Este informe no está disponible en español.


Tourism Targets Reluctant Travelers

The Puerto Rico Tourism Co. unveils new $18 million plan to boost ailing tourism industry; brings back Fly Free promotion and targets bread-and-butter U.S. mainland markets with media blitz, more Fly Free promotions, and other incentives


August 8, 2002
Copyright © 2002 CARIBBEAN BUSINESS. All Rights Reserved.

If it ain’t broke, don’t fix it: Fly Free program returns, along with stateside media blitz.

The Puerto Rico Tourism Co. announced yesterday a $17.9 million business plan for fiscal year (FY) 2003 to help the ailing local tourism industry.

The plan, which will consume more than half of the agency’s total $30 million advertising and public relations budget, is designed to lure those in the U.S. (the island’s bread-and-butter tourism market) to Puerto Rico through enticing programs such as Fly Free to Puerto Rico, advertising in secondary U.S. markets, hefty public relations efforts, new nature attractions, strategic alliances, and other initiatives.

If it works, don’t change it–Fly Free returns

To help boost hotel bookings for the traditionally slow months of September and October, the government is again pumping over a million dollars into the island’s most effective promotion since 9/11: Fly Free to Puerto Rico.

The Tourism Co. will purchase up to 3,000 tickets on American Airlines, United Airlines, US Airways, and Spirit Airlines from such U.S. gateways as JFK, La Guardia, Chicago/O’Hare, Miami, Fort Lauderdale, Los Angeles, San Francisco, and San Diego for use as incentives for travel wholesalers, travel agents, wholesale operators, and hotels. The booking window starts Aug. 18 and will close on Aug. 25.

"We are relaunching Fly Free as a big advertising effort after consulting with the airlines and hoteliers and finding out that advance bookings looked weak. Obviously we had to do some kind of promotion that could produce room nights right away," said Milton Segarra, executive director of the Puerto Rico Tourism Co. "We secured the top markets, where we know tourists travel to Puerto Rico and that there’s significant airlift, and the travel wholesalers will do some cooperative advertising to cover the other cities where they have retail operations."

Fly Free was first launched in response to 9/11 and was extended through April. The Tourism Co. spent $2 million on the program and bought 10,000 airline tickets, which were distributed to travel wholesalers who sell Puerto Rico according to their sales volume. Some of the funds went to the Puerto Rico Convention Bureau, which gave a thousand $100 vouchers toward the purchase of airline tickets to qualifying group and convention business travelers. The Fly Free promotion generated over 28,000 room nights last year.

Under the newest Fly Free package, tourists who book a minimum five-night stay in Puerto Rico from Sept. 1 to Nov. 1 will receive two free airline tickets. The Tourism Co. hopes the promotion will generate at least 12,000 room nights.

Securing key U.S. markets

The east coast of the U.S., in particular the Tri-State area (New York, New Jersey, and Connecticut), is Puerto Rico’s top market. The Tourism Co. is going to protect that turf through television advertising and wholesaler support. It plans to continue airing the $14 million "You’re not Dreaming…You’re in Puerto Rico" campaign, which was launched in October 2001.

The Tourism Co.’s TV advertising budget for FY 2003 is $7.4 million, while $1.3 million has been allocated for print media. Its total U.S. advertising and public relations budget is $14.9 million.

The agency also will continue advertising in core travel magazines such as Conde Nast and Travel & Leisure, as well as in such second-tier magazines as Travel Holiday, National Geographic Traveler, and Arthur Frommer’s Budget Travel.

"We are going to protect the Tri-State and will also be shifting more advertising dollars into secondary U.S. markets, a.k.a. geographic expansion markets such as Miami/Ft. Lauderdale, Dallas, Chicago, and Los Angeles," Segarra said. "The same pattern will follow with public relations." The Tourism Co. will invest $2.8 million in newspaper and TV coverage solely in Dallas, Los Angeles, and Chicago.

"This type of effort into secondary markets wasn’t done in the past as we are doing it now, with specific industry partners such as wholesaler and airline support," Segarra said. "We’re going to maintain Puerto Rico’s presence at an adequate level, but we’re also diversifying the potential usage of our advertising dollars. We believe that the balance of TV spots plus effective print coverage and co-op advertising with wholesalers will maintain our market share in the U.S. mainland."

As for its international plan, the Tourism Co. will invest $700,000 to launch a print campaign in Spain, Germany, and the United Kingdom. Additional funds will be spent on co-op advertising efforts with wholesalers. In Latin America and the Caribbean, the agency will carry on with advertising in print and at bus shelters. The Tourism Co. will also introduce advertising via cable TV and is negotiating with a credit card partner to target those markets.

Capitalizing on advertising

The Tourism Co. feels it is important that the advertising and promotion efforts proceed hand in hand with the public relations activities. After all, the two rely on each other. Promotions attract media attention while public relations leverage the coverage.

"Public relations is a big area of opportunity for Puerto Rico because we were lacking a consistent effort," Segarra said. That is in part due to changes in the agency’s top management last year.

"I estimate that Puerto Rico was over a year without a public relations plan," said Segarra. "Besides the political issues last year and 9/11, when I came aboard we selected Ogilvy Public Relations and it didn’t work the way we had planned. Now we have Edelman Public Relations as the Tourism Co.’s official agency."

The Tourism Co. will spend $1.9 million on public relations in FY 2003. Edelman’s job will be to create a fresh, consistent brand identity for Puerto Rico that will stick with both travelers and the media, which industry insiders say is crucial (CB June 13). The agency will reintroduce the island through an aggressive media relations program and a responsive news bureau, will conduct trade media outreach and support at industry events, and will prepare a solid crisis management program.

The second phase for the public relations agency consists of building relationships with other brands and with local tourism partners; identifying opportunities to work with cruise lines and promote pre- and post-cruise packages; and infusing Puerto Rico into the pop culture through department-store promotions, trip giveaways on game shows, on-location catalog shoots, and inclusion in TV show storylines.

The Tourism Co. and the Office of Youth Affairs have developed the "Young at Heart" program to make the San Juan port more attractive and livelier, responding to a complaint of the Florida-Caribbean Cruise Association (CB Feb. 14). The program, which starts this month, will include musical groups who will warmly receive cruise passengers and teach them about Puerto Rico’s culture through salsa and plena songs and dances. There will be five shows a month from July through October and 20 shows a month during the high season, Dec. 15 to April 15.

New nature-adventure parks

Another new initiative involves converting some of the island’s nature preserves into eco-adventure parks. "Nature and adventure is one of the specialized markets that we are developing to diversify the industry," Segarra said.

The Tourism Co. will invest close to $500,000 to transform the 400-acre Humacao Nature Reserve into a park where visitors can rent kayaks and mountain bikes, go swimming or rappelling, or simply watch the birds. The development, which is being conducted in an environmentally conscious manner, is to be completed in 2003.

The Tourism Co. has identified two other candidates for this effort: Tortuguero Reserve in Vega Baja and Cambalache Forest in Arecibo, which currently features camping facilities, hiking trails, and a mountain bike trail.

Building strategic alliances with Orbitz and Esso

The Tourism Co. has formed a partnership with Orbitz Inc., the nation’s third largest travel website, whereby the online travel agency would become the booking engine for, the Tourism Co.’s official website.

Orbitz, which is owned by Continental Airlines, Delta Air Lines, Northwest Airlines, United Airlines, and American Airlines, claims its site can search more than two billion fares and flights on more than 455 airlines as well as hotel and rental-car rates.

"Now visitors can go to our website to make a reservation and they will have the complete software support of all Puerto Rico’s products in Orbitz," Segarra said. "We chose Orbitz because it is one of the best online travel agencies in the business and most important, it is not our expertise or our business to do booking engines."

The Tourism Co. entered into another strategic alliance with local Esso service stations. Esso is a wholly owned subsidiary of Exxon Corp. In the first phase of the plan, the agency will invest $150,000 to install eight interactive tourist information booths at key Esso stations on the island by December; the first will be in Aguadilla and Fajardo. The web-based electronic kiosks, which resemble automatic teller machines, will provide maps and directions to tourist attractions.

"Driving in Puerto Rico is sometimes difficult due to the lack of signage," Segarra said. "These new machines will make trips to tourist attractions on the island much easier."

Improving service

Puerto Rico will be the first Caribbean island to establish the SuperHost program, a complete training course that emphasizes the importance of customer service in the hospitality industry. The program, which originated in British Columbia, will be launched in Culebra this September at an investment of $85,000. According to the Tourism Co., tourism employers in Canada require that employees have a SuperHost certificate before they can be hired.

"Normally we get average ratings in terms of service at our hotels, but with proper training we can support all the tourism work force to be better," Segarra said. "I’m looking to implement the SuperHost program for at least three years."

Another service program to be implemented in FY 2003 is the Tourism Quality Control program, developed to train and evaluate hotel staff. It has three components: the mystery guest for on-site inspection, train the trainer (on-site training), and the quality card. The latter is a new component that permits evaluation by the customers, providing immediate, targeted feedback on which areas need to be addressed.

The two firms working with the Tourism Co. on this enterprise are the Freeman Group and Canada-based Diamond Hospitality Group. Seventy-six hotels–nine large hotels, 21 midsize hotels, 21 small inns, and 25 paradores–will participate in the program.

Business Intelligence program

Led by the belief that research is the eyes and ears of successful marketing, the Tourism Co. has developed an integrated, comprehensive approach to statistics gathering, processing, and analysis.

The innovative model relies on a diverse marketing database and advanced software known as Business Intelligence. The data is integrated into the process for tourism development, which includes planning (identifying objectives for the marketing plan), research (analyzing customers and choosing targets), testing (the design and implementation of the campaign), and validation (measuring the results).

Of course the results are only as reliable as the starting data. That’s why the Tourism Co. is working to create a centralized storehouse of data from a wide variety of sources. The data goes beyond hotel room nights and number of visitors so that it can be a true reflection of total economic impact and activity.

"Right now we are sampling 28 hotels out of the 118 Tourism Co.-certified hotels on the island. As we progress in the system, we will be able to expand and make the sampling bigger so the results will more accurately reflect the state of the industry," Segarra said.

In the aftermath of 9/11, nearly one year ago, it seemed that Puerto Rico’s–and for that matter, the world’s–tourism industry would be devastated for months. And while the fallout hasn’t been as bad as originally anticipated, Puerto Rico's tourism industry continues to hobble, partly because of lingering post-9/11 travel jitters and partly because of the sour economy in the U.S. and throughout most of the world.

Fears of another terrorist attack are easing, but local hoteliers are still noticing that the sagging economy is prompting vacationers to stay closer to home or to wait longer to book rooms. Advance bookings for September and October, typically challenging months, are nearly 10% off the numbers reported for the same months in 2000.

What’s more, room rates at most properties continue to lag behind last year’s lackluster levels. Some industry experts say hotel revenue this year will be 7% to 10% off 2000 levels.

Though the local tourism industry is recovering faster than most of its Caribbean competitors, mostly due to the government’s prompt and aggressive actions in driving demand after 9/11, it isn't close to achieving the record-setting levels of previous years. That has hoteliers worried about the island’s most profitable period–the winter or high tourism season.

Tourism may not be the greatest contributor to the local gross domestic product, but it is a vital sector of the economy, pumping $2.4 billion in visitor expenditures in 2000 and providing 14,000 direct jobs.

The Tourism Co. didn’t announce the arrival of major hotel chains as part of the new plan–a difficult proposition given the current economic climate in the U.S.–but it did say it’s working arduously to ensure that hotels which had closed but are being renovated open as soon as possible. These include the 255-room Crowne Plaza, the 225-room Carib-Inn (both should be operational in the next 10 months), the 93-room Condado Vanderbilt Hotel, and the 226-room La Concha.

The Tourism Co. expects to add at least 1,800 hotel rooms by the end of 2003, which will boost the island’s room inventory to 15,000. The Calderon administration’s goal is to have at least 17,000 rooms by 2004.

This Caribbean Business article appears courtesy of Casiano Communications.
For further information please contact

Self-Determination Legislation | Puerto Rico Herald Home
Newsstand | Puerto Rico | U.S. Government | Archives
Search | Mailing List | Contact Us | Feedback