Paying For Your Costa Rica Trip: What Is Normal, Common, And To Be Expected?
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Tourism operations in Costa Rica are all over the map, literally and figuratively speaking. Travellers can hike to volcano craters in the Central Valley, rappel down waterfalls in the Northern In-lands, surf the Pacific Coast, channel their inner rastafarian on the Caribbean Coast, and visit some of Costa Rica’s most precious protected land on the Osa Peninsula. Tourism operations also vary in their practice from operator to operator). Just as the rich coast offers travellers a lot to see and do, it does so via good, honest, and humble business practice most of the time, downright illegal business practice a fraction of the time, and shady business practice the remainder of the time, wherein questionable acts, offerings, and policies push the boundaries of business ethics. This range of good to bad business practice is no stranger to the average traveller. Fortunately, most have become better travel and smarter planners because of it, as they have learned to research their trip ahead of time, familiarize themselves with common ravel scams, and rely heavily on the word-of-mouth recommendations and testimonials of other travellers to back the trip items they have decided on.
In knowing that difference across tourism companies in Costa Rica exists, how can a traveller take this knowledge and apply it to their own trip so they can both rely on the good guys and weed out the bad guys? If there is anything that we have learned throughout our work at Pura Vida! eh? Inc. and being middlemen between international travellers and Costa Rican tourism companies it is that a large gap between these two groups not only exists, but that gap is widened by the misunderstandings of each group towards the other.
This gap is most obvious within the payment department. Regardless of the items decided on for a trip, at some point or another, the items will need to be paid for. Here exists a wall between travellers and Costa Rican tourism companies (herein referred to as “tourism companies”). From the traveller’s point of view, many individuals are hesitant to pay and provide personal information (such as credit card information or identification copies) to companies in foreign countries. A cautious attitude that is no doubt the result of the world’s awareness of and sensitivity to credit card fraud. From the tourism company’s point of view, payment (or at least credit card information and sometimes identification copies as a payment guarantee for a reservation) is required in order to obtain the security needed to proceed with making arrangements for a tourism service on behalf of a traveller (such as a hotel stay, tour/activity, vehicle rental, or transfer service); a requirement that is not only justifiable for any business (including those operating in industries other than travel and tourism), but one often of necessity when a large percentage of the company’s client-base is comprised of uncommitted and somewhat transient travellers likely to change their travel plans on a whim.
So, it possible to appease both travellers’ comfort and tourism companies’ security? Sometimes it isn’t, and we run into situations where travellers refuse to reserve items with a particular hotel, tour operator, vehicle rental agency, or transportation service provider because the traveller does not agree with the tourism company’s payment requirements. Similarly, we have been denied the option of providing a particular hotel, tour/activity, vehicle rental, or transportation service to a traveller because the operator/provider is unable to change their policy to meet a traveller’s specific demands. The majority of the time, we avoid situations like these by attempting to close the gap between the two groups. How do we do this? By inundating each group with enough information about the other to help them see the opposing side of view. When we do so, each group is able to recognize truth in the argument of their opponent. This allows each party to see the other as a partner worth negotiating with, not an enemy out to get or scam them.
To help put the minds of most travellers at ease, the following is a list of business practices that we commonly see throughout tourism companies’ payment operations. Some of the below business practices mirror those that are common in other countries throughout the world. Other business practices do not. We know so, because every now and again we receive an email from a distraught traveller who, despite consciously choosing Costa Rica as his or her travel destination, is disappointed that the country they chose is a second-world one (these emails typically read: “I don’t know how things work in Costa Rica, but here in the US/Canada, we…”, or similar). To these travellers, short of apologizing for Costa Rica’s inability to replicate another country (isn’t part of the purpose of travel to go someplace different anyway?), we cannot offer much consolation, merely a friendly reminder that the best way to ensure the extent of a travel experience remains within the confines of what one is accustomed to at home, is to not travel at all.
PAYMENT OPERATIONS OVERVIEW
To confirm, each hotel, tour operator, vehicle rental agency, and transportation service provider in Costa Rica has their own policy in regards to what they require in the way of payments (this is not mandated by the Costa Rican government, so each tourism company is able to create and set their own payment policies). Some require prepayments (ie. payments to be made prior to arrival at the hotel, on the tour/activity date, upon vehicle rental pick-up, and/or on the transportation service date), some require credit card information as a guarantee only (in these cases, prepayment is not required as payment for the trip item is due upon to arrival at the hotel, on the tour/activity date, upon vehicle rental pick-up, and/or on the transportation service date), and others need no guarantee via payment or credit card information in advance (therefore, payment for the trip item is due upon to arrival at the hotel, on the tour/activity date, upon vehicle rental pick-up, and/or on the transportation service date).
TOURISM COMPANIES REQUIRING PREPAYMENT
What It Means For The Tourism Company
Prepayment requests are incredibly common in Costa Rica for two reasons. For one, it eliminates stress and concern for tourism companies regarding last minute cancellations and/or no shows by travellers. Secondly, it gives tourism companies the confidence they need to proceed with making any advance payments related to reserved items on behalf of travellers. Upon obtainment of an item prepayment, tourism companies can plan to offer their service(s) on the reserved date(s) without worry that the traveller will not maintain the reservation. When cancellations are made last minute (or worse, when travellers do not show up for reserved items), it is often too late for the space held to be given to someone else. In addition, it is often too late for the tourism company to recover money put out to arrange the reserved item initially, resulting in a monetary loss. Fortunately, with prepayment in hand (and assuming that the cancellation was not made according to the tourism company’s cancellation policy guidelines, as if it was the prepayment would be returned to the traveller without penalty), the tourism company can recover the cost of their loss via the funds already obtained from the traveller in case of last minute cancellation or no-show.
Example: when a traveller reserves a combo tour, the tour operator may need to offer sites (such as local attractions and/or hot springs) a prepayment of entrance fees on behalf of each member of their tour group. If/when travellers cancel last minute or do not show up for their reserved tour, not only is the tour operator out the cost of running the tour themselves (ie. costs relating to guide fees, food/snack costs, and/or driver/gas transportation fees), but they may not be able to recover the entrance fees to the local attractions purchased on behalf of the traveller at the time of reservation.
What It Means For The Traveller
Prepayment requires commitment on the part of the traveller. Although cancellation policies vary across tourism companies, most allow a particular window of time (typically 24 to 48 hours’ notice for tours/activities, vehicle rentals, and transportation services, and anywhere from a few days to weeks/months in advance for hotels) in which reservations can be cancelled without penalty (not one tourism company we have worked with offers non-refundable reservations). This means that although payment for a hotel, tour/activity, vehicle rental, and/or transportation service must be made in advance, travellers have the right to cancel their reservation(s) if they wish (and without penalty), so long as they do so according to the tourism company’s cancellation policy guidelines. Prepayments also mean that travellers are required to carry less cash with them while in Costa Rica as some/all items can be paid for prior to arrival.
Remember, on behalf of the tourism company: when a tourism company requests prepayment this is not to be understood as a ‘red flag’ or a scam. Some of the best companies in the country (including Desafio Adventure Company, who was voted Best Tour Operator in all of Central America) require prepayment. Many of the most professional companies do, as it is merely good business for a company to protect the service(s) it chooses to offer to travellers. Planning for exact tour group sizes, hotel guests, vehicle rentals, and transportation service capacities by avoiding last minute reservation changes is the best way a company can provide great experiences to other travellers who commit to their reservations. Prioritizing stability and commitment (via the prepayment requirement) should be a vote for a tourism company, not a vote against one.
Remember, on behalf of the traveller: Providing prepayment to an international company can be scary, however it should not be avoided. Travellers who opt to stay away from any/all companies that require prepayment are missing out, as some of the best tourism companies in Costa Rica offering not-to-miss services require this form of payment. However, in order to best protect yourself and your hard-earned cash, research the companies you plan to provide prepayment to. If you come across any ‘red flags’ regarding the company itself, choose a different operator. Alternatively, if the company (including its history, operation, and past client support) passes your test, don’t deny yourself the chance of participating in something great simply because of the tourism company isn’t up for taking a risky monetary chance on you.
TOURISM COMPANIES REQUIRING A GUARANTEE, BUT NO PREPAYMENT
What It Means For The Tourism Company
Tourism companies requiring a guarantee but no prepayment are the most prevalent in Costa Rica. Why? Because only a few companies are willing to trust that travellers will show up for their reservation(s) as planned without the security that a credit card can provide. We work with thousands of travellers yearly, and only once in a blue moon do we come across individuals who reserve trip items with the intention of cancelling their reservations closer to or during their trip. Most cancellations are unplanned, not to mention undesired. After all, life happens – travellers get sick, children get tired, and people change their minds. For this reason, most tourism companies offer flexible cancellation policies to account for such changes. Regardless, when last minute changes and/or no-shows happen (no matter how unpredictable and unfortunate), tourism companies aim to protect themselves from the fallout (ie. monetary loss) by requesting credit card information from travellers as a guarantee. Although no prepayment is taken in advance (travellers are free to pay for their trip items once in Costa Rica), in the event that the traveller cancels their reservation(s) last minute or does not show up as expected, the tourism company has the ability to charge the traveller for the missed reservation(s) via the credit card information previously provided.
Example: a white water rafting tour operator has a group of 7 people planning to raft. Since each raft fits a maximum of 6 people, the operator must hire an extra guide and plan to bring an extra raft the day of the tour so the rafting group can be split into 2 smaller groups. The morning of the rafting tour, 1 person cancels their reservation (or does not show up). Not only does the tour operator lose the income generated by the tour for 1 person, but the extra raft and guide would not have been required the day of the tour had the traveller cancelled their reservation ahead of time. Although prepayment was not required for the rafting tour (the rafters were supposed to pay the tour operator the day of the tour), the tour operator had requested credit card information from all travellers at the time of reservation as a guarantee. This information can be used by the tour operator to obtain payment for the missed tour which in turn will cover the tour operator’s monetary loss over the reservation cancellation.
What It Means For The Traveller
As discussed above in regards to prepayments, providing tourism companies with a reservation guarantee (ie. credit card information) requires commitment on the part of the traveller. Although cancellation policies vary across tourism companies, most allow a particular window of time (typically 24 to 48 hours’ notice for tours/activities, vehicle rentals, and transportation services, and anywhere from a few days to weeks/months in advance for hotels) in which reservations can be cancelled without penalty (not one tourism company we have worked with offers non-refundable reservations). This means that although payment for a hotel, tour/activity, vehicle rental, and/or transportation service is not obtained in advance, travellers have the right to cancel their reservation(s) if they wish (and without penalty), so long as they do so according to the tourism company’s cancellation policy guidelines.
Remember, on behalf of the tourism company: as discussed above in regards to prepayments, when a tourism company requests a guarantee (ie. credit card information) this is not to be understood as a ‘red flag’ or a scam. The majority of tourism companies require a guarantee before they will securely confirm any trip item reservation as they too aim to protect the service(s) they choose to offer to travellers. In addition, many tourism companies that request a guarantee only (opposed to a prepayment) do so with greater flexibility and travellers’ interests in mind. Instead of requiring advance payment for any/all reservations, many allow travellers to choose whether they would prefer to pay for their reservation(s) in cash or via credit card once in Costa Rica in an attempt to best accommodate the preferences of each individual traveller.
Remember, on behalf of the traveller: as discussed above in regards to prepayments, providing a guarantee (ie. credit card information) to an international company can be scary, however it should not be avoided. Travellers who opt to stay away from any/all companies that require credit card information are missing out, as nearly all companies in Costa Rica require this (either for obtainment of a prepayment or as a guarantee only). As stated above, in order to best protect yourself and your hard-earned cash we recommend that you research the companies you plan to provide your credit card information to. If you come across any ‘red flags’ regarding the company itself, choose a different operator. Alternatively, and as we touch on above, if the company (including its history, operation, and past client support) passes your test, don’t deny yourself the chance of participating in something great simply because of the tourism company isn’t up for taking a risky monetary chance on you.
TOURISM COMPANIES REQUIRING NO GUARANTEE OR PREPAYMENT
What It Means For The Tourism Company
Tourism companies requiring no guarantee or prepayment are harder to come across in Costa Rica. They certainly exist (roughly 15% of the tourism companies we work with choose to operate this way), however they are far less common than those companies that opt to collect prepayment or a guarantee (ie. credit card information) from travellers. They are also a riskier breed – arguably more accommodating of travellers AND somewhat foolish business operators as they rid themselves of the ability to collect payment from travellers retroactively in the event of last minute cancellations and/or no-shows. Of this selective group, some opt not to collect prepayment or credit card information from travellers as their small businesses (often sole proprietorships in the case of individual guide services) are simply unequipped to collect such payments (these companies tend to be “cash only” businesses). Others choose not to do so because they have little to lose when travellers cancel a reservation (ie. the service being reserved does not require the tourism company to put out money on behalf of the traveller at the time of reservation, therefore last minute cancellations and/or no-shows result in minimal loss to the tourism company).
Example: when a traveller reserves a canopy ziplining tour that the tour operator runs on-site, there are very few operational expenses that the tour operator must put out in advance on behalf of the traveller. Canopy ziplining tour groups have room to fluctuatre in size, so a guide can easily take 4 people in his group just as he could take 6. Last minute cancellations, although they do have an effect on the income of the tour operator, cause less of a monetary loss than other tours/activities, which is likely why many canopy tour operators do not request prepayment or credit card information in advance as a guarantee from travellers.
What It Means For The Traveller
Complete and utter freedom. Well, as far as cancellation policies go. Although many companies that do not require prepayment or a guarantee from travellers have their own cancellation policies, these are incredibly difficult to enforce when the tourism company has no prepayment or credit card information in hand to use as leverage. For this reason, travellers can technically cancel their reservation(s) last minute without penalty, simply because the tourism company can’t stop them. Of course, we can only hope that all travellers would be kind enough to afford tourism companies with ample notice if/when a cancellation is needed, however unfortunately this isn’t always the case. If you are a traveller looking to make reservations with only those companies that do not require prepayment or a guarantee from travellers, we recommend changing your trip planning strategy. Otherwise, you will eliminate approximately 85% of the tourism company players in the game – many of which are the best around – sacrificing quality of experience for mere payment convenience.
COMMON PAYMENT MYTHS AND MISCONCEPTIONS
MYTH (on behalf of the tourism company): All travellers are looking to get out of their reservations and/or cancel last minute.
Nope! Most travellers are looking to have a fun, exciting, and relaxing time while on vacation. Sometimes things pop up and plans change resulting in reservations needing to be cancelled. Most travellers don’t get the chance to travel to Costa Rica often, so chances are they don’t want to have to cancel a reservation as much as a tourism company wants to receive the cancellation notice. Such is life!
MYTH (on behalf of the traveller): All companies that request prepayment or credit card information are fraudulent companies looking to ‘pull one over on me’.
Wrong again! We’re sure there are ‘bad guys’ out there, but there are far more ‘good guys’ who are just looking to protect themselves and their businesses. The best way travellers can understand this is by putting themselves in business owners’ shoes. Would you feel comfortable trusting the word of an unknown international client? Or would you feel more secure in your business operation by asking for a product/service prepayment or credit card information (as a guarantee of product/service payment)?
MYTH (on behalf of the traveller): All companies that request my signature on a credit card authorization form and/or copies of my identification are fraudulent companies wanting to steal my identity.
No, and we need to blame this one on the banks. Depending on the tourism company, the bank they work with, and the exact details of their banking account(s), banks may require an original signature as well as identification copies that support the name and signature provided on the credit card authorization form. In most cases this is a bank requirement, not a tourism company requirement and the tourism company must receive this from travellers in order for the payment to be accepted by the bank. This being said, many tourism companies know that travellers question this requirement and some offer alternative solutions to having to send in the form and/or identification copies (such alternative solutions should be discussed and arranged between the traveller and tourism company directly)
MYTH (on behalf of the traveller): I can call the tourism company and provide them with my credit card information over the phone in order to avoid sending in a credit card authorization form via scan/email or fax.
Unfortunately this usually does not work, only because (as described above) most banks require an original signature in order to accept a payment (even if the tourism company does not require prepayment, they will be hesitant to accept credit card information as a guarantee over the phone given that the information cannot be used to collect prepayment in case of last minute cancellation or no-show without obtainment of an original signature).
MYTH (on behalf of the traveller): I can have an enjoyable and fulfilling vacation relying solely on tourism companies that do not require any prepayment or guarantee (ie. credit card information) from travellers.
Hmmmm… this is a tough one. With some incredibly detailed planning I suppose this could be possible (anything is possible!), so long as you don’t mind limiting yourself to one particular type of tourism company categorized by its payment method. In our opinion, it would be much easier and more rewarding to achieve a high quality vacation by determining the best hotels, tours/activities, and transportation services for you from a larger selection pool to begin with. This way you can rest assured that the trip you plan is the right trip for you, based on your choices from 100% of the options out there and not a mere fraction of this amount.
QUESTION TO COMMENT ON: Which factor would trump the other in your decision – quality of experience or payment method?