Enrique de Marchena, president of the Caribbean Hotel & Tourism Association, in St Lucia addressed the challenges ahead and lessons from the global financial crisis to be learned for the Caribbean and the Dominican tourism industry.
“Projects that did not have a large level of leverage will continue,” he said, commenting on how this is shown in the local Grupo Vicini opening of major investments at the Port of Sans Souci in Santo Domingo.
Michael Head of St. Kitts commented that even projects such as the Mandarin Oriental in St. Kitts are on hold. “Hotels and banks don’t go together these days,” he says.
In the DR, operators Four Seasons (La Romana), Ritz Carlton (Cap Cana, yet to be started) and Westin (Roco Ki) have delayed construction and opening due to difficulties in securing financing. But within the past two months the Fernandez government has been present at start of construction of three new mega projects, Vista Cana, Punta Perla and Nuevo La Romana.
De Marchena is cautious about projects starting out in these difficult times. He said it is time to “separate what is illusion and what is reality.”
“These are days when only hard work is going to make a difference,” says De Marchena. He stressed that a record number of booths, 406 at Marketplace 2009 is evidence the private sector is willing to go the extra mile. This is up from 397 in 2008 and 371 in 2007.
Referring to the DR, he said to look to the case of St. Lucia where the government is banking on building on its present “simply beautiful” campaign, and will only be changing its logo to the Pitons, to be more authentic. They will maintain their present emphasis on boutique hotels, the ecological component and give better use to their advertising dollar. He criticized the DR Ministry of Tourism announcement that it planned to launch a whole new campaign.
“One of the lessons learned at Marketplace is that a time of crisis is not a time to change campaigns. You can confuse the consumer,” he said.
De Marchena said the DR’s big achievement in recent years was to have diversified markets, to reduce dependence on any particular market. “We can have the luxury of having an attractive offer over the wide range of 3 to 5 star properties. He highlighted the way in which investors have used 158-01 to create complementary offers.
On the issue of real estate developments, he said that those that are best prepared would survive. “Others that came with the wave, will leave with the wave,” he predicted.
He said the DR is no newcomer to slowdowns. He said in 2001, many 3-star hotels that were not competitive didn’t make it and were pushed out of business.
Now from his vantage point of overview of the Caribbean after his first months as president of CHTA, he comments that hotel infrastructure in the DR is excellent, at least on a par with some of the best in the Caribbean. “Where we are lacking is in public infrastructure, that is lagging behind”. Furthermore, he says the greatest challenge to the country is the deficient electricity service.
On the downside, he says there is still a generalized feeling that regional governments do not yet understand the importance of tourism for their countries, despite the fact that it represents 20 to 70% of GDP. “Neither do they understand the magnitude of the crisis, and pretend it will not impact them,” he commented.
In his own words at the opening ceremony, De Marchena set the tone. “Working together we can overcome challenges and create new opportunities to remain the number one warm weather destination in the world.”