Many people are confused by the concept of an exchange rate and think that just because you can get a lot of colones for one dollar that’s a “good” exchange rate and Costa Rica must be very cheap. In fact costs in Costa Rica are similar to costs in the U.S. but because colones have 500 times less value than dollars you have to spend more of them for the same product.
It’s similar to thinking of converting dollars into pennies. 100 pennies won’t buy you any more in the store than 20 nickles or 1 dollar. If price tags in the U.S. were in pennies, things wouldn’t be any more or less expensive there would just be a couple more zeros on the price tags.
A motor-scooter might cost $2,500 dollars in the U.S. but in Costa Rica you’d need to be a millionaire to pay the ¢1,250,000 price tag. A two hundred dollar a night hotel room will run you a hundred thousand colones which doesn’t sound so “good”.