Caribe Hospitality De Costa Rica, S.A. (CHDCR)

MIGA has provided a $1.6 million guarantee to Marriott International, Inc. (Marriott), to cover its $1.8 million management agreement with, and $1.4 million loan guaranty to Caribe Hospitality De Costa Rica, S.A. (CHDCR) of Costa Rica. MIGA has also issued a $4.4 million guarantee to Bank of Nova Scotia (Scotiabank) for its $4.8 million non-shareholder loan to CHDCR. The guarantee to Marriott is for three years, and is against transfer restriction; the one for Scotiabank is for 11 years and is against the risks of transfer restriction, expropriation and war and civil disturbance.

Since the early 1980s, the government of Costa Rica has placed a high priority on developing its tourism industry. This project, which involves the construction and operation of a hotel in the La Sabana suburb of the capital, San José, supports that initiative. Increased international travel into the country in recent years and commercial growth in San Josi have contributed to a growing number of business travelers and tourists. The new hotel will help accommodate the increased demand for hotel rooms and is expected to encourage more visitors. The hotel is also part of a new business development corridor, which is expecting to see rapid growth as a new highway is completed. The hotel will play a role in facilitating this growth. Once operational, it is estimated that the hotel will contribute $19 million in foreign exchange earnings for the government during the first five years of operations, plus tax revenues. Marriott will provide training programs for the estimated 58 locally hired workers, and local building materials will be used for construction. Multiplier effects of tourism are expected to be significant as well, supporting the growth of the transportation, food processing, furniture-making, hospitality, tour operations, infrastructure and financial services industries.