The following blog is based on a presentation that Frank Gallo made to the Denver-based Chamber of the Americas on Aug. 14. Gallo is an author and recent Granada homeowner and still has property in the Granada area. He formerly lived in Costa Rica for nine years and resided in Panama as a teenager.

“Nicaragua is NOT the New Costa Rica.” 

This quote by Nicaraguan Tourism Minister Mario Salinas flies in the face of an oft-repeated saying by tourists, expatriates, and other observers of Central America. I confess, I used to say the same thing a few years back. But Minister Salinas has a point, and that is what I decided to explore.

First of all, what are others saying recently about the comparison of the two countries? Travel Age West opined, “Currently Nicaragua is more like Costa Rica 20 years ago. Nicaragua may be the next best, if not the more authentic alternative to travel to Costa Rica.” A Costa Rica vacation planning site observed that, “Costa Rica does not feature a wide variety of cultural or historical attractions.” And Minister Mario Salinas pointed out “… we have a diversity of offerings – a culture and a history that Costa Rica never had.”

Yes, there are similarities, but also differences between the two countries. In looking at country comparisons, Nicaragua is the largest Central American country, with 50,193 square miles, while Costa Rica has only 40% of that size, at 19,653 square miles. Yet Costa Rica’s coastline is nearly double, at 826 miles compared to 461 miles for Nicaragua. So it is no wonder that beaches feature prominently in Costa Rica’s tourism industry.

Protected areas are about equivalent, 25% of its land for Costa Rica, 20% for Nicaragua, though various sources quote different percentages, but in the ball park. The two countries share a border of 192 miles. Nicaragua has a significantly greater population, at 5.9 million, Costa Rica with less at 4.3 million. Costa Rica enjoys a literacy rate of 95%, Nicaragua 78%.

The origins of the two countries differ. In the 1500’s, Nicaragua had an indigenous population of one million. The country was colonized by the conquistadoes. As centuries passed, a conflict grew between the Liberals of León and the Conservatives of Granada, creating a timeless political contest. On the other hand, there were few indigenous peoples in Costa Rica. The area was poor and sparsely inhabited, hardly of interest to the conquistadores. Thus, there were relatively no oppressed mestizo or indigenous classes.

Looking at current differences, using the International Living Retirement Index of 2012, Nicaragua enjoys lower living costs. The cost of living is one-third cheaper in Nicaragua. Wages, of course, are much lower in Nicaragua, thus a lower cost of services provided to tourists. For comparison, a 19-year-old worker’s minimum wage in Costa Rica is $388, but only $133 in Nicaragua. Costa Rica has the edge on infrastructure, and a definite edge on health provisions.  Climate is equally desirable in each country.

In a scan of business indicators—the Latin Business Chronicle is the source—one finds that inflation in both countries is at a reasonable pace, at 8.2% for Nicaragua in 2012, and 6.5% for Costa Rica. Inflation for both countries has been reasonably stable in the past few years. GDP growth for 2012 (estimated) for Nicaragua is 3.3%, Costa Rica 4.1 %, though again in the past few years their numbers have been very close. Looking at the most recent Globalization Index (Foreign Direct Investment, Remittances, Tourism, and Exports & Imports), Nicaragua ranks #2 of 18 Latin American countries, Costa Rica a bit behind at #4. In ease of doing business, the World Bank ranks Nicaragua 24^th of 32 Latin countries, and Costa Rica 25^th.

Tourists are very concerned about safety, so it is necessary to look at crime statistics. The homicide rate per 100,000 inhabitants in Nicaragua was 12 in 2005, 13 in 2011, an increase of 8%. The homicide rate in Costa Rica in 2005 was 7.8, with a 32% increase in 2011 to 10.3.  

In 2010, the Central American average homicide rate was 25, the U.S. rate was 4.8. Using statistics for 2008, the crime victimization rate (the percentage of the population that reported victimization of crimes in the past 12 months) for Nicaragua was 19.2%, close to the 19% of Costa Rica. Armed robberies were 5.6% for Nicaragua, slightly higher than 5.3% in Costa Rica.  Burglaries were reported at 4.6% in Nicaragua, higher at 5.4% in Costa Rica. This latter category would be the one most likely to affect tourists directly, which might translate to a higher crime rate against tourists in Costa Rica.

Tourism has increased dramatically in both countries. In the year 2000, Nicaragua recorded 486,000 tourists. By 2011 there were 1.05 million tourist arrivals, an increase of 116%. For Costa Rica, in 2000 there were 1.08 million tourist arrivals, and that number grew to 2.2 million by 2011, an increase of 102%. When looking at the Costa Rica’s tourism numbers, one must keep in mind that the population of Costa Rica is only 4.3 million.

Tourism destinations are quite different in the two countries, though of course there are also similarities. Costa Rican tourism destinations favor the Pacific and Caribbean beaches for snorkeling, scuba diving, deep-sea fishing, and even sailing. National parks and nature preserves such as Toruguero on the Caribbean, Monteverde, Manuel Antonio, Rincon de la Vieja, and the Arenal area, are all popular destinations. The Central Valley offers San José museums (Jade, Gold museums) as well as the traditional towns such as Sarchí and Grecia. Other activities include whitewater rafting, lodging at the ever-growing number of 5 star resorts (about 14) and all inclusive resorts (about 18).

In Nicaragua, colonial towns, especially Granada, are the number one tourist destination. In essence, Costa Rica does not have colonial towns of the same magnitude nor architecture as Nicaragua, nor even close. Granada, León, Masaya, and the “white towns” offer tourists the true colonial feel of history and architecture. Out of the ordinary, unlike anything found in Costa Rica, is Ometepe Island in Lake Nicaragua. The lake itself is the tenth largest fresh water lake in the world, and the second largest in Latin America. Ometepe holds the distinction of being the largest island in a fresh water lake in the world. It is also full of pre-Columbian history, statuary, and other relics, plus two magnificent volcanoes. Getting there on one of the ferries is half the adventure.

The Corn Islands, located about 50 miles off the Caribbean Coast, offer another unique experience, not only for devout adventure tourists, but for others who seek the unusual destinations of the world. The Pacific beaches of Nicaragua, including the popular beach town of San Juan del Sur, offer the sun and sand crowd that many tourists are looking for, but in a charming small town way, without the mega-resorts of Costa Rica. Pre-Columbian history tours, again unique to Nicaragua in relation to its southern neighbor, explore Zapatera Island, Ometepe, and even the museum at Convento San Francisco, which houses immense pre-Columbian statuary. Other destinations are Mombacho Volcano, the Granada Isletas, Apoyo Laguna, and Matagalpa and the coffee-growing region in the highlands. The Rio San Juan is opening up for a different type of tourism experience. Unlike Costa Rica, Nicaragua has only two five-star hotels, and two significant all-inclusive resorts.

Minister Salinas says Nicaragua needs to differentiate itself as a tourist destination. The factors to do just that are certainly there. Instead of massive increases in tourist arrivals, he would like to see longer stays and more tourist dollars spent per day. Longer stays have increased slightly, but tourist dollars per stay are around $43, with a small increase in the last couple of years but one-half of what is spent by Costa Rica tourists. Efforts are underway to develop Ometepe and the Rio San Juan as tourist destinations, increase the number of in-country airports, and cooperate with projects for marinas.

Costa Rica is a maturing tourist destination. The trend has been to all-inclusive resorts and mega five-star hotels. For the most part, true adventure tourism in this tourist-friendly country is a thing of the past. More emphasis will be placed on more airlines, rural tourism, cultural tourism, medical tourism, and convention tourism.

It appears Minister Salinas was right on target. Of course the two neighboring countries have many similarities—beaches, volcanoes, highlands. Nicaragua tourism is emerging, the country is being “discovered.” It is able to offer a diverse tourism experience with its colonial towns, pre-Columbian history, and unique geography, which all offer the tourist a unique and diverse experience from that of Costa Rica.

Frank Gallo is a retired Air Force pilot and current private pilot who has both lived and flown in Nicaragua, Costa Rica, and Panama. Frank’s published work includes articles in multinational publications on the topics of aviation, Central American living and technology. His recent historically-based novel, The Comandante’s Gift, was published in March 2012. It details many of the true events that took place during the uprising against the dictator Somoza and the subsequent conflict that took place between the FSLN communist regime and the U.S.-supported Contras.

.