The Recipe for Fruitful Hotel Ownership in Costa Rica
Hotel ownership in Costa Rica is quite different from what it is in other exotic destinations worldwide. Over the years I have seen many people acquire Costa Rica hotels for sale after just a couple of weeks vacationing here.
It’s easy to fall in love with Costa Rica and with such great property investment offerings. It doesn’t surprise me that many Costa Rica vacations result in the acquisition of a hotel or holiday home.
But, before getting carried away with the tropical sunsets, cocktails and monkeys it’s important to note that there are numerous and various hotel types for sale in Costa Rica. These hotels are on the market simply because new comers didn’t properly assess all the factors of hotel ownership in Costa Rica that go in to making a hotel business successful. Regardless of whether they ventured into the travel, tourism and hospitality industry in their home country or here in Costa Rica, there are some fundamental elements to consider ensuring a fruitful hotel ownership –wherever you may be.
Of course – when you are on vacation you will look at your surroundings with slightly tainted sunglasses. Costa Rica is without a doubt one of the most beautiful countries in the world. With a slower approach to daily life and a welcoming community – you can see why so many expats have made the move.
I have lived in Dominical for nearly 15 years and during this time have helped investors identify good investments whether it is hotels for sale, luxury homes for sale or suitable land for development in the South Pacific of Costa Rica.
Over the years I have acquired regional knowledge and belong to an established network of Realtors – this allows me to deliver the best service to my clients – giving them accurate information regarding logistics, regulations and important things to take into account when it comes to running a profitable hotel in Costa Rica.
So, you think you are ready to become part of the tourism industry in Costa Rica and operate a hotel?
Take a look through some important points for hotel ownership that you should consider:
1. Cash Flow
Rather than looking for a lot to develop, consider acquiring an already existing hotel as your first investment option. It’s a wise choice when you consider that this hotel will already have customers, assets, and recognition. There are many ways in which buying a hotel that is already in operation will allow you to cut costs – that being said it’s important to have the necessary start-up capital to ensure that you can not only maintain the property but also keep your employees on the payroll.
It is also worth mentioning that the Costa Rica tourism industry operates through seasons – you need to be able to cruise through the low season without getting into financial difficulty.
2. Learn the Lingo
Of course, many people who live in Costa Rica don’t speak Spanish, including many successful hotel owners. But, I would highly recommend that you make every effort to learn the lingo. It is a very important detail of hotel ownership in Costa Rica. When it comes to smooth operations, learning Spanish will help you communicate clearly with those you have employed and allow you to negotiate and interact with the people that will help you make your business successful.
3. The Legalities of Living in Costa Rica
If you are not from Costa Rica you will need to have legal residency before you can work (and that’s even if you are working in your own business). However, it should be noted that you are allowed to own a corporation or business without residency – just keep in mind you cannot participate in the daily running of the hotel as these duties can be given to a Costa Rican.
4. Acquire Knowledge and Use it!
If you are thinking about hotel ownership in Costa Rica and running your own hotel it makes sense that you learn how to carry out general repairs and property maintenance without having to call a handyman out for every leak and squeak. Also, remember that a wisely thought out location for your hotel is beneficial not just for your guests but also for those that facilitate the daily running of your business.
5. Become a little Chef
With easy access to a great selection of fresh produce including fruits, vegetables, meats, and seafood you need to get into the kitchen. When it’s low season in Costa Rica and there are more vacancies – hiring a chef isn’t always the wisest move. Work on developing your culinary skills –take classes and develop a solid menu – consider it a wise business investment.
6. Remember you’re working in hospitality
Be hospitable and not just with your guests. Costa Ricans don’t take kindly to confrontation or demanding or demeaning behavior. Liaising with those that provide a service to you or with those that work for you will require a certain amount of tact. So don’t lose your cool.
7. Tico Culture
If you’re not in the US or Canada, don’t expect things to work in the same way. You will come to realize that Costa Ricans will avoid confrontation at all costs and don’t like conflict. Don’t be surprised if someone says they will do something and in the end don’t follow through on your request. This can sometimes be due to the language barrier or even that they are too embarrassed to say no. This stands for business as well as personal relationships.
This is another good reason why you should buy a hotel already in operation. You should be able to get a good idea how much the hotel costs run and identify any areas that need tightening up. Of course, it can sometimes be hard to get solid figures from those that are selling the hotel.
So work with your realtor, the owners and learn about the local market to try and get the real picture. Taking into account the high and low tourism seasons in Costa Rica your yearly budget should be able to accommodate times when you know occupancy levels are going to be low.
9. Advertising & Marketing Strategy
Regionally or globally, online or in print – it’s important to allocate a significant amount of your budget on marketing. You need to let people know your hotel is open and ready to receive guests and identify the key elements that set you apart from the competition. Do not underestimate the importance of building a solid reputation and getting recognized.
Do your research on hotel ownership in Costa Rica. Also, look at the marketing approach of other hotels for sale from around the world that have similar characteristics.
10. Getting Connected
If you don’t want to invest highly in marketing campaigns – how else are you going to ensure occupancy? If you work hard to build a solid network then you will be able to receive bookings through recommendation. Exploring non-traditional approaches to getting your name known in the local community include
- participating in fundraisers
- starting up community campaigns
- partnering up with other local businesses
If you work hard to develop your “brand” people will come to know and associate you with a successful hotel ownership in Costa Rica.
Has this article brought a fresh view on your decision of buying a hotel in Costa Rica? Then feel free to contact me for any assistance in your hotel purchase.
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