By Alexander Britell
Another day, another new hotel project.
If it seems like the Dominican Republic is dominating the hotel investment sphere in the Caribbean, that’s because it is.
While the country has long been the most popular Caribbean tourism destination by volume, it’s also outpacing the rest of the region in hotel growth.
According to the most recent Caribbean-Mexico hotel pipeline report from analytics firm STR, the Dominican Republic had 3,525 rooms in construction in January, more than any other destination in the Caribbean.
So why is the DR able to succeed in attracting investment?
“The Dominican Republic has been successful for a few key reasons,” Javier Coll, executive vice president and chief strategy officer of Apple Leisure Group, told Caribbean Journal. “The country boasts several easy-to-reach beach destinations North American travelers can get to via nonstop flights within one to five hours. In addition to the country’s mix of culture and scenic beauty, it also boasts several destinations that appeal to a variety of travelers, from those seeking an adults-only experience to those craving family-friendly vacation time. Lastly, there is still beachfront land available for hotel development.”
Indeed, Apple Leisure Group’s AMResorts subsidiary has 14 all-inclusive properties in the Dominican Republic, with plans for more.
But it goes beyond the tourism infrastructure, according to Coll.
“The Dominican Republic is committed to working with the private sector and its government wants to continue growing its hospitality sector, as the tourism industry is currently the strongest job creator,” he said. “In addition to the country’s competitive tax incentives and exemptions for hotels, it offers easy connectivity as several airlines serve cities across the country bringing travelers from major U.S. cities including New York City, Boston, Fort Lauderdale and more. These conditions make the country highly attractive to potential hotel investors.”
Crucially, Coll said, the Dominican Republic has a “fairly well delineated” application process for new projects, “comparably easier than practically any other Caribbean island, and about the same or better than Mexico.”
It shouldn’t be a surprise, then, that the Caribbean coast of Mexico alone has 3,914 rooms in construction, according to STR.
But there’s a price for fast hotel development – potential oversaturation of the market.
That means the need to focus on brand conversion, Coll said.
“Converting a hotel property to a strong brand with experienced hotel or resort management leaders can bring lasting benefits: improved marketing support, a strong network of travel leaders to drive occupancy and rates, and the vision and tools to upgrade your services and your site,” he said.
But he thought that the Dominican Republic might in fact be able to handle all of this growth.
“The country has created a reliable infrastructure that can absorb the increase of visitor numbers,” he said. “For this reason, we are looking at several different opportunities to expand the AMResorts footprint on the island and provide our customers with more alternatives – that includes new builds as well conversion properties.”