Recession of 2008 and impact on the DR

samanasuenos

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We can all see the Recession of 2008 hitting in the USA - no debate necessary!

So, ...
my 3 questions are:

1. Whether recession in the USA automatically spells disaster for the DR. Or could there be some benefits?

2. Either way, what effects might we start seeing?

3. And...Has anyone seen effects so far?

I am just wondering. It may not be ALL bad in the DR. For example, if folks can't afford a house in the USA and lose it - maybe they'll look for one abroad. And I suppose a recession in Canada would reak more havoc down south! :)

'Just throwing it out there for thoughtful debate.

Thank you,
Sammy - concerned for the country of my Suenos (DR)
 
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andrewc52002

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If you lose your house in USA, I don't think you'll go down there to buy another one. Recession in US & Canada it's bad news for DR.
The first effect will be less North American tourists and expats in DR. This will be visible. The economy will be affected too, for sure, part of it being the tourism. But not only that. God help us to see the end of the tunnel !
 
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samanasuenos

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Gracias Andrew!

If you lose your house in USA, I don't think you'll go down there to buy another one. Recession in US & Canada it's bad news for DR.
The first effect will be less North American tourists and expats in DR. This will be visible. The economy will be affected too, for sure, part of it being the tourism. But not only that. God help us to see the end of the tunnel !
Hola Andrew. About losing one's home - hey, if ya lose your house and had been daydreaming of relocating to the tropics anyway....if ya have little to lose....just wondering!?

I agree that tourism will feel it. But beyond the obvious, what less obvious impications might there be?

Yes, we can pray and hope that the soup lines do not start - in the USA, or anywhere for that matter.

Thank you, Sammy
 

cobraboy

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Canada is heading for recession?:surprised

Tourism aside, I imagine remittances to families in the DR will drop, effecting local non-tourist economies.

RE prices in the DR may go down due to lowered demand.

Reduction of airline service to the DR due to lowered demand.

Just off the top of my head.
 
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Mooseman

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Canada is heading for recession?:surprised

Tourism aside, I imagine remittances to families in the DR will drop, effecting local non-tourist economies.

RE prices in the DR may go down due to lowered demand.

Reduction of airline service to the DR due to lowered demand.

Just off the top of my head.
According to financial pundits here, Canada will not be affected to the same depth as the US. In past recessions, save the last one, we very much got dumped when they did, but we seem to have grown away somewhat and have more resilience now. That's my take; not a professional view - just quoting pundits. What is a pundit, anyway? :cheeky:
 
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margaret

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I think MORE Canadians will come to the Domincan Republic as it's one of the cheapest destinations for Canadians. Although there is growing anxiety about a job loss and the economy, the latest polls show that 45% of Canadians a willing to pay a 5% carbon tax because they are MORE concerned about the environment.

DR is one of cheapest vacations for Canadians; in fact it's cheaper to vist POP for one week than Montreal, Calgary, Vancouver etc. or even renting a cottage for a week. Cuba and Mexico are the biggest competitors for Canadian tourists.

Travel by Canadians to foreign countries, top 15 countries visited

While these stats are from 2006, you can see that visits have been increasing since 2001. Dominican Republic is only 3 hours away allowing for short visits with a smaller carbon footprint than a trip to Spain. Some might spend less money, but you might find that you will attract a more affluent class of tourists in DR who will spend MORE money as they change their choice of destination from Aruba or St. Barts for example to DR. Also, if ecotourism and adventure vacations are developed more in the DR, you might be able to capture some of the market that travel to Costa Rica and other destinations.
 
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Bronxboy

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Spending is way down in the USA.

This will mean that tourism will be down all over the world!!!!
 
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andrewc52002

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Hola Andrew. About losing one's home - hey, if ya lose your house and had been daydreaming of relocating to the tropics anyway....if ya have little to lose....just wondering!?
The mentality up here is that if here is bad, down there must be worse. And when you got problems (job, finance, RE, etc.) you don't think too much about vacations. It's not for all, but that's the majority.
 

andrewc52002

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My curiosity again. What happened in DR during previous recessions ? Who lived through them maybe are willing to share the experience. Thank you.
 

korejdk

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Some might spend less money, but you might find that you will attract a more affluent class of tourists in DR who will spend MORE money as they change their choice of destination from Aruba or St. Barts for example to DR.
I doubt that the St Barts crowd would switch to the DR anytime soon...
 

margaret

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I doubt that the St Barts crowd would switch to the DR anytime soon...
I have two girlfriends who went from DR quite often to St Barts, I thought they might switch back if they had to. But they think DR is too sleezy with all the sex tourism, I think they go to St Barts to be with a better crowd, better food, shopping, entertainment.
 

margaret

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Don't blink twice!!!:paranoid:
That totally went over my head. :) Could you elaborate?

Well I think there's room for more 5 star hotels and more imaginative adventure tours that take people to the isolated beauty of the island.
 

Ringo

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I fear that the US has been in trouble for some time and will get worse over the next few months to a year or more. (I study the markets and saw this coming two years ago.)

With the US $ down, and most likely will continue to fall, good for tourest/buyers from other countries peoples to go to the US.

As for the Dominican Republic? IF you could get the Hotels and tourest. real estate people to give you an honest answer... that would tell us a lot. (Some have asked me... where the tourest?)

As far as people coming to the D.R. instead of thier other regular vacation places, not likely. They may have to fly on regular flights 1st class, rather then private jets and leave their horses and staff home. (Yes, some do bring them.) I have noticed that the private chartered yatches that pass by my place on the North Coast, are about 1/3 of last year.

Keep in mind that the Peso is valued mostly on the US dollar and it takes a few months for the full effect to take place in the DR. England takes about 6 months with Europe about another 6 months to show up on a local basis.

Hold on. Regards, Ringo
 

PICHARDO

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Just to give you a tangible idea of how bad it's hurting right now in the US:
Here in Orlando FL alone biz is down 25% since Sept last year, and this Jan is not looking any better or at least signs of improving the trend...

Just to make the pain more understandable our company just lost 1 million in sales compared to the same period of FY 2006-07...

Gas is sure going up but people are using less and less, as inventory stalls, the costs are amounting and not easing as much as before if any...

We're confronting the same issues in NYC and Los Angeles CA...

Is not something that affects any particular City or State, but nation-wide.

Recently I attended a meeting with Chevron top honchos and the news is bleak in the short term and not even talked about for the long term. The issues at hand are that even thus Chevron has inventory to supply the market as needed, over-inventory is increasing the loss of revenues to obtain a steady future supply should the barrel prices continue their surge in price.

The housing slump became just an add on to the heavy load the market was under for so long, had the FED cut rates as expected earlier in the year by at least 3/4 to a point; this whole mess could have been avoided and at worst, current inflation would have been more manageable than the increase of soon to come lay-offs will have in the overall crisis.

Only our company will lay off some 1/4 of the work force in the next cycle at least, if things don't improve by then, some 1/3 will have to be cut...

Inflation is growing at record speed and basic foods are becoming more and more out of the pocketbook's reach of many families here. Since most jobs are oriented towards non basic needs, I see a dire projection for the market as a whole soon to come...
 

PICHARDO

One Dominican at a time, please!
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That totally went over my head. :) Could you elaborate?

Well I think there's room for more 5 star hotels and more imaginative adventure tours that take people to the isolated beauty of the island.
The DR is fast becoming the playground of the top dollar tourism "Elite".
The building of multiple 5 star hotels is only the icing on the cake, as more and more of them make the DR their second home to rest in the secluded areas being built all around the country hush-hush...

Like I said: Don't blink twice!!
 

mido

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I agree with Pichardo!
Only the middle and low class destination will suffer.
High end destinations will always be visited because rich people usually don't suffer from resessions.

The DR also could try to "reaninmate" the European market, there is buying power there.
 

PICHARDO

One Dominican at a time, please!
May 15, 2003
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I fear that the US has been in trouble for some time and will get worse over the next few months to a year or more. (I study the markets and saw this coming two years ago.)

With the US $ down, and most likely will continue to fall, good for tourest/buyers from other countries peoples to go to the US.

As for the Dominican Republic? IF you could get the Hotels and tourest. real estate people to give you an honest answer... that would tell us a lot. (Some have asked me... where the tourest?)

As far as people coming to the D.R. instead of thier other regular vacation places, not likely. They may have to fly on regular flights 1st class, rather then private jets and leave their horses and staff home. (Yes, some do bring them.) I have noticed that the private chartered yatches that pass by my place on the North Coast, are about 1/3 of last year.

Keep in mind that the Peso is valued mostly on the US dollar and it takes a few months for the full effect to take place in the DR. England takes about 6 months with Europe about another 6 months to show up on a local basis.

Hold on. Regards, Ringo
The DR will see the aftershocks of the USA's recession via the Diaspora that makes their impact with remittances year after year...

About less tourists calling the DR, the reverse is happening; more and more of the tourists that call port in the DR are spending more and many are buying property here as soon as it's put up for sale, like hot cakes out of the oven...

The less transit you see of yachts coming and going by your house looking towards the sea is mostly because more and more of those are mooring for long stays in the docks, unlike before...

Just take a stroll by most of the marinas and try and see if you get lucky getting a slot for any 50+ footer there...

As for 1st class flights, tough luck! Most airliners have made away with the 1st class definition towards the "Biz" travelers...

About the US Dollar taking at least 6 months to have the ripple effect in the DR's economy, yes, if we were living back in the early 1980's maybe...

Nowadays the DR market is as much dynamic as the European or Asian is to the US. The effects are swift and sometimes need the trade on floors to be stopped cold to avoid catastrophes...

The thing you must separate the DR market from the US recession, is that no longer the DR keeps all the eggs in US $ but Euros as well...

The DR's banks are awashed with extra income and projections never looked better, as the internal revenues due to better accounting and corporate audits are proving to make past debtors the new poster boys for good clients the norm.
 

Ringo

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Pichardo, I agree with you views on the US situation. I do believe that it will have world wide ripple effect. One has to look at not just a housing/money market but everything that effects; gasoline, heating fuel, food, cloths... every day items in the US and other parts of the world have gone up effecting the everyday spending of everyone... very rich people included.

There may be a good thing being in the D.R. The relationships with some.... ah... ah.... South American Countries may help the D.R. keep things more under control.

Mido, the D.R. is mostly known as being a destination for lower and middle income people and they/D.R. will cut the travel... Keep in mind... when the lower and middle income do not spend (over a period of time), the upper incomes go down also.

Regards, Ringo
 

PICHARDO

One Dominican at a time, please!
May 15, 2003
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What am I saying!!!!!!!!!!!!!!!!

If you're a foreigner reading these posts:
Don't come to the DR to buy property here!! DR is a high risk market! You can lose you hard earned money in the blink of an eye!!
Don't think that because Donald Trump is building like there's no tomorrow for land in the DR, don't come and buy!!!


Honest!!!!
The DR is not a solid economy and will bend like a twig in the wind!!!!
Go to Bahamas, etc... To buy land and build your Caribbean nest! If you want to live in a good climate go to Costa Rica (much better than the DR, ask Robert of DR1) or Colombia...

The DR will take your money and leave you penniless in a jiffy! Only Dominicans invest so much here and have so many crazy ideas for the tomorrow because they can't just use the dry feet policy of Cubans in Miami...

Just come as a tourist if you want, but don't buy any property here or worst try to make residence here!!

Honest!!!!