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Tourism Co. Positive On Local Tourism Industry

Recent Harris Poll On Travel Makes Some Nervous


May 29, 2003
Copyright © 2003 CARIBBEAN BUSINESS. All Rights Reserved.

While some Caribbean islands reported soft hotel occupancy rates in the peak winter season because of the weak economy and the war in Iraq, Puerto Rico had a solid average rate of 78.2%. One way to measure tourism industry productivity is by calculating the room-tax revenue. The government-imposed tax rate is 9% for hotels with no casinos and 11% for those with casinos.

According to the Tourism Co., room-tax revenue collected during the first 10 months of fiscal year (FY) 2003, from July 2002 through April 2003, was 7% higher at $36 million than the $33.5 million collected during the same period in FY 2002.

The higher amount includes the estimated $2.4 million local hotels have saved since the government introduced legislation after 9/11 to allow them to keep 50% of the room-tax revenue to prevent layoffs or reduce operational costs.

"We have had a successful tourism season with excellent hotel occupancy levels," said Jose Suarez, executive director of the Tourism Co. Suarez believes the high occupancy rates and the increase in room-tax revenue were mainly due to the measures implemented by the government to weather these difficult economic times. Another factor causing room-tax revenue to rise was a Tourism Co. audit of the island’s hotels to verify that the revenue reported to the Treasury Department agreed with what had been reported to Tourism.

Occupancy rates at local hotels were fairly steady throughout the peak season, which runs from Dec. 15 through April 15. However, the rates have dropped in May, traditionally a slow month for Puerto Rico’s tourism industry. Even though occupancy has been stable overall, some room rates still haven’t returned to 2000 levels.

Meanwhile, travel and tourism officials in a number of Caribbean destinations are more than a little nervous about the findings of the most recent Harris poll on attitudes of U.S. travelers.

Conducted in April, the survey questioned 2,179 adults in the U.S. and found that many Americans are restricting their vacation and travel plans because of "increased travel risks." Citing "a growing fear of terrorism, SARS, and the war in Iraq," the study said they have taken "a heavy toll on the airline, hotel, tourism, and travel industries."

"Almost everyone thinks that the risks to American tourists traveling outside the U.S. are worse today than they were three years ago (before 9/11)--and over a quarter (26%) of Americans think they are much worse."

The bad news for the travel industry in the survey’s findings is that "millions of Americans have decided not to travel to Europe and other foreign destinations, to fly less, to spend less time away from home, and in some cases, not to travel at all."

Aside from mentioning Europe collectively, the survey doesn’t cite specific destinations. But the overall results have tourism officials in a number of Caribbean destinations feeling uneasy. Most of them cite their proximity to the U.S. as reassuring to the U.S. traveling public. This has strengthened travel to Puerto Rico, the U.S. Virgin Islands, and somewhat to a number of other destinations, but overall business is viewed as weak, with advance bookings relatively last-minute for shortened visits and price-sensitive.

Other findings that make the industry in the region nervous are that 20% have decided not to travel to other parts of the world, apart from Europe; 16% have decided to vacation in the U.S.; 12% have decided to fly less in the U.S.; 10% have decided to spend less time away from home; 6% have decided to choose a different vacation destination, and 7% have decided not to travel at all.

This Caribbean Business article appears courtesy of Casiano Communications.
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