.
- It determined the suspension of judicial collections, suspension of the collection of loans to tourism SMEs; all this for a period of three months with the possibility of extension.
These two points have been added to other measures that had already been implemented by the government, such as the "Protection Plan" and the "Aid Program".
The first phase consists of a review of the current state of tourism activity across three main areas: domestic and international tourists; the Costa Rican tourism industry's business network; and tourism professionals. Eight priority themes will be addressed: attracting airlines, marketing, tourism products, tourism businesses, training and employment, foreign and domestic investment, cruises, and the Papagayo Gulf Tourism Hub.
And finally, the third phase will be a review and analysis of the plan by the Executive Board and interested public, followed by the execution of the actions.
Material consulted:
http://www.albasud.org/blog/en/1211/impacts-and-reactions-to-the-fall-in-tourism-due-to-covid-19-in-costa-rica
Written by: Enrique Hernández
General Management: Marco Montero
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