The exchange rate of the dollar in Costa Rica has fallen to its lowest level since 2005, prompting alarms within the tourism industry as the peak season approaches. Data from the Central Bank of Costa Rica reveals that the dollar was traded at ¢488 this morning, a significant drop that is impacting profits for businesses that rely heavily on foreign visitors.
Over the last four days, the exchange rate dipped by ¢5.61, continuing a worrisome trend that has raised concerns among exporters and tourism operators. Since mid-2022, the colon has appreciated nearly 27 percent against the dollar, when rates exceeded ¢640. As a result, Costa Rica has become less affordable for tourists from the United States and Europe, who receive fewer colones per dollar exchanged.
Tourism leaders indicate that this reduced exchange rate intensifies pre-existing challenges facing the sector. The National Chamber of Tourism (CANATUR) has pointed out how it disrupts operations and undermines competitiveness. According to Shirley Calvo, the executive director of CANATUR, tourism companies face increased costs during peak periods for salaries, utilities, maintenance, and supplies—all of which are priced in colones—while most of their revenue is in dollars.
“This creates a financial gap that threatens stability,” Calvo remarked. She emphasized that many do not recognize the industry’s landscape, where 85 percent of businesses are micro, small, or medium-sized enterprises. These companies play vital roles in providing employment throughout communities, from the beaches of Guanacaste to the cloud forests of Monteverde.
CANATUR asserts that the current exchange rate makes Costa Rica more expensive compared to competing destinations like Mexico, the Dominican Republic, Colombia, and Panama. Tourists seeking value often opt for these alternatives, resulting in fewer bookings. Recent statistics indicate a 2.1 percent decline in air arrivals from January to August this year compared to 2024, with February alone experiencing a 7 percent drop.
The Costa Rican Chamber of Hotels shares these concerns. Flora Ayub, its executive director, highlighted the additional strain from rising operational costs, public safety challenges, poor road conditions, and delays in infrastructure projects. “The current rate reduces our margins at a critical time,” Ayub stated. Security alerts from countries like the United States and Canada have added to the deterrents for potential visitors, further exacerbating economic challenges.
Tourism is a crucial economic engine for Costa Rica, supporting thousands of jobs and local development. While the industry saw a rebound in arrivals last year, 75 percent of businesses reported decreased earnings due to similar currency pressures, raising fears of job losses, especially in rural areas where employment alternatives are limited.
Exporters are facing akin challenges, with the current rate nearly 20 percent lower than the decade’s average of ¢598. Víctor Pérez from the Chamber of Exporters has urged the Central Bank to consider a downward adjustment of its policy rate in the upcoming meeting to alleviate some of the burdens faced by businesses. As the high season approaches, industry groups continue to advocate for measures to support and stabilize the tourism sector.
The ongoing debate regarding the exchange rate is crucial, and stakeholders stress that tourism’s significance to the economy requires urgent attention to these mounting challenges. Meanwhile, businesses are adapting by tightening expenses and exploring new strategies to attract budget-conscious travelers, showcasing resilience amidst these economic pressures.