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Is the Costa Rica Brand Doomed?

Article Summary:

For over 30 years, the Costa Rica brand has dominated Central America. However, in the last 15 years policy changes in the tourist industry have increased cost but haven’t necessarily increased value.

If the value changes will tourists go elsewhere? Or can Costa Rica capture a higher end market?

ET Original Article: By Josh Linnes

Country brands go a long way in defining how a country is perceived. The name of most countries provoke some kind of response in the mind. For example, what pops into your head when you see the word, Somalia? Greenland? or Russia?

Your reactions to those countries will likely be experienced by other people too, based on what has been read, heard, or experienced.

There was study done by the British Company Future Brand, ranking countries by strength of brand. The number one ranking went to Canada. In Central America the premier brand is Costa Rica. It ranks 24th overall, followed by Panama, the next closest country in Central America at a distant 67th

Cost Rica has a long history of stability. It is well known that they have no army and 26% of the countries land mass has been made into parks, or is controlled by the government.

Besides smart policy historically, they brilliantly innovated the Eco-Tourism model, promoting themselves as a natural, green country, with second to none marketing campaigns. Then delivering on their promise with otherworldly natural experiences for their visitors.

A Dynasty is Born

Simply, there is none better at the tourism business than Costa Rica in this region. They have become a dynasty.

Dynasties usually have a life cycle though, and eventually they end up crumbling. It could be from overconfidence, stupid decision making, or underestimating your competition.

15 years ago, Costa Rica was known as a safe place that was beautiful and cheap.

In 1998, tourism was half the size when measured by visitors. That year 943,000 people visited the country. In 2010 there were over two million visitors.

It was a different place in 1998. It was less developed, less refined and the tourist industry was a growing business that had potential.

The experience was rougher around the edges. It was rare to see expat families living there full time. You were more likely to meet a tattooed Vietnam Vet in a little town, than see a family pushing a stroller.

Fast forward 15 years and the success of the tourist industry has changed the game. It now brings in billions of dollars directly into the economy and you can’t go anywhere without seeing some establishment ready take advantage of tourist dollars. From fruit stands, to canopy tours, to cabinas in the middle of nowhere there is some kind of service available in most every town.

Changing Policy Changes Experience

The difference now is that there has been a transition from, how do we get visitors to how do we get more money out of visitors wallets?.

It is a natural progression. You can’t blame the leaders for thinking this way. After all, they have become completely reliant on the tourism business just like the local rain forests depend on rainy season to bring water. The dependence on tourism is so strong that when there is a shortfall in the budget they inevitably turn to tourism to bail them out by adding new fees or higher taxes. There is seemingly no end to how many different ways tourism can be used to wring out money to pay for Costa Rican programs.

This does not go unnoticed by the people who visit the country. They certainly notice when they blow their budget too quickly.

Costa Rica can be up to three times more expensive than neighboring countries and its attitude seems to say, So what? We are best. Sure competing countries have their problems too, but at what point do tourists say enough is enough? Costa Rica costs three times more but is it three times the value?

Couple this with fact that the blueprint for tourism success is no secret. Any country can copy what Costa Rica created and they do. Last year Panama claims to have surpassed Costa Rica in visitors. Panama did this by copying Costa Rica’s approach to advertising and focusing on the natural beauty of their country and coincidentally prices are much lower there.

There has been a fundamental shift in Costa Rica tourism policy. It is now becoming expensive just to be a tourist. They have gone from trying to get people to visit the country to increasing revenue from each tourist, to tediously taxing every part of the tourist experience. Thus resulting in that Costa Rica isn’t cheap.

Respect The People Who Got You There

Could this be the beginning of the end? Not respecting the people who got you there will have negative consequences. A renewed focus on experience would change this.

Instead of nickel and dimeing every visitor from the moment they get here until their exit at the airport, focus on getting tourists to pay for unique experiences that last a life time. People will go home and share their epic adventures, instead of sharing that Costa Rica is a poor value. That is how the brand was built and is the best way to appeal to the most people.

Josh Linnes is co-founder of Emerging Terrains. He is new on Twitter and would greatly appreciate anyone interested in following his adventures @JoshatETI

  • Rusty from NV

    Excellent article, Josh, and right on the money. While Costa Rica has much more to offer a tourist, Panama and a couple of South American countries are less expensive and are appealing more to the millions of Baby Boomers looking for places to visit and live. Panama even offers a special retirement program for ex-pats, reducing travel costs, eating out costs, property taxes, etc. If the Costa Rican government doesn’t wake up soon, they will loose the 6,000 people a day from the USA who are looking to leave the USA and take up residency in a Latin American country. All that ex-pat money will be going to competing countries. Hopefully the CR government will soon wake up to this fact. Keep up the writings, Josh. Maybe someone in Gov’t will read and internalize???

  • Lajollarental

    Great article. Will Colombia ever be in the mix. It probably has greater possibilities for the future than any of the countries in central/south America. It has as large consumer base for it’s own manufacturing sector and has a European feel to it not the relaxed attitude of most of the countries on your list

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