• Costa Rica Coffee Guide

Bill Cuts Hotel Tax, Adds $15 to Airfare

September 19, 2008

Frugal travelers might be happy to hear that the 3 percent hotel tax in Costa Rica could soon be a thing of the past.

The bad news is that the lost revenue to the government would be made up in the form of a $15 fee on all airfares to Costa Rica, according to a bill recently presented to the floor of the Legislative Assembly.

In a week, spending $15 a night at hostels, budget travelers pay about $3.15 in taxes. The point of the legislation, says Maureen Ballestero, a legislator from the majority National Liberation Party (PLN) and president of the commission that drafted the bill, is to increase funding to the Costa Rican Tourism Board (ICT).

Money from the 3 percent tax is sent to the ICT for tourism promotion, marketing and planning.

However, with more and more visitors to Costa Rica staying in condos and vacation homes, and therefore not paying the hotel tax, legislators felt it was time to update the system, Ballestero said.

The legislator also said some hotels avoid charging their guests the tax by not properly registering them.

“There are more hotels, more visitors, but the income (from the 3 percent tax) has pretty much stayed the same,” she said.

The numbers, however, do not appear to support Ballestero’s claim, as hotel tax revenues have climbed while annual tourist numbers have stayed relatively the same.

In 2006, ICT received about $7.9 million from the hotel tax, an increase of about 19.7 percent over 2005’s hotel tax revenues of $6.6 million.

Visitation during that same period was flat, with about 1.8 million visitors coming to Costa Rica in 2006, up slightly from the 1.7 million measured in 2005.

In recent months, tourism growth has slowed further.

Meanwhile, Panama, which has been challenging Costa Rica’s throne as the premier Central American destination, tourist arrivals increased by 24 percent in the first six months of this year.

“In light of the competition to attract the tourism market in the different destinations, the need to promote the country is greater every day,” said Mario Zamora, president of Costa Rica’s Airlines Association (ALA) and general manager of the Costa Rican office of TACA, a Central Americabased airline.

Zamora said the association’s position is to support ICT “in light of its need to have sufficient capital to promote the country.”

As an airline, TACA is concerned about the creation of new taxes on travelers, which can make a destination more expensive, he added.

“This is something, however, that must be evaluated by ICT if our destination is going to remain face to face in competition with other destinations,” Zamora said.

–Leland Baxter-Neal

 

You may be interested

Quepos airport renovations (finally) underway
Costa Rica
2 views
Costa Rica
2 views

Quepos airport renovations (finally) underway

Alejandro Zúñiga - May 6, 2021

Renovation and expansion of the runway at La Managua Airport in Quepos began Wednesday and will completed before September. "The…

PAHO says region’s hospitals are ‘dangerously full’
Latin America
4 views
Latin America
4 views

PAHO says region’s hospitals are ‘dangerously full’

Ariela NAVARRO / AFP - May 6, 2021

PAHO, the Americas office of the World Health Organization (WHO), warned on Wednesday that hospitals in the region are "dangerously…

IDB approves $500 million loan for Costa Rica
Costa Rica
5 views
Costa Rica
5 views

IDB approves $500 million loan for Costa Rica

Alejandro Zúñiga - May 6, 2021

The Inter-American Development Bank (IDB) said Wednesday that it has approved two loans to Costa Rica totaling $500 million. "Costa…