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Tourism in Costa Rica



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    Costa Rica Tourism Analysis

    Costa Rica has a vibrant tourism industry that has overtaken bananas to become the largest foreign exchange earner. The country measuring approximately 52,000 square kilometers has more than two thousand plant species and 300 animal species spread throughout the country’s different topography, wildlife and climate. Protected areas and national parks, which hold diverse flora and fauna, cover 23.4 percent of the total land area of the country. This makes Costa Rica the country with the largest conservancy areas in relation to its total land area.

                Costa Rica’s small land mass not withstanding, the country is home to 5 percent of the world’s diverse biological species (Hickman, L., 2007).  In addition to the various ecosystems, the country has varied terrain, beaches on both the Caribbean and Pacific coasts and has several volcano mountains.  Combined, all these factors attract at least 2 million tourists annually, making the country among those that have the highest tourism rates in the world. Consequently, the country earns more than $1.6 billion from this sector.

                 The secret to Costa Rica’s success in tourism however not only lies in the diverse ecology, but also in several other factors like government policies and the political stability of the country.  As a developing country, Costa Rica has become a symbol of political stability. This fact comes from its history as an anti-militarism country that upholds political pluralism, social justice and economic democracy (Reding, A., 1986).

                The Government realized the important role that the tourism played in the development of the country and hence put viable policies to ensure that nothing compromises the sector’s integrity. In 1984, legislation was passed that provided incentives to the hotel industry, car rentals, travel agencies and the transport sector.   In 1985, tourism related developments were given tax breaks among other incentives. This included a 12 year tax moratorium that was applicable to investors who ventured in new tourism projects (Honey, M, 2008).  This led to an increase in hotels from 4,866 officially registered rooms in 1985 to 12,000. In 1987, the Costa Rican Government embarked on a campaign that sought to attract both local and foreign investors to investing in luxurious tourism resorts at which point they engaged the services of USAID.  The incentives were however wiped out by 2001, when the government was confident that enough development had taken place to accommodate the majority of foreigners touring the country. The only tax exemption that remained was for the import of raw construction materials aimed at constructing new hotels (Honey, M. 2008).

    Tortuguero National Park, Costa Rica

    In 2006, the government enacted a policy aimed at improving the security around tourism operations in the country. This was in response to the soaring crime rate targeting tourists in the country.  The government had to start training a special police unit whose sole mandate was to protect tourists against crimes. The police men were trained on an array of crimes targeting the tourism industry. Such include forgery detection and criminal analysis. Other areas of training were proper communication skills and map reading (Logan, S., 2007).

                The government’s intervention   was also apparent on the protected tourism areas. In a 2007 world tourism ranking report, the country ranked 12th in regard to strategies employed to protect the natural habitats. It was also placed 17th place world wide for its efforts in developing the tourism sector.  This factored in visa facilitation by the government missions in other countries, the signing of bilateral air agreements with other countries in order to make travel easier for the tourists and policies that encourage foreign investment in the tourism sector (Blanke, J, 2007).

                The travel and competitiveness report however noted that the government has also faired badly in some sectors.  Such include the ports and road infrastructure that tourist use to travel within the country. For this, Costa Rica ranked 93rd. The government did not receive many accolades for the security and the overall safety of tourists as it ranked in 67th position (Blanke, J., 2007). Overall, Costa Rica ranked in the 41 position out of the 124 countries analyzed in the report.

    Positive effects of Tourism in Costa Rica

                 The positive contribution of Costa Rica’s tourism industry is undeniable. Currently, the sector generates 7.5 percent of the overall Gross Domestic Product (GDP) at $659.6 million per year. This is followed by Bananas at $ 633.2 million, Coffee at $417.1 million and beef at $ 43.6 million (Monteverde, M, 2008).  The tourism figure is exclusive of the money generated in airfare.

                In the mid 1980’s, tourism in Costa Rica accounted for 0.8 percent of revenues generated throughout the world, which represented a 9 percent annual growth from the late 1960’s.   Between 1986 and 1994 however, the   growth in tourism earning grew by 14 percent. There was an upward growth from the 3 percent growth registered in 1987 to 8.5 percent registered in 1994.   Consequently, the growth provided livelihoods to 11.7 percent of the country’s active population (UNEP, 2007).

                Tourism has also been a major employment creator in Costa Rica. Directly, it has employed thousands of people in conservancy zones, hotels and the transport industry. Indirectly, the sector stimulates job creations across related sectors.

    Tourist to Costa Rica can purchase vacation packages either through a travel agency based in their home country, operators in Costa Rica or entrepreneurs based in their Costa Rican destinations (Inman, C, et al, 1998).  To access these packages, the local operators, must contact the local investors who then offer their services at a subsidized rate. The operators add a 16 percent mean mark up, before they package the services and then sell to wholesalers, travel agencies or tour operators. This process creates a value adding chain which involves the investors as the main beneficiaries, then the ground operators, who then sell their packages to the travel agents often adding a 50 percent mean mark up. Overall, local entrepreneurs In Costa Rica include the food providers, the hotels, tour guides, airlines and land transport facilitators (Inman,C et al, 1998).

    The growth of the tourism sector has also had major affects in the housing industry. As the economic growth of the country soars from the tourism benefits, villages that were formerly secluded in development are slowly being converted to modern tourism hubs. New housing developments and resorts are sprouting up in many parts of the country in anticipation of the ever growing tourism industry.  Consequently, the government is earning more in taxes, which is later used in infrastructure development (Clanton, W., 2008)

    Factors that led to tourism growth in Costa Rica

    Several things have contributed to the development of the Costa Rican tourism industry. Chief among them is the good image of the country created by several institutions abroad. The good image creates an appeal to tourists whose adventurous nature is only satisfied by traveling to the country.

                Overtime, Costa Rica has developed an image that revolves around environment conservation. It has the largest deforested area in Latin America, in addition to having the highest percentage of land under government protection. Most of the country’s protected areas are accessible to tourists more than even the indigenous people (UNEP, 2007). This strong image portrays the country as a good ecotourism site. This attracts more tourists to the country annually.

                            In view of the benefits accrued from the tourism sector, the government works to expand the tourism sector by attracting more airlines to fly directly to the country. The country targets airlines from the United States and European countries as this are the main source of the country’s tourists (Clanton, W., 2008).

                The Costa Rican experience also plays a major role in ensuring that the country enjoys repeat tourists. In most cases, the tourists want to experience the different tourism sectors of the country. If unable to accomplish this during a single visit, they surely travel back to the country during another holiday. Others cannot have enough of the country’s sites and therefore keep going back (Clanton, W., 2008).

                The country also benefits from its close proximity to the United States, the welcoming nature of its people, pleasant climate and a superior infrastructure that makes visitors communicate and travel easily. In addition, its political stability, impressive human rights record and well functioning democracy improve its ratings as one of the most stable tourism destinations (Honey, M, 2008).

                Tourist activities in Costa Rica are divided into the following segments: ecotourism, sightseeing, Surfing, Canopy tourism, Snorkeling, volcano visits, rafting, beach and waterfront tourism and sport fishing.   The Ministry of Tourism announced in 2007 that it would promote four main forms of tourism: Eco-tourism, Sun/beach/sand, rural based tourism and Adventure tourism.

    Eco tourism in Costa Rica

                Although there is no clear definition of what eco tourism really is, the modern perception alludes to it being some form of responsible tourism that not only takes great joy in natural beauty of the environment but also ensures that there are minimal effects to the environment, natural habitats are conserved and local communities develop from tourism. In Costa Rica, eco tourism is the leading tourism segment, so much that it is the identifying factor for the country. The resolve of the country towards eco-friendly tourism is evident right from the president who in 2007, commissioned the Peace with Nature Initiative- a plan that sought to apply the country’s non-militarism values to the environment sector. Accordingly, the goals of the initiative was to plant 5 million trees annually, steer  the country’s environment conservation tradition to stronger heights and   make  Costa Rica carbon neutral by 2030 (Honey, M.2008)

                According to the 2005 Costa Rican tourism statistics, 61 percent tourist were interested in the country’s national parks, while 66 percent observed the flora and fauna.

    Eco tourism is easily confused with nature based tourism (Primrose, H. 2003). However, unlike nature tourism whose basic description involves the use of nature platform to entertain tourists, eco tourism involves traveling in natural habitats, building environment awareness, respecting local culture and empowering local people on ways to conserve the environment (Primrose, H. 2003).

                Costa Rica offers twelve life zones for the eco-tourism enthusiasts found within the 29 parks and protected areas of the country. Ecotourism is divided into several categories

    Hard eco-tourism: Tourists who visit Costa Rica for hard ecotourism have deep seated interest in nature. Their travel involves camping and strenuous physical escapades. Tourism that falls under this category includes bird watching, botanical trips and nature photography. Such tourists require guides who know their destinations well   and may be deeply education (Baker, C.P, 2008).
    General/Soft ecotourism:  This segment covers tourists who are interested in wildlife observation, hiking among other natural but less taxing activities. This category is less educational and more relaxed (UNEP, 1998).

    Adventure ecotourism: This segment involves adventures that range from moderate to high risk activities. Such include scuba diving, bungee jumping, canoeing, kayaking, sport fishing, whitewater rafting, and wind surfing and snorkeling. Although these activities in this segment do not meet the criteria of using the environment with conservatory, opponents argue that the activities do no harm to the environment.  Since participants in such activities are less concerned about the structure or complexity of the environment, they are required to learn the basics of protecting the outdoor destinations (UNEP, 1998).
    Education Ecotourism:  This segment involves educational trips organized by learning institutions. They may include lecturers or formal talks regarding the environment. On individual levels, a person may take an educational tour when conducting a research (UNEP, 1998). The length of  his/her research will determine  how long he/she stays in Costa Rica

    Canopy Tourism: Faced with rising threats of deforestation as more people try to acquire land for development purposes, Costa Rica has embraced Canopy tourism as a viable way of ensuring that the forest cover in the country is protected. This form of tourism takes place in the rainforest canopy. In this segment, tourists, who mainly consist of 90 percent foreigners- ride on steel cables attached to trees (Seibel, M, 2005).  According to the Costa Rican government, 25 percent of all foreign tourists participate in this form of tourism. In addition, this segment is lucrative and attracts tourists who do not mind spending much on holidays. A three hour tour averages $55 and thus contributes significantly to the overall revenue collected. The canopy tourism is highly unregulated from both the government agencies and environmentalists (Seibel, M, 2005) something that makes analysts questions (the justification of canopy tourism as part of ecotourism).
    The uniqueness of Costa Rica is among the driving forces that raise the demand for the country’s ecotourism (UNEP, 1998). Other things include the country’s level of environmental conservation, the branding of the country’s tourism industry by the government and other stakeholders and the marketing of the country abroad. These factors have succeeded in creating a unique perception of the country in the eyes of tourist thus increasing people who travel to the country.

                Like everything else in a free market economy, an increase in the quality of the ecotourism in response to governments efforts that make the country a better tourist destination, dramatically increased the demand for the same from tourists (UNEP, 1998). A  survey conducted in 1995 by the Costa Rican Institute of Tourism revealed  that  53 percent of tourism rate Costa Rica as excellent, while 40 percent rated the country as  good( ICT, 1995).

          The fact that a tourist is let loose in the ecological habitats to search for the animals they want to see, makes the  experience even more  fulfilling for most tourists and considerably lowers the costs as there is no guide hired , unless one wants to (UNEP, 1998).

    Rural Tourism

    Rural tourism in Costa Rica presents foreigners with a glimpse of the country’s history, culture, unique assets, nature, talents and people. According to the official government website, rural Costa Rica is an authentic tourist attraction that cannot be imitated. As such, rural tourism is pursued by the government as a development tool and as a way of enhancing the country’s identity (Instuto Costarricense de Turismo- ICT, 2008).

    The main target for rural based tourism is to promote local participation in tourism related activities, thus creating equity in the country while also encouraging local investments. Consequently, at least two jobs have been created in most rural Costa Rican households (ICT, 2008.).

    Activities popular in rural tourism include horse riding, agricultural activities, fishing, village festivities and cultural ceremonies and fuses alternative methods that the rural community in Costa Rica uses. Other possibilities that largely depend on the rural location that a tourist decides to pick include sport activities, nature tourism, beaches, adventurous tourism and sun bathing (ICT, 2008).

    At times, rural tourism is offered by organized groups or communities, but individuals are also allowed to host tourists. In the end, the rural communities benefit socially and economically, while the tourist gets to enjoy the advantages that comes from the community dynamics. Overall, the friendliness of the Costa Rican people towards tourists is an added advantage as this draws even more tourists to the country.

    Sun/sand/beaches Tourism

    Costa Rica is endowed with beaches on both the Carribean sea coast and the Pacific Ocean coast. Both sides are suitable for sunbathing. However, the Caribbean beaches offer ideal settings for sport fishing, sunbathing and snorkeling. Beaches on the Pacific side on the other hand offer suitable settings for surfing.

    Adventure tourism

    Adventure tourism in Costa Rica comprises of rafting, snorkeling, surfing, bungee jumping, canopy tourism, bird watching, trekking, volcano climbing, plant, and wildlife watching.

    Cacho Negro Volcano rising out of the clouds blocks the view of Poás from the north
    (photo © R. Krueger-Koplin)

     The Costa Rican culture also offers some adventure for foreign tourists (ICT 2008). The country has a diverse culture that sprouts from the pre-Hispanic natives and other immigrants who have settled in the country overtime. In addition to he Bribri, Maleku, Cabecar, Teribe, Ngobe, Boruca, Chorotega and Huetar tribes, the Chinese, Italians, Hebrews and People with African  descent have made Costa Rica  their home thus  making the country a melting pot of cultures( ICT, 2008)

    Negative effects of the Costa Rican Tourism

                While Costa Rica may be trying harder than any other country to conserve it natural habitats, the country had the highest deforestation rates in 1994(Kutsce, P, 1994).While it total forest cover was at 72 percent in 1950, the same stood at 34 percent in 1985. This was done in order to pave way for development to cater for the growing tourism industry. Another reason for deforestation was cultivation and food production. The impact of logging on the environment is dire. They include soil erosion, silting of rivers, whose capacity to produce hydro electric power is reduced(Tensie, W, 1991).

                There has been wide spread criticism that ecotourism does not live up to it conservation ideals (Farrell, T.A and Marion, J.L. 2001). Even in protected areas in Costa Rica, the nature trails and recreational sites degrade the environment.  A study conducted by Duke University on the effects of ecotourism on birds revealed that the human disturbance, which occurs when thousands of visitors go to the parks, disrupts the birds foraging behavior and reduces the overall habitat (, 2005).

                There has also been allegation of animal exploitation by humans who visitors.  In the Manuel Antonio Forest for example, the squirrel monkeys attracts thousands of visitors annually. In 1992, the statistics suggested that the forest received at least 192,000 visitors a year (Taylor, V.J et al, 1996), a number which could have increased by now.  Apart from the disturbances created by visitors in this park, there have been cases of visitors taunting the monkeys (Taylor, V.J. 1996).  Pat of the park habitat has also been lost to expanded infrastructure, which was done in order to cater for the increasing number of tourists. In addition, capturing monkeys and domesticating them has also been revived and this leads to a decline in the monkey population.

                In part, the government has been blamed for not having good enough policies and penalties to deter environment degradation thus perpetuating the self interests prevalent in Costa Rica’s tourism industry (Taylor, V.J et al, 1996).

                Criticism to the effect that most of the money gained from tourism does not benefit the local communities abounds. Since a significant percentage of investment in the tourism sector comes from foreign investors, most earnings benefit them rather than the local people.  In fact 60 percent of all tourism earnings in Costa Rica  end up with the foreign investors, a sizeable percentage of the remaining 40 percent goes to the government and is sued  to develop tourism related infrastructure, while only 2 percent  of the income  benefits the local communities (Taylor, V.J, 1996).

                Greenwashing- is a term used to describe the practice employed by most Costa Rican tour operators to market their tour packages as eco-friendly. This has also been blamed for the negative impact that tourism has had on the environment. By greenwashing their services, companies mislead tourist to believing that their packages or offers are good for the environment while in reality, the marketing tour company is just using the package as a means of cost cutting.

                The buffer zones created around the protected areas in Costa Rica also deserve as  much conservation, this is not happening (Sanchez-Azofeifa, G.A. et al 2002). There has been reported forest loss in the buffer zones, which serves to expose the protected areas to possible human invasion. Already the buffer zones are being used as development zones.

                While proponents of ecotourism may argue that the practice ensures that Costa Rica earns from tourism while still maintaining it virgin territories within where its forests are held. However, the reality is that packaging wildlife sanctuaries and national parks as green products suitable for eco-tourism does little good to the environment (Kamuaro, O. 2008).

    Costa Ricans are known for their friendliness that they treat foreigners with. Also, other factors like dance, sports and music define their culture. The cultural identity of these people is however under threat especially as more foreigners integrate with the indigenous people.  The  fact that the indigenous people may sooner or later realize that they do not benefit much from tourism, yet their environment  is suffering  as a result of  the increased tourism is also a  factor that may  strain relationships  between the tourists and the indigenous  Costa Ricans in future (Hickman, L. 2008).

                       Indirectly, the fossil fuels and emissions that come from jet fuels as tourists head to their destination are a major source of pollution. The fact that some airlines claim that they have carbon offset schemes does not offer enough remedy to the emission problem. The more tourists traveling to Costa Rica, the more emissions are made to the air (Hickman, L. 2008).

                      Visitor overcapacity is another factor that sector observers believe has overstretched the small country’s capacity. A good example is the Manuela Antonio Park which records an average of 1,000 tourist visitors daily during the peak seasons. Since there is no regulation regarding the inflow of tourists, animal and plant’s life in the park has reduced dramatically. Monkeys have also turned to feeding on garbage (Baez, A. 2002,)

                      In some cases, the profit motive from the tourism industry may override the protection agenda set forth by the government. This is applicable both to the government agencies mandated with regulating the activities in this sector and individual players (Dapin, M.  2001). Because the government agencies are not strict in the regulation standards, they certify profit driven organizations, which do not care much about the environment. There has also been an irresponsible case where tour guides engage in activities that are not eco-friendly (Dapin, 2001).

                         The fact that Costa Rica depends so much on donor funding also undermines the government’s role in the conservation agenda. In 1992 alone, foreign donors provided 77 percent of the overall budget needed for operations in protected areas, where as the government catered for 23 percent only. This invariably undermines the extent that the government can enforce policies without consulting with the financiers (Baez, A. 2002).

                               Costa Rican local workforce may also feel exploited especially because often times they are excluded from major development jobs and only relegated to low income jobs which hold less prospects of career advancement (Garen, E.J, 2000).  The only exception to this is the hotel industry which is mainly owned by Costa Rican nationals. However, some hotels still employ foreigners in top management positions citing the lack of qualified and competent locals to fill the positions (Baez, A. 2002).

                               Although Costa Rica has a long standing record of political stability, the rise in the tourism sector, political instability that may happen in the country, terrorism threats, crime or global recession may trigger a decline in tourism visiting the country. The country’s economy would then take a heavy blow especially now that  tourism earnings have replaced bananas, coffee and beef as the main exchange earner (

                               A final concern that Costa Rica must contend with is how to institute season based tourism. All year round travel as is the case in most parks often affects the routine of animals. This is also an ideal way of ensuring minimal environment degradation in the country (Cater, E, and Lowman, G, 1994).


                               There is no doubt that tourism plays a major role in the economic development of Costa Rica. When the negative and positive effects are considered, the conclusion would be that the positive aspects override the negative effects. Costa Rica is doing better than other countries in combining the economic aspect of tourism with the conservation aspect (Wight, P.A, 2002).

                               The classification of Costa Rican tourism by the government has also played a major role in ensuring that every aspect of the tourism sector is monitored and any change in trends documented. This is not only good for statistical reason, but also for the purposes of monitoring environment conservancy practices or lack of them. It is true that the government has and will still have problems reconciling the rising demand for tourism in this country with the environment ideals that upholds sustainable tourism. To address this, the government will have to device ways to balance the two.

                               Rural tourism is a concept that if embrace by majority Costa Rican nationals can help diffuse the profits made in the tourism sector from the big investors to the ordinary local people who have for a long time missed out on the benefits that come from the sector.  Tourism earnings from rural tourism will no doubt increase in coming years especially as the development space in urban areas runs out and the infrastructure in the rural areas develops. Overall, the tough choices that the Costa Rican government has to make towards profitability and environment conservation are well worth the economic gains.


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    Tourism in Costa Rica. (2016, Aug 15). Retrieved from

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