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The recently opened Waldorf Astoria Costa Rica Punta Cacique – Image Credit Hilton
Costa Rica’s hotel industry has experienced fluctuating performance trends, with high-end resorts outperforming other segments, influenced by a shift in traveler demographics and a reliance on American tourists.
Over the past five years, Costa Rica’s hotel industry has mirrored trends observed in other leisure destinations popular with American tourists. High-end hotels and resort areas have shown robust performance, while mid-range and budget accommodations have experienced stagnation. This pattern is consistent with global trends, where luxury hotels are outpacing their lower-end counterparts in terms of growth.
Comparison with the Caribbean
Before the pandemic, Costa Rica’s hotel performance closely resembled that of the Caribbean, with similar growth patterns in occupancy and average daily rate (ADR). This trend continued into the initial post-pandemic recovery, with both regions stabilizing in occupancy by 2023. However, a divergence occurred in ADR trends. While the Caribbean reached record-high ADRs, Costa Rica saw a decline from its 2023 peak. This difference is partly due to the Caribbean’s higher proportion of luxury hotels, which have driven its ADR growth.
Impact of Traveler Demographics
The composition of international travelers to Costa Rica has shifted, influencing hotel performance. The total number of inbound international travelers remains below 2019 levels, but there has been an increase in American tourists. Conversely, there has been a decrease in travelers from other Central American countries, who often combined business and leisure travel across various hotel price points.
U.S. travelers predominantly visit for leisure, opting for resort areas and high-end hotels. This trend has led to growth in regions like Guanacaste, known for its upscale accommodations. In contrast, San Jose, the capital city, has struggled to recover, with revenue per available room (RevPAR) still below 2019 levels.
Recent Trends and Future Outlook
As of 2025, occupancy rates across Costa Rica have softened, even in areas benefiting from American tourism. Additionally, recent months have seen slight declines in room rates, marking the first decreases since the end of 2023. These declines are notable as they occur during a typically strong performance period, particularly in June and July.
Costa Rica’s increased reliance on U.S. tourists makes it vulnerable to fluctuations in American travel demand. However, there is potential for growth from European and Canadian markets, which could mitigate the impact of any slowdown in U.S. demand. Should international inbound demand decrease, a downstream effect on ADR is expected, with less demand concentrated in high-end, resort areas.
Costa Rica’s hotel industry faces challenges and opportunities as it navigates changing traveler demographics and economic conditions. While high-end hotels continue to perform well, the industry must adapt to shifts in international travel patterns to sustain growth. By diversifying its tourist base and attracting visitors from Europe and Canada, Costa Rica can bolster its hotel sector against potential downturns in American travel demand.
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