Tourism collapses 87% in August

chico bill

Lobotomy Surgeon
May 6, 2016
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Well the numbers are in and it seems worse than I thought - no tourism industry can survive very long with such abysmal numbers.

 

Andre14615

HOW BOUT DEM COWBOYS!
May 31, 2019
454
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Well the numbers are in and it seems worse than I thought - no tourism industry can survive very long with such abysmal numbers.

Thats a huge blow but im sure its probably the same at most tourist destinations around the world.
 
Jan 9, 2004
9,138
490
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Well the numbers are in and it seems worse than I thought - no tourism industry can survive very long with such abysmal numbers.

When 8% of your GDP ( I believe its closer to 10%) takes this kind of a hit and with little relief in sight for tourism (my personal opinion is that it will take until November of 2021 to stabilize) the real damage to the economy is still to come.

Tourism is the top generator of foreign exchange. With the DR's external debt due in dollars, the DR will need to buy/source dollars en masse offshore. Economically speaking, the bottom line effect of that will be a much weaker peso and the likelihood of increased taxes.

Respectfully,
Playacaribe2
 

lifeisgreat

Devils playground
May 7, 2016
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Well the numbers are in and it seems worse than I thought - no tourism industry can survive very long with such abysmal numbers.

They are all bad Mexico too... I’m not surprised everyone I talk to won’t travel right now.. most are Renovating something in there house instead this yr traveling..
 
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franco1111

Bronze
May 29, 2013
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The "professional" property managers in Punta Cana are certainly not helping boost the numbers. Rental prices are still high. They may be waiting to see how things shape up in November and December.
 
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johne

Silver
Jun 28, 2003
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When 8% of your GDP ( I believe its closer to 10%) takes this kind of a hit and with little relief in sight for tourism (my personal opinion is that it will take until November of 2021 to stabilize) the real damage to the economy is still to come.

Tourism is the top generator of foreign exchange. With the DR's external debt due in dollars, the DR will need to buy/source dollars en masse offshore. Economically speaking, the bottom line effect of that will be a much weaker peso and the likelihood of increased taxes.

Respectfully,
Playacaribe2
How does a country "buy dollars"? Is that done by issuing debt instruments of some sort? Or do they simply buy the dollars through the central banking systems? Or?
 

johne

Silver
Jun 28, 2003
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If your prediction of a tourism recovery is correct (Nov. 2021), and if Covid is then is in our rear view, the President will win more than a gold star for his performance in the eyes of the nation. He will be all set and ready for a reelection campaign, if he figures out how to pay the country's debt.
 

GusFring

On vacation
Apr 15, 2020
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The DR can never pay off the debt and bonds it has floated to begin with and the President is out there rallying up the troops for development expansion in Perdenales.
The national debt is at least 50 Billion and estimated to be 75 Billion by 2024.
It's just a big shell game. Money will be "found" and plundered to weather the storm. This administration will have plenty to squander on aunts, uncles, sisters and cousins.
This is a 3rd world politicos dream scenario.
 
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Jan 9, 2004
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How does a country "buy dollars"? Is that done by issuing debt instruments of some sort? Or do they simply buy the dollars through the central banking systems? Or?
Both.

Or they "borrow" them from the Dominican bank accounts of exporters who are paid in dollars. Or they borrow them as dollar remittances are sent to the country (As an aside, there has been a shortage of dollars to pay remittances sent in dollars............because the government has "borrowed" them to satisfy its ongoing debt obligations on current bonds etc).

Or they get dollars by attracting fdi (foreign direct investment) in the country.

But, they are starting to rob Peter to pay Paul.

They are growing desperate for dollars by dropping the Covid testing requirements for tourists and by offering travelers insurance (limited time) to come to the DR. That is a huge gamble. If a Covid resurgence occurs, they will have set back even my optimistic time frame for a recovery (November 2021).


Respectfully,
Playacaribe2
 

johne

Silver
Jun 28, 2003
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Both.

Or they "borrow" them from the Dominican bank accounts of exporters who are paid in dollars. Or they borrow them as dollar remittances are sent to the country (As an aside, there has been a shortage of dollars to pay remittances sent in dollars............because the government has "borrowed" them to satisfy its ongoing debt obligations on current bonds etc).

Or they get dollars by attracting fdi (foreign direct investment) in the country.

But, they are starting to rob Peter to pay Paul.

They are growing desperate for dollars by dropping the Covid testing requirements for tourists and by offering travelers insurance (limited time) to come to the DR. That is a huge gamble. If a Covid resurgence occurs, they will have set back even my optimistic time frame for a recovery (November 2021).


Respectfully,
Playacaribe2
Many thanks for your explanation. One other question. Do they "borrow " the dollars without a set-off in the value of the peso vs, the dollar? In other words, is this an even swap or is there an accounting that "charges them" for the net difference of the swap of the falling peso? (A loss to the government. )
 
Jan 9, 2004
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Many thanks for your explanation. One other question. Do they "borrow " the dollars without a set-off in the value of the peso vs, the dollar? In other words, is this an even swap or is there an accounting that "charges them" for the net difference of the swap of the falling peso? (A loss to the government. )
No. They merely borrow incoming dollars today, pay off existing obligations, then put them back as new dollars enter the country.

If that sounds akin to a Ponzi scheme...........it should. They always need a new steady supply of dollars to pay back prior existing obligations. When the new dollars stop/slow, as is the case now, the trouble begins.

And when/if that trouble gets out of hand...........they appeal to the IMF (the lender of last resort) for a bailout.

Respectfully,
Playacaribe2
 
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chico bill

Lobotomy Surgeon
May 6, 2016
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The "professional" property managers in Punta Cana are certainly not helping boost the numbers. Rental prices are still high. They may be waiting to see how things shape up in November and December.
You are right the people with Hotels, AIs and villas & apartments to rent need to do, what used to be taken advantage of in the record industry (when their were records), and has now become a standard marketing tool. Loss Leaders
Promote your product at a reduced price, break even, or even a loss, to attract new and soon to be future repeat customers.

Maybe you rent your villa for 65% of normal rate now and hope to get a few Canadians, Americans or Europeans returning next season for a few weeks. They will understand when the price goes back up post Covid.

Tourists are creatures of habit in wanting to return to something familiar, where they have made a few friends, know some shops, bars, restaurants, maybe a favorite local girl and they feel they know their 'way around' - After all that is how the Timeshares came about - a marketing plan to hook the repeat destination tourist.
 

johne

Silver
Jun 28, 2003
3,897
628
113
Both.



They are growing desperate for dollars by dropping the Covid testing requirements for tourists and by offering travelers insurance (limited time) to come to the DR. That is a huge gamble. If a Covid resurgence occurs, they will have set back even my optimistic time frame for a recovery (November 2021).


Respectfully,
Playacaribe2
Now
No. They merely borrow incoming dollars today, pay off existing obligations, then put them back as new dollars enter the country.

If that sounds akin to a Ponzi scheme...........it should. They always need a new steady supply of dollars to pay back prior existing obligations. When the new dollars stop/slow, as is the case now, the trouble begins.

And when/if that trouble gets out of hand...........they appeal to the IMF (the lender of last resort) for a bailout.

Respectfully,
Playacaribe2
Now! we are getting somewhere. This is valuable and interesting information, to me at least. Thanks.Yes, sounds like a class AAA Ponzi scheme.
 

FGUnsworth1

New member
Oct 18, 2003
25
4
3
Both.

Or they "borrow" them from the Dominican bank accounts of exporters who are paid in dollars. Or they borrow them as dollar remittances are sent to the country (As an aside, there has been a shortage of dollars to pay remittances sent in dollars............because the government has "borrowed" them to satisfy its ongoing debt obligations on current bonds etc).

Or they get dollars by attracting fdi (foreign direct investment) in the country.

But, they are starting to rob Peter to pay Paul.

They are growing desperate for dollars by dropping the Covid testing requirements for tourists and by offering travelers insurance (limited time) to come to the DR. That is a huge gamble. If a Covid resurgence occurs, they will have set back even my optimistic time frame for a recovery (November 2021).


Respectfully,
Playacaribe2
By dropping Covid testing and paying tourists to 'Come on down' by offering Travel Insurance, a resurgence of the Covid-19 will surely follow infecting the entire island and its people. Not until they control Covid-19, will they be able to control the economy. I agree with your optomistic timeline of late 2021.
I am in Boca Chica now and have decided to leave before the onslaught of unbridled tourists head this way. I will spend a cold, hard winter in Canada next to my furnace and nearby hospitals and watch the numbers from there
 

ctrob

Silver
Nov 9, 2006
5,271
390
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You are right the people with Hotels, AIs and villas & apartments to rent need to do, what used to be taken advantage of in the record industry (when their were records), and has now become a standard marketing tool. Loss Leaders
Promote your product at a reduced price, break even, or even a loss, to attract new and soon to be future repeat customers.

Maybe you rent your villa for 65% of normal rate now and hope to get a few Canadians, Americans or Europeans returning next season for a few weeks. They will understand when the price goes back up post Covid.
It's not worth it to drop rates just to have warm bodies coming through. What you'll get is the bottom feeders (who complain about everything, steal things, break things and leave bad reviews) and the surprise party guests that let in 50 friends and who will do more physical damage then they have in a security deposit. There's nothing to gain from it when you're managing your rentals on HomeAway/Airbnb/Booking sites. With Booking, they make vetting a renter very difficult.

I have all my villa/condo rental rates at normal non-covid prices. No renters but that's fine for now. Once international traffic picks up, I might do something then to entice a few customers. And they'll be lots of renters to choose from. But for now empty is fine.
 

ramesses

Gold
Jun 17, 2005
6,288
218
63
If your prediction of a tourism recovery is correct (Nov. 2021), and if Covid is then is in our rear view, the President will win more than a gold star for his performance in the eyes of the nation. He will be all set and ready for a reelection campaign, if he figures out how to pay the country's debt.
There is another election coming in the DR?
 

chico bill

Lobotomy Surgeon
May 6, 2016
7,146
1,144
113
It's not worth it to drop rates just to have warm bodies coming through. What you'll get is the bottom feeders (who complain about everything, steal things, break things and leave bad reviews) and the surprise party guests that let in 50 friends and who will do more physical damage then they have in a security deposit. There's nothing to gain from it when you're managing your rentals on HomeAway/Airbnb/Booking sites. With Booking, they make vetting a renter very difficult.

I have all my villa/condo rental rates at normal non-covid prices. No renters but that's fine for now. Once international traffic picks up, I might do something then to entice a few customers. And they'll be lots of renters to choose from. But for now empty is fine.
How will tourists (from outside DR) let in 50 friends ? That doesn't make sense.
I am not talking about marketing to Dominicans, who no matter what the price they might let 50 friends in because that's how they socialize and vacation.

But if you want to wait until all the quarantines are lifted from in & outside the country and tourism restored to pre-Covid levels I fear you might have those empty units for a couple more years.
If you don't need the money then that's probably OK. I suspect many others need cash flow and soon.