20002000 Travel News ArchiveNewsTravel

Excess supply of rooms affects hotel profitability

Minister of Tourism Ramon Alfredo Bordas said that this year has been one of the worst for Dominican hotels occupancy-wise. He attributed the problems to the opening of new hotels, with almost 6,000 new rooms entering the market. All destinations have suffered. East Coast destination hotel occupancy has been selling for US$35, down from US$65 in better years. And as a result, tour operators flew their tourists to Punta Cana to take advantage of the low rates, further affecting occupancy in Playa Dorada and other North Coast destinations. The practice of travelers waiting to take advantage of "last minute sales" has also affected Dominican destinations. The decline of the value of the Euro before the US dollar has also affected hotel room sales. Dominican hotel prices are pegged to the US$. Minister of Tourism Bordas is optimistic that the demand will start to climb again with the entry of new US airlines, bringing US travelers. He mentioned the start of Usair, and advanced negotiations with United and Delta for these to start flights from US cities that do not have direct connections to the DR. Bordas spoke at a luncheon organized in Puerto Plata by the Puerto Plata Chamber of Commerce. Minister Bordas alerts, "What is important is not only to fill rooms, but to sell at higher rates so that the flow of visitors can generate more foreign exchange for the country." Meanwhile, Arturo Villanueva, vice president of the National Hotel & Restaurant Association urged the government to continue concentrating on improving the surroundings of hotel enclaves, improving infrastructure, and lighting of major roads and highways, in addition to increasing funds available of advertising campaigns abroad. (6 September 2000)