When Will Costa Rica Reopen?

Costa Rica’s borders remain closed, officially through July 30. However, most folks in the know will tell you that borders will probably not reopen then…

When will Costa Rica reopen is anyone’s guess at this point.

And that’s a problem, especially for tourism…

Tourism represents an important chunk of Costa Rica’s overall economy. It is also married to other sectors, especially foreign investment. According to the OECD, around 150,000 ticos are directly employed in tourism. If you add in both direct and indirect employment, that number swells to around 450,000, or 28% of total employment.

Just this week the Costa Rica unemployment rate reached 15.7%, the highest in its history.

Costa Rica has only 12 COVID-19 related deaths. That represents 2 deaths per 1 million in population, which is one of the lowest figures in the world. Compare the U.S. rate of 369 deaths per 1 million.

Nevertheless, cases have been on the increase as of late. Much of that trend seems to be stemming from problems with Costa Rica’s northern border with Nicaragua. No one knows for sure what the real situation is in Nicaragua, but by all accounts, it’s very bad.

The Costa Rica government seems to be willing to allow its vital tourism industry to suffer, if necessary to protect the health of the overall population. The logic of that becomes clearer when one considers that Costa Rica’s health care system does not have the capacity to handle a huge wave of hospitalizations related to COVID-19.

Countries around the world with strong tourism industries are beginning to open back up, albeit cautiously. Check out this article from CNN Travel to see what countries are opening up and to what extent.

You’ll notice, however, that Costa Rica is not on that list.

I am being asked daily by my real estate interested customers, many of whom are considering a move to Costa Rica, when will borders reopen so that they can make their exploratory trips? I don’t know what to tell them.

I recently interviewed Casey Halloran, the founder of Costa Rica Vacations, one of the largest independent tour agencies in the country, for my World Changers Expat Podcast. I asked Casey, when will Costa Rica reopen? He thought the date would be August 1st. However, that interview took place prior to the recent wave of new cases.

Just today, Sunday, June 21, Costa Rica reported 86 new cases. On Friday 119 new cases were reported, the highest daily increase since the very first case was reported on March 6th. The Costa Rica government quickly throttled back on its plan to go into a Phase 3 of relaxing restrictions on economic and other activity. This weekend they imposed the same stringent driving restrictions that we endured during Semana Santa, basically meaning no driving except for emergencies and to buy food.

Health Minister Daniel Salas said that an eventual reopening of Costa Rica to international tourism will be “gradual and controlled”, only allowing visitors from locations with low coronavirus transmission. He did not provide an estimated date on when that could occur.

Does gradual and controlled also mean imminent?

Will folks from the States be allowed in?

What restrictions will be imposed and will those restrictions discourage travel to such an extent as to make an opening meaningless?

I am very concerned about the situation, especially as it relates to tourism. Businesses and workers who have been sidelined by this crisis cannot endure this much longer. Surely the government understands that. Hotel owners in particular are urging the president to open the country back up! In a letter published this week by the Costa Rican Hotel Chamber (CCH), its president, Javier Pacheco, said the hotel sector “can no longer endure” the economic crisis caused by the coronavirus pandemic.

What are the restrictions likely to be imposed once the country does open back up? I believe what might be imposed could be similar to what Iceland has done…

Iceland opened back up on June 15. Travelers have the option to either submit to a COVID-19 test on arrival, provide proof of a recently taken test with a negative result, or agree to a two-week quarantine. A $112 testing charge will be implemented from July 1.

Visitors to Iceland will also be encouraged to download the app, Rakning C-19, designed to help trace the origin of transmissions, which is available in seven languages, including English, Polish, German, French, Spanish and Italian.

And that doesn’t bode well for the tourism industry, or for the economy of Costa Rica as a whole.

How will this effect the real estate situation?

In my “silver lining post” I predicted that the COVID-19 crisis, coupled with the political and social unrest occurring in the States, would drive demand for Costa Rica real estate. Even though borders remain closed, we realtors are already seeing that prediction come to fruition…

Just in the last week I’ve had two situations where offers that I submitted on behalf of my clients were met with competing offers from other buyers! That rarely occurs, even during the best of times.

I also predicted that real estate that is more closely tied to tourism, especially high-dollar homes in normally high tourist traffic areas (such as Costa Rica’s popular beaches), that are marketed as “income producers”, will face a tougher time selling in this environment.

There will likely be some very good deals coming available, however, especially with tourist properties, such as boutique hotels.

I still believe, perhaps even more strongly, that things will play out exactly as I predicted.

I can only hope, for the good of Costa Rica’s tourism industry and economy as a whole, that Costa Rica can open back up and revive the industry before it’s too late…

The clock is ticking!

P.S. Since this article was written the government has vowed to open up in some form or fashion on August 1, 2020. However, with cases surging in the GAM (San Jose metropolitan area), which is currently completely locked down under an “orange” alert, who knows. There may be only a partial reopening, which does not allow certain countries (with high infection rates) in. The U.S. could very well be on the “out” list. We shall see.

The clock is still ticking…