INTERNATIONAL REPORT – New research from STR suggests recent
hotel performance in Costa Rica resembles other leisure destinations frequented
by Americans. Specifically, luxury outperforms.
STR’s Hannah Smith said that pre-2020, Costa Rica closely mirrored hotel performance in
the Caribbean, with similar patterns and levels of growth. This continued in
the initial post-pandemic recovery, with occupancy in both areas stabilizing in
2023 and showing some softening in 2025.
However, ADR was the big differentiator across the two
areas, with Caribbean ADR continuing to reach record highs and Costa Rica ADR
falling from its record highs of 2023.
It is important to remember, though, the Caribbean comprises
a higher proportion of high-end hotels than Costa Rica. That is a contributor
to the diverging paths, according to Smith.
She added that Costa Rica’s increased reliance on the U.S. traveler makes
it more vulnerable to any slowdown from that demand source; however, with other
international travelers choosing non-U.S. destinations, there is opportunity
for growth from Europe and Canada.
If there is a slowdown in international inbound demand to
Costa Rica, Smith said expect a downstream effect on ADR, with less demand
concentrated in the high-end, resort areas.
Traveler types
The influence of inbound international travel in Costa Rica
also helps to illustrate the “why” behind the data trends. The number of
inbound international travelers remains below 2019 levels.
However, there has been a shift – a greater number of
Americans traveling to the country and fewer travelers from other Central
American countries. Those more “local” travelers likely represented business
travelers in addition to leisure with stays spread across hotels of all price
points.
U.S. travelers are mainly traveling for leisure, staying in
resort areas and higher-end hotels. Because of this, most of the growth seen in
Costa Rica since 2020 has been in the Guanacaste Area—and in Upper Upscale and
Luxury hotels. The capital city of San Jose has struggled, with year-to-date
RevPAR still below 2019 levels.
Entering 2025, occupancy had started to soften across the
country, even in parts of the industry benefitting most from American
travelers.
Recent months have shown slight room rate declines as well,
the first such decreases since the end of 2023. Though recent months are not
historically the highest performance period for the country, June and July have
usually outperformed the surrounding months of May and August. So, the recent
ADR declines come at a typically stronger time.