As Puerto Rico enters its eighth year of recession, struggling with $70 billion in public debt, two investment groups have announced they are betting a combined total of more than $460 million on separate acquisitions on the island.
New York-based Paulson & Co. paid $260 million for a majority interest in the Condado Vanderbilt and La Concha Renaissance Hotel and Tower, while the Encanto Group, a Puerto Rican company, acquired the Punta Candelero Beach Resort and the Palmas del Mar Yacht Club Marina in Humacao on the island’s east coast, about 45 minutes from San Juan.
Paulson’s two oceanfront resorts, located along Ashford Avenue in the Condado district of San Juan, total 802 rooms. They are separated by approximately 200 feet via La Ventana al Mar public park.
The Condado Vanderbilt opened in 1919. It has been shuttered for 22 years, though some of the dining and banquet facilities reopened in 2012.
Paulson spokesman Armel Leslie said, “Work is commencing immediately, and the investment is earmarked to finish the interiors of the two towers, the spa, pool, gym, retail space and the main hotel restaurant.”
The two towers comprise 229 units; the main hotel has an additional 90 units. All 319 units will be operated as a hotel under the Condado Vanderbilt name, Leslie said.
The 483-room La Concha is fully operational. It reopened in 2008 after having been closed since the early 1990s. The hotel underwent a full renovation in 2010, and the rooms were renovated again in 2013.
For its part, the Encanto Group said it plans to invest $200 million to renovate the Humacao resorts. The deal also includes the Solarea Beach Resort condominiums and 24 acres of oceanfront land.
Encanto spokesman Alex Lemond said the company plans to build a beachfront hotel and residences to create a beach destination and watersports center.
Alberto Baco Baque, Puerto Rico’s secretary of commerce and economic development, said the investment will be a significant boost for the island’s tourism economy.
“Adding high-end properties to Puerto Rico’s hotel mix is an important part of the government’s economic development strategy,” Baque said. “The Paulson investment will restore the grandeur of one of the stars of our island. The Encanto project will enhance the tourist experience in a prime destination resort.”
In addition to the investments, Ingrid Rivera Rocafort, executive director of the Puerto Rico Tourism Co., noted several welcome increases in airlift and cruise calls to the island.
“We had a good year in 2013, better than 2012,” Rivera said. “And the forecast going forward is strong, based on the bookings we see at this point in different market sectors, including meetings and events, weddings and the luxury segment.”
New lift includes JetBlue’s daily Chicago-San Juan nonstop service, coupled with the carrier’s interline agreements with Liat and Seaborne, which offer access to new Caribbean destinations from San Juan.
Seaborne continued its expansion out of San Juan with the launch of daily service to Santiago, Dominican Republic, on March 15, an increase to daily flights to La Romana on the same date and daily flights to Punta Cana that began last month.
United added daily year-round service from Chicago to San Juan to its existing service from Cleveland, Houston, Newark and Washington Dulles.
Cape Air began four daily flights from San Juan to Culebra off Puerto Rico’s east coast and launched three daily flights to Virgin Gorda in the British Virgin Islands.
“The entry of Southwest into San Juan helped compensate for the loss of American Eagle last March,” Rivera said. Moreover, she said that Seaborne’s headquarters move from St. Croix to San Juan would create 400 jobs this year and next.
Although total stay-over visitor numbers for 2013 are not yet tallied, the numbers for the January-September period increased 2.3% over the same period in 2012, to 1.13 million. The U.S. market, which makes up 90% of Puerto Rico’s traffic, accounted for 1.1 million of those visitors, up 1.9%.
In cruising, Puerto Rico is even brighter, registering an 8.9% passenger increase in 2013 through September over the same period in 2012. The benchmark is 1.5 million cruise arrivals in 2007.
Work has begun on the $7 million project to extend and reinforce the San Juan cruise pier in advance of the arrival of Royal Caribbean International’s Quantum of the Seas on Dec. 4.
Follow Gay Nagle Myers on Twitter @gnmtravelweekly.