The Dominican Republic has some of the most spectacular white sand beaches and unspoiled sea in the Caribbean. It also has some of the region’s best infrastructure, thanks to the government’s investments in toll roads, world-class airports and has one of the most modern telecommunications systems in Latin America. The country began to develop its tourism industry with World Bank loans in the 1970s but has yet to move past its image as a middle-market tourism destination for Europeans escaping wet, gray winters. “It was the right decision to go after the middle market for the last 20 years,” says Ricardo Hazoury, president of CapCana, a real estate development company. “But now we need to take it to a higher level.” Janet Sánchez López, director of operations, at Casa De Campo, a luxury resort, agrees, “We need to move forward as a destination to have a healthier mix of business.”
The Dominican Republic, like other Caribbean destinations, was hit hard at the end of last year by the dramatic plunge in tourism in the wake of the September 11 terrorist attacks. “We lost about 22% of our business last year and we lost practically all the revenues for September, a month that is usually strong for group tourism,” says Sánchez López. But the Dominican Republic was also one of the first Caribbean islands to recover. It was helped in part by aggressive price-cutting campaigns by European tour operators. Tourism arrivals increased 6.44% this September, the first growth in the number of visitors in a year.
Paradise found.
Cut-rate prices however are not helping the Dominican Republic’s tourism industry redefine itself as an up-market vacation destination. Spanish, Italian and French tour operators such as Spain’s Meliá and Bareceló dominate the market. “It is easier for hotels to turn over their products to market operators and sacrifice quality to quantity,” says Sánchez López. But she warns that, “Any kind of instability elsewhere affects tourism and we are affected because the tour operators demand the hotels lower their prices. It is a situation that is hard to get out from under.”
The government is trying to respond to the challenge. In October 2001 it passed legislation intended to diversify the country’s tourism industry. Companies domiciled in the Dominican Republic, which invest and develop facilities that cater to business tourism and upscale entertainment, will be exempt from income tax for 10 years. Hazoury welcomes the law as an incentive for more ambitious large-scale projects such as the CapCana resort that he is building, with its 300 hotel rooms and 150 villas (see story page 30). His plans for CapCana include a music village as part of its luxury residential resort and he hopes to attract music companies looking to set up Caribbean operations. Casa de Campo has also embarked on new projects designed to attract a more affluent traveler. It opened new marina at the nearby town of La Romana for cruise ship visitors it hopes will come to Casa de Campo’s music shows. In November, the resort plans to open the Casa de Campo Preparatory Institute, a hospitality management training school, a joint venture between Costa Cruise Lines, Johnson&Wales, a renowned US hospitality management school and Casa de Campo.