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P.R. Tourism Faces Up To 2004 Challenges
Priorities include drawing back groups, attracting more foreign airlines, and meeting growing competition for cruise ships
By LORRAINE BLASOR
January 22, 2004
Puerto Ricos tourism industry faces numerous challenges in 2004: bringing back to the island the group business that helps fill hotels, standing up to increased competition for cruise passengers from new destinations, and bridging the divide between Europe and Puerto Rico by attracting more international air carriers.
True to the sunny nature of their sector, based on giving people an enjoyable break from their daily routine, local industry executives are confident 2004 will be a good year. "The first quarter looks positive," said Jose Campos, general manager of the Caribe Hilton, which this year will invest $4 million in major improvements, including the second phase of the refurbishing of 120 rooms in its adjoining 216-room tower. The first phase began in 2003.
Over at the Wyndham Old San Hotel & Casino, general manager Helen P. Bayne expects a good year since January got off to a promising start: The occupancy rate for the month should reach the high 70s, she said. The Wyndham is on the sale block and a purchase is imminent, Bayne said, though she declined to give details.
With nearly 50 new tourism projects in the pipeline, either at the preliminary planning stage or close to beginning construction, and many others on the verge of materializing, the Tourism Co. has its work cut out for it: ensure these ventures reach a successful completion, as they will boost the islands current inventory of 12,325 rooms, a necessary component to developing the convention market once the convention center in Isla Grande kicks into action in 2005. Construction of the center is reportedly proceeding at full speed.
Among the projects slated to open in the next few months are Sol Melias 490-room Paradisus Puerto Rico and the 125-room Caguas Hampton Inn Hotel. The 686-room Condado Trio project has a November opening date, but construction work is still at a preliminary phase.
The Tourism Co. has budgeted $28 million this fiscal year (up $2 million over last year) to market the island, especially in secondary markets such as Boston, Los Angeles, Chicago and Dallas, without forgetting the Northeast, Puerto Ricos primary source of tourists, said Executive Director Jose Suarez. The thrust will combine direct marketing, promotions, and press, and television ads.
Suarez said the leisure market is strong, but group business, hurt by the downward economy, which forced businesses to cut back on their spending, continues to lag behind. However, he expects groups to return as the economy shapes up.
Thanks to large groups in July, August, and December 2003, including a really big crew of Longshoremen Association members, the Caribe Hilton saw its occupancy for the year rise to 83%, several points above 2002, according to Campos. He added that the hotel is constantly looking for this business, which moves around a lot geographically. "They make a very big difference," he said. Hiltons occupancy for 2004 should be 80%.
Suarez anticipated higher hotel rates this year if demand for Puerto Rico as a tourist destination keeps getting stronger. "Higher rates mean higher profits," said Suarez.
Hotel occupancy levels in 2003 rose 3% over the previous year, and Suarez anticipates a moderate increase over 2004.
The island is keeping an eye on other destinations vying for the cruise ship market. "We will do everything possible to maintain our share," said Suarez. He noted, however, a troubling new trend: homeland cruising, whereby passengers pick up a ship at one of many eastern and southeastern U.S. mainland ports to travel to the northern Caribbean. These make fewer stops than if passengers were to take off on their cruise from a Caribbean destination, he said.
Suarez said Puerto Rico was successful in 2003 in maintaining and even increasing the number of flights between Puerto Rico and the mainland and the Caribbean. This year, he said, he is targeting international carriers to bridge the divide between Europe and Puerto Rico, also taking into account the fact that a strong euro vis-à-vis the dollar should make traveling to this region more attractive to Europeans.
Myrna Hau, outgoing president of the Paradors Association, said many of the islands small inns are looking to emulate a strategy gaining ground in the Caribbean that involves joint-destination packages so as to reach more European travelers.
This Caribbean Business article appears courtesy of Casiano Communications.