Impact of Tourism Related Development on the Pacific Coast of Costa Rica Summary Report

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Impact of Tourism Related Development on the Pacific Coast of Costa Rica Summary Report Exhibit FTI-27 Page 1 of 114 Impact of Tourism Related Development on the Pacific Coast of Costa Rica Summary Report By: Martha Honey Erick Vargas William H. Durham Center for Responsible Travel A Nonprofit Research Organization Stanford University and Washington, DC www.responsibletravel.org April 2010 1 Exhibit FTI-27 Page 2 of 114 Foreword The following Summary Report, based on two years of research and some two dozen individual studies by a team of Costa Rican and U.S. experts, offers the first multidimensional analysis of the phenomena that Costa Ricans have dubbed “residential tourism.” While this term has become popular, most Costa Ricans have had little understanding of its dimensions and implications for the country, the country’s Pacific coast, or Costa Rica’s tourism industry. The study traces the origins of this coastal transformation from the 1970s to the present, with particular focus on the real estate and construction boom and bust (caused by the global economic crisis) from 2002 through 2009. As members of the Advisory Committee that has assisted the research team, we believe that the study’s findings and recommendations can play a constructive role in helping to foment public discussion, civic engagement, and policy reforms to ensure a sustainable economy in coastal and marine tourism. Over the last decade, Costa Rica’s Pacific coast has become one of the epicenters in the Americas for rapid beach resort and vacation home development closely tied to the U.S. market. Together with cruise ship tourism, residential tourism is transforming swaths of the physical landscape and displacing or competing for resources with many fishing, farming, and ranching communities in the coastal zone. Sun-and-sand resort and cruise tourism has the potential to conflict with Costa Rica’s well-deserved international reputation for high-value, nature-based tourism, commonly known as ecotourism. Indeed, Costa Rica’s Pacific coast has been a kind of "laboratory" in which an experiment with different models of tourism -- residential tourism (all-inclusive resort and vacation home developments), cruise tourism, and ecotourism/sustainable tourism have, in effect, been run. We concur with the Summary Report’s finding of abundant and strong evidence favoring one model – ecotourism/sustainable tourism --over the others, as the most overall beneficial for Costa Rica. While resort, residential, and cruise tourism will, of course, continue to be slices of Costa Rica’s tourism offerings, they need to be demarked with careful planning and clear limitations, just as does any other kind of development. We believe that Costa Rica is best served by redoubling its efforts to support and promote high-value, nature-based tourism grounded in sound environmental and social principles and practices. Signed: Tamara Budowski Pedro León Carlos Manuel Echeverria Margarita Penón Daniel Janzen Alvaro Umaña 2 Exhibit FTI-27 Page 3 of 114 Table of Contents Foreword ....................................................................................................................................... 2 Preface .......................................................................................................................................... 5 Executive Summary ...................................................................................................................... 6 Impact of Tourism Related Development Along ......................................................................... 13 Global Trends in Coastal and Marine Tourism ........................................................................... 14 Overview of Pacific Coast Tourism in Costa Rica ....................................................................... 16 Key Findings and Conclusions: ................................................................................................... 18 Changes in Land Use .............................................................................................................. 18 Legal and Institutional Framework and Oversight ................................................................... 22 International Airport at Liberia ................................................................................................. 32 Gulf of Papagayo Tourism Pole .............................................................................................. 36 Resort and Residential Tourism: Dynamics of the Real Estate Market on the Pacific Coast . 47 Sustainable Coastal Tourism: Certified Beaches and Hotels .................................................. 54 Cruise Tourism on the Pacific Coast ....................................................................................... 56 Changing Perception of Pacific Coast Tourism and Costa Rica’s Brand: Media & Tourism Industry Perspectives .............................................................................................................. 62 Changing Profiles of International Tourists in Costa Rica ....................................................... 67 Coastal Tourism: Impacts on Job Creation and Poverty ......................................................... 71 Environmental Impacts of Tourism and Residential Developments ........................................ 79 Impacts of the Economic Crisis ............................................................................................... 88 Conclusion and Top Ten Policy Recommendations ................................................................... 91 Annex 1: Chart of Reports and Researchers .............................................................................. 95 Annex 2: Project Research Team ............................................................................................... 98 Annex 3: Project Advisory Committee ...................................................................................... 102 About the Center for Responsible Travel (CREST) .................................................................. 103 Acronyms .................................................................................................................................. 104 Endnotes ................................................................................................................................... 107 3 Exhibit FTI-27 Page 4 of 114 Table of Figures Figure 1: Map of Costa Rica ....................................................................................................... 17 Figure 2: Map of Case Studies along Pacific Coast .................................................................... 19 Figure 3: Land Dedicated to Human Settlements & Tourism on the Pacific Coast, 1980 – 2005 .................................................................................................................................................... 20 Figure 4: Tourism Businesses Functioning in PTGP, September 2008 ...................................... 39 Figure 5: Main Counties receiving Foreign Real Estate Investment 2004-2007 ......................... 48 Figure 6: Cruise and Stayover Sector Comparisons in Costa Rica. ........................................... 60 Figure 7: Traveler Activities by Airport, 2007 .............................................................................. 70 Figure 8: ICT Tourism Planning Units ......................................................................................... 73 Figure 9: Percentage of Households in Extreme Poverty ........................................................... 74 Figure 10: Average Occupancy for on Nine CST Certified Hotels .............................................. 88 Figure 11: International Arrivals 2002 – 2009……………………………………………………….88 4 Exhibit FTI-27 Page 5 of 114 Preface The Center for Responsible Travel (CREST), a U.S. nongovernmental organization (NGO) based at Stanford University and in Washington, DC, together with a team of Costa Rican researchers and advisors, has conducted a two-year research project examining the impacts of tourism development along the country’s Pacific coast. This Summary Report contains the most significant findings and conclusions from the study, as well its ten most important policy recommendations. The study focused only on tourism impacts on Costa Rica’s Pacific coast. It is not a comprehensive assessment of Costa Rica’s tourism industry or of government tourism policies. Although the study spans the full length of the Pacific coast and the years 1980 to 2010, it pays particular attention to those areas where tourism and residential real estate development experienced the most rapid growth, particularly between 2002 and 2008. Our research team included more than a dozen experts in Costa Rica as well as CREST staff and researchers in the United States (see Annex 2). The team examined a wide range of legal, environmental, social, and economic issues surrounding coastal tourism and produced a series of 16 distinct reports on various aspects of coastal tourism. (See chart in Annex 1. The individual reports are posted online at http://www.responsibletravel.org/resources/Coastal- Tourism.html). The research adheres to Stanford University Human Subjects Protocol and this Summary Report is produced in accordance with academic standards. In addition, an Advisory Committee of 11 prominent and knowledgeable people in Costa Rica provided assistance and helped to review various pieces of the research (see Annex 3). In this research, we also collaborated with various Costa Rican institutions and government
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