100-SD analyses the market positioning and sustainability of Costa Rica as a tourist destination

"The Chinese use two brush strokes to write the word 'crisis.' One brush stroke stands for danger; the other for opportunity. In a crisis, be aware of the danger - but recognize the opportunity."
John F. Kennedy (1917 - 1963), Speech in Indianapolis, April 12, 1959

As part of our professional activities, we recently updated a market study that100SD (ww.facebook.com/sustainable.developers) performed for one of its clients two years ago. Considering the amount of conflicting data and opinions in the local market today, an unbiased update was requested. On one hand, we have market participants and authorities declaring that the worse of the tourism crisis is over, and we are on the way to recovery; on the other hand, we have some hoteliers in Costa Rica requesting a declaration of emergency for the industry. Our visits with clients in different regions of the country have indicated that, in fact, things are getting better; but we have also have noticed that some operations remain in troublesome situations.

Therefore, in order to determine the overall current state of the industry and Costa Rica’s position in the international market (as a world-class destination), we decided to analyse the existing data published by internationally renowned sources. The following are excerpts of the findings of this study, which our client kindly allowed us to share with the rest of our clients and friends in the market:

According to the United Nations World Tourism Organization (UNWTO), Tourism continues to be one of the strongest industries in the world. “The business volume it generates equals or even surpasses that of oil exports, food products or automobiles.” The UNWTO World Tourism Barometer 2011 states that:

1)    International tourist arrivals grew by close to 5% during the first months of 2011, consolidating the 7% rebound registered in 2010.

2)    It was confirmed that in recovery years, arrivals tend to pick up faster than receipts.

3)    Growth of international tourist arrivals worldwide for January and February 2011 is estimated to have reached 4.7%.

4)    Growth in the Americas overall was 5% (equal to world average).

5)     Worldwide international tourist arrivals surpassed 124 million in the first two months of 2011, with emerging economies growing (6%) at a faster pace than developed economies.

6)     Asian Pacific grew at 6%, Europe presented better than expected results (6%) thanks to the recovery of Central and Eastern Europe.

7)     North Africa (-9%) and Middle East (-10%) presented bad results due to political developments in the area.

8)     The Americas were in line with the world average (5%), with stronger results for the Caribbean (6%) and South America (15%)

9)     North America (1%) and Central America (with the exception of Costa Rica) presented weaker results (3%).

According to the Costa Rican Board of Tourism (ICT), during the first quarter 2011 Costa Rica reached a 7.8% growth in tourism, reaching its own 10 year growth average 7.1%, and surpassing (as it has done during the past 10 years) the world average.

The statistics show that the only destination in the world that surpassed Costa Rica’s tourism growth (7.8%) was South America. That is to say, while Costa Rica as a destination is second to South America, it surpassed all other international destinations’ regional averages. The country´s tourism growth rate is almost 8 times that of North America, and more than twice the average for Central America.

Costa Rica does compete with other countries in the tourism market. However due to its geographic location, its direct competitors are Mexico, other Central American countries, and the Caribbean, and to a lesser extend (due to the travel distance and product offering) South America.


1)    The Center for Responsible Travel (CREST 2010) estimates that sustainable tourism captures $77 billion of the global market and experiencing double-digit gains that are likely to accelerate as concern about global warming rises.

2)    CREST also reports “sustainable tourism could grow to 25% of the world’s travel market by 2012, taking the value of the sector to approximately $473 billion a year.”

3)    In March 2011, the UNEP Green Economy Report stated that  “While the growth of tourism has been accompanied by significant challenges, for instance, in terms of GHG emissions, water consumption, discharge of untreated water, waste generation, damage to local terrestrial and marine biodiversity, and threats to the survival of local cultures and traditions tourists are driving the greening of the sector, as seen by the 20% annual growth rate enjoyed by ecotourism; about six times the industry wide rate of growth.”

Most analysts who specialized in the subject agree that eco tourism is becoming mainstream, thanks to the growing environmental concerns around the world, which is permeating all levels of society; therefore, eco tourism is becoming (according to the UNWTO) “the fastest growing market in the tourism industry”.

The recovery of Costa Rica’s tourism market is not an anomaly, but rather the result of the work performed by ICT (Costa Rican Tourism Board), which has worked for over 20 years to position the country as a prime eco destination worldwide. Although, some analyst predicted that Costa Rica would recover slowly due its dependency on American tourist, ICT’s efforts in South America and Europe have paid off. Therefore over the last few years, not only has the overall number of American tourist grown, but also the number of European and South American visitors.

According to the information made public by ICT in May 2011, the number of tourists who visit Costa Rica every year is equal to roughly half the country’s population, and the number of visitors continues to rise. “2.1 million tourists enjoyed Costa Rica vacations in 2010, 9.2% more than in 2009. These tourist arrivals generated a total of more than 2.1 billion dollars, with an average spending of $1,000 per tourist contributing to the equivalent of 6% of the country’s gross domestic product (GDP). These statistics demonstrate that Costa Rica is amongst the best performers when it comes to the worldwide recovery of the tourism industry.”

A key factor in the recovery has been the positioning of the country in the global market, as well as the Costa Rican commitment to sustainable tourism. ICT spends millions of dollars promoting the country’s image as a sustainable destination through cooperative campaigns with airlines, wholesalers and international trade shows.

According to World Travel Market, ICT’s Sustainable Tourism Program is key to the long-term growth of Costa Rica. The certification system was created with “the objective of implementing measures to help achieve tourism development with less impact on the environment, guaranteed quality services and sustainable growth.” This is a permanent program that seeks to promote long-term sustainable growth and development in the travel and tourism industry.

As of today the program has certified more than 161 hotels and 54 tour operations that have chosen to adapt their operations to fit a sustainable tourism business model. International hotels chains have also assumed the sustainability model in Costa Rica; Ramada, Hilton, Holiday Inn, Four Seasons, Best Western, Radisson, and Marriot are some of the names that have made the necessary adjustments to obtain the CST.

The work performed by ICT has produced great levels of international recognitions and market positioning, which should help to explain why Costa Rica as a product is different than the rest of its competitors, for instance:

1)    FUTUREBRAND: Costa Rica is the Latin American country that has the best destination brand positioning, according to a 2010 brand report prepared by the international consulting firm, FutureBrand. The report stated that “Costa Rica’s marketing slogan, ‘No Artificial Ingredients,’ created by the Costa Rica Tourism Board (ICT) came in first place in Latin America and ranked twenty-seventh among 110 countries evaluated.”

2)    International Business Times, ranked Costa Rica first on its list of most popular adventure tourism destinations. 2011.

3)    International Business Times, ranked Costa Rica first on its “Top 10” preferred destinations where newly-weds have chosen to spend their honeymoons. 2011.

4)    IBTraveler, “Top 10” most beautiful beach destination “Santa Elena.” 2011.

5)    IBTraveler, ranked Costa Rica as the second best Yoga Vacation. 2011.

6)    Travel advisors at Virtuoso, ranked Costa Rica first on its “Top Ten” list of most popular adventure travel destinations for 2011.

7)    TripAdvisor ranked Costa Rica fifth of the “Top 10” resort countries in the world. 2011.

8)    TripAdvisor ranked Costa Rica fifth of the “Top 10” adventure travel destinations for whitewater rafting.

9)    TripAdvisor ranked Costa Rica fourth of the “Top 10” most popular family travel destinations for 2011.

10) Ethical Traveler ranked Costa Rica among the “Top 10” Ethical Destinations for 2011.

11) Eroski Consumer: “Costa Rica ranks third as one of the most ecological countries in the world.”

12) Travel + Leisure declared Costa Rica as Best Place to Visit Solo, 2010: “The country that came out as the safest and happiest in the world turned out to be the place where many Americans came to experience adventure tourism for the first time.”

13)  According to the World Economic Forum’s Travel and Tourism Competitive Report 2011:

a.     “Costa Rica is ranked 5th in the region and 44th overall. The country gets excellent marks for its natural resources (ranked 6th), with several World Heritage sites, a high percentage of nationally protected areas, and its very diverse fauna. Given the importance of the natural environment for the country’s tourism industry, it is notable that it ranks a high 25th overall for environmental sustainability, an area where it has continued to improve over the past few years.

b.     The country is second in Latin America, surpassed as a competitive destination only by Mexico.

c.      Costa Rica ranks 1st in Latin America (Mexico, Central and South America) and 17th in the world in Sustainability of the Tourism & Travel Industry.

d.     The country 1st in the continent (North, Central, South America, and the Antilles), and 13th in the world in Government Prioritization of Travel and Tourism Industry.

e.      In the issue of Effectiveness of Marketing Branding, Costa Rica is #3 in the continent, and 14th in the world.

f.       The country ranks 1st in the continent and 6th in the world in Extension of Business Trip Recommended.

g.     Costa Rica is #2 in Latin America and #25 in the world in Quality of Nature and Environment, only surpassed by Uruguay.

h.     Costa Rica ranks #2 in Latin America and #24 in the world in Government Expenditure in Travel and Tourism.

14) According to the World Economic Forum’s Competitive Report 2011:

a.     Costa Rica ranks 3rd in Latina America, surpassed only by Chile and Brazil in reliance of professional management.

b.     The country is 2nd, surpassed only by Chile in local supplier quality.


In view of the aforementioned findings (third party evidence), it is possible to conclude that:

1.     Costa Rica continues to be a strong competitor in the international tourism market, and despite the recent crisis, the country’s image is very positive and attractive for international visitors and investors.

2.     UNWTO’s finding “that in recovery years, arrivals tend to pick up faster than receipts”, helps to explain why the country has experienced a very satisfactory growth rate in the number of visitors, but also why tourists are spending less than in the past.

3.     While we expect that the number of visitors will continue to grow, local operators will have to wait until the international economy gets better in order to see visitors spend the amount of money (per capita) they did in the past.

These findings confirm our observations during the visits we made to hotels and tour operators in the last year. However, we have also seen managers and personnel (of hotels with a great product) paralyzed by a situation they never expected to face; an international crisis that revealed the specific weaknesses of many operations. For some, their weakness is related to the cost structure of the operation, for others are related to a dependency on the gains obtained because of the depreciation of the colon against the dollar. However for most operators, their weaknesses are tied to their marketing strategies, their refusal to certify their sustainable practices, or even their lack of experience in facing a changing market; a market that each day becomes more oriented to sustainable tourism and less attracted to conspicuous consumption and overt luxury.

Therefore, we believe the keys to success in the short term are:

a.     The self-analysis of each operation (especially the ones still in trouble) with the objective to discover what are the specific weaknesses that still represent a threat to the operation.

b.     Proceed to implement strategies related to:

i.     The refinement of the marketing and booking tactics implemented by each individual tourist operation.

ii.     The restructure of operational costs through management adjustments and sustainable practices.

iii.     The achievement of sustainable competitive advantages, specific to each operator, through product differentiation and the certification of sustainable practices.

We hope the data presented here will help our friends in the market analyse their own competitiveness in light of the latest relevant information. It is time to stop being paralyzed by a crisis that is already over, and start taking actions to make each operation profitable. By implementing tactics and strategies that fit the current market reality, hotels and tour operations can mitigate their weaknesses and discover new opportunities as well as strengths.

Source / Fuente: http://www.facebook.com/sustainable.developers

Author / Autor: Jorge Segura, Teresa Bueno

 Date / Fecha: 06/07/11

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