Perfect Location

The Dominican Republic is unique in its centralized Caribbean coordinates that make it a great tourist destination: it is at the nexus of South, Central, and North America, as well as Europe, and tourist statistics reflect the fact that visitors find its geographic location ideal.  The tourism and travel industry in the Dominican generated approximately $8.1 billion in 2006, growing 4.5% over 2005.  Last year saw record arrivals nationwide, surpassing numbers on a quarterly as well as annual basis.  According to the central bank, foreign air travel into the country totalled 3.3 million visitors, an increase of 8% over 2005.  And, already this January saw a 5.5% increase in non-resident tourists entering the country as compared to the same period last year.

With 76% of last year’s international arrivals being foreign tourists, the Dominican Republic historically attracts more European visitors (primarily from the UK, Spain, and Germany) than North American visitors.  However, last year almost 48% of foreign visitors came from the US and Canada, surpassing for the first time its Europeans counterparts.

Meanwhile, hotels developers are working to keep up with the demand.  The number of rooms grew at an average annual rate of nearly 3% during 2000-2005, and 2006’s estimates are closer to 8%-9%.  This brings the total number of rooms on the island to 65,000.  Of the newcomers, Sol Melia’s Paradisus Palma Real opened in May 2006 with 554 suites, Cap Cana’s Villas Caleton began accepting guests, and four Gran Bahia Principe all-inclusive properties debuted in the fall and added 996 rooms.

Occupancy rates in the Dominican Republic traditionally stand at more than 70%, except for 2001 and 2002 when the global tourism industry suffered from the events of September 11.  As a testament to its growing popularity, the occupancy rates have remained stable even as the island continues to add rooms.

When tourists visit, they typically will stay an average of 9.5 nights.  Over 70% of the hotels have foreign operators and management companies. Among the international chains currently operating in the country are Sol Melia, Occidental Hotels, Barcelo, Howard Johnson, InterContinental, Renaissance, Allegro and Accor.  However, the market, especially Punta Cana, is dominated by all-inclusive hotels.

The island’s friendly tourism environment, low operating costs, lower local wages and food and beverage production, has clearly made the Dominican Republic more attractive to tourists and international brand operators alike.  This growth has been further enhanced by the damage done to competing hotels’ slow recovery to profitable room supply in the Yucatan Peninsula in Mexico from recent hurricanes and the subsequent wave of re-bookings at Dominican resorts.  Moreover, the re-bookings are expected to have a permanent effect on the sector, especially when those tourists experience the low density and spectacular beaches in the Punta Cana region.