Executives discuss boom in Dominican Republic

As dry as statistics are, they do tell a story. Case in point: The visitor figures for the Dominican Republic from January through June are up 8.1% over the same period from a year ago, to 1.7 million tourists. From boutique retreats to megaresorts, the pace of construction in the Dominican Republic appears to match the occupancy figures of its hotels. Yet, who benefits from all this -- besides the hoteliers -- and what is tourisms impact on the islands 8.8 million residents?

To find out, Travel Weeklys Caribbean editor Gay Nagle Myers and senior editor Ken Kiesnoski sat down with two experts on two sides of the tourism fence: Frank Rainieri, president and CEO of Grupo Punta Cana and a tourism pioneer in the Dominican Republic; and Greg Thorne, president of Inter Island Tours, which accounts for at least 12,000 visitors per year to the D.R.

Travel Weekly:Where is tourism headed in the D. R., which is still a developing nation with the inherent problems that come with emerging destinations? What are the tourism challenges?

Rainieri: For many years, the D.R. was practically unknown to the U.S. market. The Europeans discovered us in the early 1990s, but it was just recently that the American market discovered us as a safe, close place with beautiful beaches and warm people.

Why? Security and location. Americans look at Dominicans and they recognize the faces of baseball player Sammy Sosa and designer Oscar de la Renta.  Were also only two hours from Miami, three from New York and four from Chicago. Our hotels are new facilities built to American standards of comfort. We have 20,600 rooms in Punta Cana, and 80% have been built in the last 10 years.

Thorne: The D.R. is a resort- driven destination, unlike St. Thomas, where visitors stay at resorts but tour the island and shop in its stores. Thats the challenge, especially for the U.S. market. U.S. travelers like to spend money on vacation, and they want to bring home more than T-shirts. Its hard to do that in the D.R. There are no big shopping areas near the resorts.

There is poverty in the D.R., and there are two distinct classes. As a destination, the hotels encourage guests to stay within the complex. The off-site excursions are well-organized and keep the guests happy, but whats missing is the segment that allows visitors to explore on their own. Very few visitors, for example, rent cars.

The D.R. pushes all other destinations. Its an impulse market that travelers can visit on a whim very easily from major U.S. gateways.

TW:The D.R. is lacking a bit on the infrastructure front. For example, blackouts are frequent and some roads are not up to par. Is tourism in the D.R. hampered by a sagging infrastructure?

Rainieri: The problems with electricity are in the cities. The tourist destinations -- Puerto Plata, Punta Cana, La Romana, etc. -- have their own utility companies, so there are no water or electric shortages in the resort areas.

TW:The D.R. is known as being less expensive than other destinations. As it grows, will increased costs erode its pricing advantage?

Thorne: Other islands will never be able to follow the price levels offered in the D.R. All-inclusive packages fly off the hook here, and I cant get enough of them fast enough.

We do business with 26 resorts in Punta Cana, Puerto Plata, Juan Dolio-Boca Chica and La Romana. All these resort areas have a great future, provided nothing drastic changes. Their room rates remain pretty much the same from year to year because price really is the driving force here.

Wages for hotel workers are modest, and that helps maintain the price point. And the airline industry likes the D.R. We can fill those planes.

Rainieri: I dont think we should talk about less expensive. Instead, its about better value for the money. Its not what it costs but what a visitor gets for the price.

For example, the winter rate at the Punta Cana Resort and Club is $240 per night, double, with breakfast and dinner. On other islands, you cant get a room for that price, yet our rooms are better and bigger and our guests are more pampered.

TW:How does tourism benefit the local economy?

Rainieri: We have grown in 15 years from generating less than 5% of the foreign exchange to 50% today, with Punta Cana alone accounting for 27% of the total. But most importantly, in the region around Punta Cana, there is no unemployment.

We have the highest per capita income in the D.R. This area already is booming, and by 2010 -- when we will have more than 30,000 rooms -- we will provide some 50% more income.

TW:Do you find that Dominicans welcome and appreciate tourists from abroad?

Thorne: The Dominicans are very hospitable. They are good workers, but staffing is hard. They have to bring in staff from other parts of the island. Good employees are in demand.

Rainieri: The hotel associations and others in the private sector in Puerto Plata and Punta Cana work with local people to train them and help them understand the benefits of the tourism industry.

TW:The D.R. has a new president, Leonel Fernandez. Has the government been a partner for your industry historically, and what are your hopes for the new administration?

Rainieri: New government, old government -- none has been my partner. In the 35 years Ive been in Punta Cana, total government investment in the area has been $5 million. Everything thats been developed here, from water companies to the hotel plant, has been built by the private sector.

But for the first time we have a president who understands that the only industry in which the D.R. has proved it can effectively compete is tourism. And that must be one of the key elements of development.

The new tourism minister, Feliz Jimenez, previously served from 1996 to 2000. He returns with more knowledge of the industry. Were working together on a four-year tourism agenda.

Thorne: Jimenez is not coming in with blinders on. He is one of the better choices for the tourism post, and he has travel in his blood.

TW:What roles do ecotourism and environmental preservation play in the development of the D.R.s tourism policies?

Thorne: I would like to see ecotourism and the environment on the national level. Its up to each hotel to put these policies into practice.

Rainieri: If we dont protect our most important assets -- sea, sand and sun -- well lose the Caribbean. Its common sense and good business practice.

To contact reporters Gay Nagle Myers or Kenneth Kiesnoski, send e-mail to[email protected]or [email protected].

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