Hotel chamber asks that line be held on exchange rate

The Instituto Costarricense de Turismo has a Web
page with this and special tourism offers, but
the Alexa rank is lower than 1.7 million, meaning
hardly anyone is seeing it.

The Costa Rican hotel chamber painted a grim picture Monday as it urged the legislature to prevent so-called speculative capital from depressing the value of the dollar further against the colon.

The chamber, the Cámara Costarricense de Hoteles, also urged more stability in the government and incentives for tourism.

The chamber said that a reduction in the rate of exchange with the dollar from 575 in 2009 to the current 500 colons has cost the industry 14.6 percent of its income. Yet costs have increased, it said, giving these figures:

Goods and services have increased 17 percent, according to the Instituto de Estadística y Censos in the same period. The Banco Central and the Ministerio de Trabajo estimate that salaries are up 22.8 percent. Water has increased 27.6 percent and diesel has gone up 24.95 percent. A new increase in the water rates will mean a 100 percent increase.

The chamber said that the hotel industry has lost 15,000 direct employees due to the economic crisis. There are about 400,000 employees remaining, it said.

Of particular concern is the fear that the Banco Central will stop supporting the value of the dollar in the face of large amounts of speculative dollars entering the country.

President Laura Chinchilla has sent to the legislature a bill that will give the Banco Central the power to put a surcharge on what it sees as short-term speculative money leaving the country. But the lawmakers have not yet acted.

The chamber also said that the blindness of the government has caused the industry to lose its competitive edge in relation to other Latin nations.

The tourism sector has been considered the goose that lays the golden egg, and the income generated from tourism has filtered into the entire economy, it said. But now there are all kinds of obstacles facing hospitality providers, said the chamber.

And some hospitality operators have left the industry, it noted.

The chamber did not mention it, but there have been taxes imposed and increased on tourist travel. The latest is a $1-a-head increase in the $28 exit tax to support foundations and agencies purporting to fight sex tourism.

Although the hotel chamber wants the legislature to pass a law or laws restricting the investment here to take advantage of high interest rates, there is little evidence that the measures in the hopper now will do that. There also is a possibility that imposing restrictions would be a violation of the Central American Free Trade Treaty.

A U.S. Embassy spokesman declined to address that issue last week, saying that diplomats there do not comment on private conversations with Costa Rican officials or on pending legislation.

However, an article in the free trade treaty seems to prohibit restrictions on investment earnings.

The early party of the last decade was the golden years for Costa Rican tourism. In fact, there were calls for quicker construction of hotels in anticipation of many more tourists. A lot of the hotels that were built are owned by chains, and, as the hotel chamber notes, about 80 percent of its members are small operations.

Even during this high season, few smaller hotels are at capacity.

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