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Local Tourism Industry Had Its Ups And Downs In 2003

New-hotel construction stalled, but properties invested in renovations and expansions, saw occupancy gains


December 25, 2003
Copyright © 2003 CARIBBEAN BUSINESS. All Rights Reserved.

Contrary to Puerto Rico Tourism Co. Executive Director Jose Suarez’s forecast, the upsurge in hotel development didn’t happen in 2003. CARIBBEAN BUSINESS reported earlier in the year (CB Feb. 6) that there were major delays in the 24 hotels under construction, which would have added 2,425 rooms to the island’s inventory of approximately 12,000. Official numbers from the Tourism Co. indicate that there were 12,325 agency-endorsed rooms as of Nov. 30.

"By the end of 2003, we should have added at least 2,000 new rooms," Suarez told CARIBBEAN BUSINESS (CB May 15.) Seven properties should have opened: LMM International Airport Hotel in Carolina, Paradisus Puerto Rico in Rio Grande, Promenada Plaza and Vendign 2 in San Juan, Costa Bonita in Culebra, Caguas Hampton Inn in Caguas, and Hacienda Santa Isabel in Santa Isabel. They didn’t.

In 2004, the Tourism Co. expects to add 1,000 rooms from the opening of the Condado Vanderbilt and La Concha hotels and from expansions of the Ponce Hilton and smaller hotels.

Not all news was bad in the hotel industry. Occupancy rates at local hotels held fairly steady throughout the previous peak season (Dec. 15, 2002 through April 15, 2003). Occupancy in May rose slightly to an average of 72%. For the first quarter of fiscal year 2004 (July through September), it was 77.4%, a 5.2% increase compared with the year-ago quarter. October and November saw occupancy rise 3.9% and 2.8% respectively, over 2002.

Industry experts forecast blue skies for Puerto Rico tourism this peak season, continuing the pickup registered over the summer (CB Oct. 2.) Major U.S. airlines are increasing service to the Caribbean for winter, and intra-Caribbean airlines are changing their schedules to facilitate connections between various gateways.


This year saw numerous renovation projects at local properties and golf courses. The Radisson Ambassador Plaza announced a $1.6 million investment to remodel its 146 rooms. Empresas Santana invested $6 million to remodel the Candelero Hotel at Palmas del Mar, which it acquired earlier in 2003.

Palmas del Mar Properties invested approximately $2.5 million to refurbish the Humacao resort’s two 18-hole golf courses, and the Westin Rio Mar Beach Resort & Country Club is in the final planning stage of investing $6 million in the Rio Grande property. The Embassy Suites San Juan Hotel & Casino and San Juan Marriott Resort & Stellaris Casino reported $1.1 million and $2 million investments, respectively, to renovate their casinos. The Economic Development Bank granted a $2.3 million loan to Parador Posada Porlamar in Lajas to expand and upgrade.

The Ports Authority is investing $38 million to reconstruct Terminal A at Luis Muñoz Marin (LMM) International Airport so it can serve cruise ship passengers and business groups, who travel with a many pieces of luggage and require bus transportation.

Coming & going

The industry had a shock when the Hyatt Regency Cerromar Beach Resort & Casino in Dorado closed in July. Hyatt decided to close the hotel because of the generally poor business climate and the proliferation of newer, more- modern competitors.

This was an active year in hotel management. Wyndham International was chosen to operate Martineau Bay Resort in Vieques, while RECP San Juan Investors LLC, the new owner of The Ritz-Carlton San Juan Hotel Spa & Casino in Isla Verde, signed a 50-year operating agreement with Ritz-Carlton.

InterContinental pulled out the last of its employees at the Cayo Largo Resort in Fajardo, even though it has a management contract with property owner Cayo Largo Hotel. The Government Development Bank assumed Cayo Largo’s first mortgage and intends to foreclose on the property.

Flagship Services and its president and veteran hotelier, Rick Newman, kept busy in 2003, acquiring the Carib-Inn hotel in Isla Verde. The property will be converted into a full-service Holiday Inn, expected to open in June 2004. The company was chosen to manage the Caparra Country Club in Guaynabo and holds the management contract for the Rincon Beach Resort in Añasco and the LMM International Airport Hotel.

Focus on internal tourism, education

Promoting the island to local tourists was a top priority for the Tourism Co. To celebrate the 30th anniversary of its paradors program, the agency launched a $500,000 promotional campaign aimed at generating visitor traffic to paradors on weekdays. Another initiative involved marketing the west coast (from Isabela to Guanica) as Porta del Sol.

The hospitality and tourism industry set out to improve employees’ education in such areas as hotel management, food & beverage management, and event & convention planning. A particular goal was improving employees’ basic English-language skills.

Early in 2003, the Ana G. Mendez University System inaugurated the Universidad del Este’s International School of Tourism & Hospitality Management at a cost of about $7 million. The tourism school, which has four kitchens, a restaurant, a bartending laboratory, and eight classrooms with Internet access, has approximately 700 students.

There was also increased demand for culinary training as a result of growth in the $1.5 billion restaurant industry, more interest in entrepreneurship, and greater awareness that kitchen work can actually be the springboard to a high-paying career. The largest school on the island is the Caribbean Culinary Institute, with 2,000 students on six campuses.

This Caribbean Business article appears courtesy of Casiano Communications.
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