Costa Rica is the most popular tourism destination in Central America for US visitors. According to Costa Rica’s International Institute of Tourism, the country is a republic with 4.8 million inhabitants as of 2017, with a projected 3 million visitors same-year. The country boasts a large period of its history in peace, and has the highest financial and white-collar sectors in the Central America. Its people are predominantly of European Spanish descent. Costa Rica has made significant investment in tourism marketing to supplement its plurality agricultural sector.1 This paper discusses strategies to attract United States consumers while striking the delicate balance of economic growth and sustainability.
Costa Rica has had limited turmoil throughout its 500-odd year history after first European contact, with the final revolution and disarmament occurring in 1949.2 Like the rest of the
Central America declared themselves independent in 1821.3 This provenance has allowed an early flourishing of a tourism sector, giving Costa Rica a head-start. The climate is like most of its counterparts in Central America, with temperate rainforests and volcanic activity.
In 1992, Law 7293 was passed by the legislature4 (and two subsequent follow-up laws with the next 15 years) to firmly implant Costa Rica as a nation seeking to develop its tourism sector. In the past ten years the incentive push has been less than vigorous as the country still
dominates the tourism landscape in the Western Hemisphere.
As a comparator, Guatemala and Belize possess similar modern stability in urban centers and are now natural competitors to Costa Rica in the region. Since Guatemala frequently an has aberrant situation in terms of head-of-state turnover despite massive improvement in growth5, Belize is the recommended alternative for development or deployment of tourism capital in the region, has a stable government (less susceptible to spontaneous coups, given its history) and was more likely in the past to resolve even entrenched conflicts with diplomacy.6 Most importantly, it has a “close and cordial” relationship with the United States.7
Costa Rica, with such a vigorous tourism industry, begets vigorous local competition and seemingly bottomless foreign investment, and thus these alternatives are presented here for further investigation.
The primary area of tourism for Costa Rica is ecotourism, with a small but burgeoning medical tourism milieu. As a stimulus for these processes, the Costa Rica is active in attracting tourism press and cultivates a relationship with major broadcast outlets with junkets.8 It has paid dividends, with arrivals expected to match half the current population if growth rates continue.
In 2001, 90% of native Costa Ricans had a positive view9 of the tourism industry and its contributions to the health of the economy and stability of the state. From 1996 onwards, Costa Rica has had a throughline motto of “No Artificial Ingredients”.10
Costa Rica also benefits slightly from a bystander effect. Since the United States benefits the most financially from tourism in a raw monetary basis11 (with France topping the list for total arrivals, and the Chinese spending the most), Costa Rica’s proximity to the powerhouse allows an inevitable increases in tourism. Despite Costa Rica being the dead center of an orthographic projection of the world, most of the visitors are from the United States, with other Central American countries being a far second. Tourism represents about 5% of the GDP of Costa Rica, while the comparative number to the United States this number is 2.7%.12
Costa Rica also has nominal tourism from within its own borders and relies on these numbers for the bottom line. That being said, the per capita GDP of Ticos is about $12,000 USD13, so extravagance with internal tourism is uncommon. Contrast this to the United States, which facilitated about 600 billion dollars in domestic tourism14 (some of this obviously would be attributed to the sheer land mass).
The niches for ecotourism are largely preserved via state parks and other initiatives developed in the 1970s to combat the rapid deforestation. Costa Rica was estimated to be 99.8% forest pre-colonization, and in 1981 the coverage had been whittled down to 31%15. The majority of this reduction occurred post-1950. Up until this time the slash and burn agricultural system of Costa Rica was predicated on the Western Hemisphere’s general appetite for beef. Prior to colonial intercession into the rainforest, up to 99.98% of the landscape16 was classified as either rainforest or arable land.
The development of ecotourism per se was serendipitous; Costa Rica had developed its National Park system partially due to the pressures of the academic elite or popular opinion. Costa Rica had its eye on tourism somewhat early for its development (1931) but the development of ecotourism was more organic. Incrementally, during the 1960s and 1970s, Costa Rica was the worldwide favorite for researchers to investigate biodiversity17. So while the treasures of the country were an open secret to enthusiast’s of nature’s beauty, the appeal had yet to reach the mainstream. In turn, these researchers brought institutes and funding before the 1980s, when the table was set for foreign investment.
Simply put, there was low supply and demand in terms of international tourists, especially from the United States. By 1990, only 4.5% of US citizens owned a passport.18 While US international tourism did not take off until the 1980s, Costa Rica had prepared for accommodations with tax-related legislation, called the Tourism Incentive Law.19 Costa Rica was one of the first countries in Latin America to do so, and the Dominican Republic, Honduras and Nicaragua soon followed suit.
In order to contextualize the current state of tourism in Costa Rica, the author of this paper decided to put his Qualtrics access to ample use. The author has no conflicting interests.
Respondents were recruited from a crowdsourcing site and were paid the recommended minimum wage for the United States. As the task was estimated to last 10 minutes, the prevailing price was 75 cents. Surveys were conducted via Qualtrics and passed through Copyscape. In order to substantiate the claims provided by research subjects, the workflow required an upload of a de-identified US Passport. The image of the passport was held server-side, so any breach directly involve a third-party (this service is used by many research institutions for Institutionally
Reviewed programs). Only 200 inputs are available of the data set and reflect common wisdom in the matter – people that visit Costa Rica like their experiences so much they tell other people.
Here is an example:
Why did you choose Costa Rica? “I visitted [sic] costa rica because a fishing buddy of mine told me it was cheap and the beaches were nice. You can see a doctor for $15 and the weather is beautiful”
Do you plan on going back? “Yes.”
Would you recommend to a friend? “Yes.”
90 articles and connecting words were excluded from the data set (and the word “vacat ion”), with the highest frequency being “beach” (8), and 33 respondents completed the survey.
Five were excluded (1 IP discrepancy, 4 incorrect documents). These stop words were removed in Python from a heuristic developed by Turkel and Crymble.20 So overall, the sentiment expressed in longer-form surveys is expressed in a brief targeted sample (mainly older adults in the United States (forced geo-targeting), demographic information was not included to in the interest of time/pay rates for respondents.
According to more robust qualitative analyses, tourists desire low prices, better in-country transportation and low-entrance fees for the main attractions. The pattern emerges of low-cost travel. Paradoxically, many of those reporting these desires have higher median incomes than their North American counterparts. These tourism requests are similar to native Costa Ricans, as they were surveyed in concert.21
Both an increase of tourism and agriculture decrease indigence to a similar weight; the problem is magnified during the time periods in which Costa Rica lacks either of the two simultaneously. Now, the economy mostly focused on tourism has supplanted the jobs provided by subsistence agricultural economy. However, the flow of capital is not necessarily reversible if the tourism boon wanes.22 Costa Rican men are okay with tourism profits going towards foreign entities because it is an easier job than agricultural work23. Echoing the sentiment the present paper synthesized – ecotourism workers believe it is word of mouth having the most impact.
While the statistics bear out parity, the perception on the ground from employees in the working class exhibit a different picture. Ecotourism is widely perceived as the best available employment opportunity for the majority of respondents in a structured interview. In addition to entry-level opportunities, Costa Ricans strenuously believe they are empowered to start their own business within the service industry.24 Given the growth rate of 10% in 2016 (surpassing 3 million visitors per annum), this would take a worldwide catastrophic event like a global recession or 9/11 to reoccur. In fact, this is exactly what happened, travel went down that winter quarter 200125, but has risen every quarter measured since then.
The source of funds for promoting tourism are derived from airport fees. Although this practice is not uncommon, the Costa Rican Ministry of Tourism has to balance this influx of cash with attracting new carriers that balk at the rate, a delicate proposition. This government entity collects $29 per person in exit fees alone (assuming 2/3rds leave yearly by air, at least $60 million USD yearly26) from its main airport in San Jose, not inclusive of the international airports now located in Liberia. The budget for tourism advertising per se is distributed in a competitive bidding process annually (or more frequently as requested by the board). While tourism is quite robust by air, those wishing to travel via the Pan American highway are presented with significant challenges, especially since Costa Rica is the penultimate destination on this thoroughfare, with several lengthy border checkpoints and restrictions on importation of cars and the requisite insurance.27
If one were to choose a singular factor in the development of tourism of Costa Rica, the answer would surprise many: higher education. The state-run public educational institutions aggressively recruited college exchange programs as early as the 1950s28, a rare phenomena for Latin America at the time. The sources for this reference are not diverse but the insight follows given that higher education would be reflective of global country improvement.
Some critics pointedly suggest that ecotourism is simply a moniker for regular tourism,
and does not have much empirical basis.29 The most generous analyses do indicate qualitative tradeoffs, and suggest investment capital generated in other areas.30 A hypothetical scenario suggests an environmental equilibrium in select situations. For instance, a visitor’s trip to Costa Rica out of Miami for three weeks has a minimum impact on the environment, if they begin to live as the locals.31 This calculation is flawed for a myriad of reasons established throughout this paper and listed off the cuff: 1) they do not live as locals 2) locals do not travel as much to protected areas 3) only 1/5th of these visitors are from Florida, let alone Miami and 4) generally speaking, Americans spend 11 days not 3 weeks.
“Costa Rica Ecotourism” is the dominant search term for Costa Rica-associated searches both worldwide and in the United States32. Low competition in the arena of Costa Rica tourism include “things to do in Costa Rica” as well as “places to visit in costa rica”, the cost being three times less than the keyword “costa rica adventure tours”. While the keyword “Costa Rica” and “Guatemala” demand similar advertising costs as of 2017, the difference comes to the fore when the keyword “tours” is added, making the cost difference about $4 per click. This means for every click of “Costa Rica Tour” costs the advertiser almost $6. The conversion rate for the travel industry is a bare minimum of 0.5%, with an upper threshold of 3%. “Costa Rica Holiday” is a low-cost target, because Americans tend to use the term “vacation” instead.
One strategy is to attract big spenders and not the traditional college students looking for a budget on holiday. Common wisdom suggest these travelers are one-off and will travel on a budget, while adults in an older demographic will return multiple times. The average American tourist spends about $1000 per person, while each Chinese customer spends about $7,000 USD.33 Another potential tourist target with the term “holiday” is Europeans, as they spend on average 17 days in Costa Rica.34 China is on top of spending in other countries (particularly) the United States, even when ranking only fifth in arrivals.35
While ecotourism literature dominates this paper, in reality it is a small portion of Costa Rica’s economy as a whole. In fact, both coffee and banana export alone are more important than the tourism sector.36 Because of the intrinsic stability of Costa Rica, it is the de facto intellectual paragon of Central America and as a result attracts human capital in the financial services and education sectors. 37
Some of this may explain the rising costs of Costa Rica as a function of simple supply and demand, but the Costa Rican government attributes it to inflation and a high cost of petroleum. It is not unreasonable to suggest the premium traveling audience of Costa Rica requires premium goods and services. The inherent problem with the current model is that Costa Rica no longer has the monopoly on stability. While it is still widely regarded as the safest country to visit, the rising tide of every country offers a similar experience at a lower cost. In addition to supply and demand, Costa Rica has a more robust union system than other Central American nations38, and at least some of these costs are deferred to visitors.
The best audience for targeting Costa Rica travel is elderly, educated Americans living in Florida. Floridians represent 16% of the United States population yet are 21% of the arrivals.39 82% of appropriate age visitors have college degrees or higher, with second-time visitors returning an average of eight times. As of 2017, the ideal advertising venue in the United States would have to be Facebook ads because of the demographic shift40 towards a higher-age demographic in the United States.
Note a spike in Google Trends during the time period of university spring breaks or Easter.
It is imperative to note that it is difficult to keep a static line of people’s desires when they visit Costa Rica, some want to have a honeymoon or other less known sectors (sex tourism, medical tourism and technically illegal but perspicuous drug or party tourism). Like the talk about indigenous West African people’s from a male colonial perspective (for example, the allure of a bare-breasted woman in public41), the Costa Rican as observed to be more exotic and sexual than a European Caucasian.
Solidifying these perceptions are reports from Costa Rican tour guides as well as interviews of Costa Rican travelers.42 The original intent of the thesis was to ascertain if women visit Costa Rica for sex tourism or a slightly less racy analogy, pseudo-prostitution. The majority of the paper is a little informal – “He and Karla stayed out together and kissed for the first time that night. A couple of the women jokingly asked Francisco to take us to a motel and ‘give each of us a turn with him.”
While prostitution is legal in Costa Rica, and people do travel there for this purpose, it is not highly visible. In 2012, Costa Rica law made marketing and promoting this fact a law. An American ex-patriate was convicted (and had his later has his judgement vacated)43 of promoting sex tourism via his website.
The message was clear: the Costa Rican government wants to be perceived solely eco-tourism destination. The rationale could also be two-pronged – Costa Rica wants to attract big brands for factories and the white-collar employment they procure, and not just nameless investment groups for hotel development. The Institute of Tourism prefers a balance of tourists families and young single women, groups that would spend more and return, as described earlier. The other is to discourage the niche of child prostitution, as international reports have surfaced.44
In order to improve the agility of eco-tourism from cruise ships, the tourism bureau will need to find ways to get disembarked passengers to the profitable eco-tourist hotspots quickly. Costa Rica’s inability to keep up with modern highway systems in even the most traveled locales makes trips during disembarkation difficult. The ports available are not conducive to deep ecotourism, but passengers frequently do organized activities like canopy tours etc. But this represents about 6% of the total passengers on the ship with the remainder averaging about $30 on-shore expenditures.45 The port is in Puntarenas disembarks in an area akin to an airport, with souvenirs and restrooms. In a cost-benefit analysis, not much value exists spending money to attract cruise ship passengers – 33% of people do not leave the boat at all.46
The most reliable economic overview indicates protected forest in Costa Rica does have a net negative effect (lowering) on poverty levels around these zones.47 More specifically, the jobs provided by ecotourism in the surrounding locale would be matched by the equivalent resource extraction.48 Of course, the former is more sustainable in a vacuum, but ecotourism has some detrimental impact on the environment, and further more detailed reading is available been written attempting to reconcile these opposed interests.49 As a simple intuitive example, the widening of a highway to accommodate said tourist.
Costa Rica’s Ministry of Tourism can be a little on the disingenuous side when discussing its arrivals, given that any international arrival is as tourism, making data extraction tenuous (bulletins are also released in Spanish, not English). The International Medical Tourism Journal (IMTJ) has countered these numbers, saying they are logistically and arithmetically impossible given the amount of healthcare facilities in Costa Rica.50 Instead, it takes interview data from the clinics themselves. At first glance, one might wonder the motives behind IMTJ’s repudiation of these statistics. Are they a competing medical tourism organization? As far as research about the company is concerned, it appears they are interested in having accurate information to sell to other industries. Data here are vulnerable to a limitation of sources, which essentially amount to what Costa Rica’s Tourism Bureau says and almost nothing else, filtered through many variants of what amounts to a public relations release web sites.
One neglected niche in this paper is business tourism, as it does not represent a large portion of arrivals. Due to its tropical locale and accessibility, coupled with its modern amenities and safety, Costa Rica does present a unique opportunity for conferences and business travel. This niche has significant competition by Caribbean nations, located even more proximal to the United States; these nations rely almost entirely on tourism for their revenue. This travel represents about 1.2% of the Costa Rican GDP51. According to Knoema, Costa Rica is ranked 61st in business travel52, which is very close to its overall tourism and regulation friendly score. The data from this may not be subject to extrapolation, as the number one rank is a surprising Botswana.
Costa Rica clearly recognizes the massive benefits of tourism to its shores. The main thrust of their economic development includes keeping the tourism numbers at a stable growth rate and using that investment to attract other businesses as a safety net, and this hinges on foreign investment in other sectors, which is developing steadily but slowly. Costa Rica can afford to be a cradle of growth, and the eco-tourism sector allows it to be the most business friendly country in Costa Rica in terms of regulatory expedition.53
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9 Staley, Todd, and Katherine Stanley. 2017. “Costa Rica’s New Tourism Minister Talks About Marketing The Future”. Ticotimes.Net. Accessed October 26, 2017. http://www.ticotimes.net/2011/05/27/costa-rica-s-new-tourism-minister-talks-about-marketing-the-future.
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19 Miller, Andrew P. Ecotourism Development in Costa Rica: The Search for Oro Verde. Lexington Books, 2012. p. 85.
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22 Vanegas, Manuel, William Gartner, and Benjamin Senauer. “Tourism and Poverty Reduction: An Economic Sector Analysis for Costa Rica and Nicaragua.” Tourism Economics 21, no. 1 (February 1, 2015): 159–82. doi:10.5367/te.2014.0442.
24 Hunt, Carter A., William H. Durham, Laura Driscoll, and Martha Honey. “Can Ecotourism Deliver Real Economic, Social, and Environmental Benefits? A Study of the Osa Peninsula, Costa Rica.” Journal of Sustainable Tourism 23, no. 3 (March 16, 2015): 339–57. doi:10.1080/09669582.2014.965176.
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28 Hill, Carol. “The Paradox of Tourism in Costa Rica.” Cultural Survival Quarterly. March 1990. Accessed November 13, 2017. https://www.culturalsurvival.org/publications/cultural-survival-quarterly/paradox-tourism-costa-rica.
29 Hunt, Carter A., William H. Durham, Laura Driscoll, and Martha Honey. “Can Ecotourism Deliver Real Economic, Social, and Environmental Benefits? A Study of the Osa Peninsula, Costa Rica.” Journal of Sustainable Tourism 23, no. 3 (March 16, 2015): 339–57. https://doi.org/10.1080/09669582.2014.965176.
30 Koens, Jacobus Franciscus, Carel Dieperink, and Miriam Miranda. “Ecotourism as a Development Strategy: Experiences from Costa Rica.” Environment, Development and Sustainability 11, no. 6 (December 2009): 1225–37. https://doi.org/10.1007/s10668-009-9214-3.
31 LePree, Joshua. “Certifying sustainability: The efficacy of Costa Rica’s certification for sustainable tourism.” Florida Atlantic Comparative Studies Journal 11 (2008-2009), 57-78.
32 Google Trends.
33 Lopez, Jaime. “Chinese Tourists Spend More Than North Americans in Costa Rica.” The Costa Rica Star. 2017. Accessed November 12, 2017. http://news.co.cr/chinese-tourists-spend-more-than-north-americans-in-costa-rica/44119/.
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35 Weihua, Chen. “Chinese Tourists Spend Most In US”. 2017. Usa.Chinadaily.Com.Cn. Accessed November 12, 2017. http://usa.chinadaily.com.cn/us/2017-08/14/content_30586607.htm.
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41 Wallace-Sanders, Kimberly. Skin Deep, Spirit Strong: The Black Female Body in American Culture. University of Michigan Press, 2002.
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46 Seidl, Andrew, Fiorella Giuliano, Lawrence Pratt, Rene Castro and Ana Maria Majano. “Cruise tourism and community economic development in Central. America and the Caribbean: The Case of Costa Rica.” (September 2005). The Latin American Center for Competitiveness and Sustainable Development (INCAE). Accessed November 13, 2017. https://pdfs.semanticscholar.org/40de/14e274bf13ca9aa20826acaba05bc2ac159e.pdf
47 Ferraro, Paul J., Merlin M. Hanauer, and Katharine R. E. Sims. “Conditions Associated with Protected Area Success in Conservation and Poverty Reduction.” Proceedings of the National Academy of Sciences of the United States of America 108, no. 34 (August 23, 2011): 13913–18. https://doi.org/10.1073/pnas.1011529108.
48 Hanauer, Merlin M., and Gustavo Canavire-Bacarreza. “Implications of Heterogeneous Impacts of Protected Areas on Deforestation and Poverty.” Philosophical Transactions of the Royal Society of London. Series B, Biological Sciences 370, no. 1681 (November 5, 2015). https://doi.org/10.1098/rstb.2014.0272.
49 Büscher, Bram, and Veronica Davidov. The Ecotourism-Extraction Nexus: Political Economies and Rural Realities of (un)Comfortable Bedfellows. Routledge, 2013.
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53 World Bank. “Ease Of Doing Business Index (1=Most Business-Friendly Regulations) | Data”. 2017. Data.Worldbank.Org. https://data.worldbank.org/indicator/IC.BUS.EASE.XQ?yaear_high_desc=false.