Commitment to Luxury Tourism

The all-inclusive European-owned hotels have traditionally dominated the Dominican hospitality market, although these properties have not contributed significantly to the local economy because of their reliance on charter flights, overseas payments of all-inclusive fees (limiting hard currency entering the country), and reduced use of local amenities.  These hotels continue to open up around the island. For example, Sol Melia's new Paradisus Palma Real recently opened in early 2006. It is built next door to the Melia Caribe Tropical, has 600 suites, including 102 suites, and two presidential suites, that have been set apart for even more luxury, with the personalized royal service program. On the premises is a 2,625 square meter spa and large banquet facilities.

The country has begun to develop a reciprocal relationship with its visitors, as it welcomes visitors to enjoy the island’s natural beauty and culture, and targets promotions to higher-income travellers from Canada, Europe, and particularly the US.  The US is now the largest single-country source of visitors to the Dominican Republic, and US tourists’ preferred destination is La Altagracia region, where Punta Cana is located.

More recently, in order to serve the premier luxury market, the Dominican government’s highest priority has become the introduction and promotion of new, luxury branded hotels such as Ritz-Carlton, Conrad, and Fairmont.  As opposed to the all-inclusive resort model of “flipping” guests, their model encourages their guests to stay and enjoy the property, which ultimately directly impacts the local economy.  Moreover, many of these properties will include branded real estate in the form of condominiums and villas, thus ensuring a stable demand base that will return year after year.

Recent Shifts in Government Priorities

As foreign travellers continue to discover, and then return, to the Dominican Republic, the government continues its promotion and development of the country’s tourist zones, specifically the Punta Cana-Bavaro areas.  In its efforts to continue to attract the participation of the private sector, the government has made a concerted effort to improve the existing infrastructure to relieve congestion and pollution that is common in the popular tourist areas.  To that end, the government is working to improve its roads, ports, airports, water, power generation and public services.  For example, last year’s budget for tourism-related infrastructure totalled almost $300 million, which was to include highway construction and repairs, revamping existing tourism areas, new aqueducts and water treatment plants, and beach re-nourishment projects, among others. The country has, as one of its expressed policies, provided tourists with great roads and clean water to ensure that hotels continue to be built, which will always help to stimulate the local economy.

As mentioned earlier, many of the Dominican’s provinces are already saturated with hotels, so the government began to direct some of its tourism efforts toward encouraging developments of other parts of the island.  In 2001, the government passed a law aimed at providing incentives to tourist activities in underdeveloped regions, and in 2002 it further defined the regions or municipalities that would be most benefited by the new law, which included La Altagracia and some interior areas.  And, indeed, the law brought about the intended result.  By the end of 2004, new tourist facilities were beginning to open in the country’s mountainous regions.  The Altagracia province also received renewed attention from foreign investors.

It will be interesting to watch the larger Punta Cana developments mature, and see if the growth in the Dominican is sustainable.  Certainly the government and developers will be searching for innovative development ideas, perhaps along the ecotourism model, to complement what is currently going on.  For now, development is booming, and there does not seem to be an end in sight.