Costa Rica hotel performance update

Analysis by Hannah Smith 

Costa Rica hotel performance over the past five years has resembled other leisure destinations frequented by Americans. Specifically, higher-end hotels and resort areas have done well, while other areas have remained flat.

Costa Rica vs Caribbean 

Pre-2020, Costa Rica closely mirrored hotel performance in the Caribbean, with similar patterns and levels of growth in occupancy and average daily rate (ADR). 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 in recent performance. 

Regardless, both areas have followed a trend seen around the world, where higher-end hotels are outpacing lower-end hotels in performance growth.

Traveler types

The influence of inbound international travel in Costa Rica also helps to illustrate the “why” behind the data trends. The total 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. 

Conclusion

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 we do see a slowdown in international inbound demand to Costa Rica, expect a downstream effect on ADR, with less demand concentrated in the high-end, resort areas.