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Editorial & Column


Tourism Development Reborn


April 1, 2004
Copyright © 2004 CARIBBEAN BUSINESS. All Rights Reserved.

The past couple of weeks have brought us good news on the tourism-development front.

After years of virtual paralysis, suddenly things have started to happen. Unfortunately, in most cases what we’re talking about is merely the culmination of tourism projects that had been in the pipeline for many years, with no new major hotel projects actually happening.

Two weeks ago, we saw the much-awaited inauguration of Sol Melia’s Paradisus Puerto Rico in Rio Grande. Also last week, the announcement was made that Sheraton, a Starwood Hotels & Resorts brand, had been selected as the top contender to operate the soon-to-be-built Puerto Rico Convention Center District hotel.

This week, we bring you an exclusive inside view of the restoration and expansion of the La Concha and Vanderbilt hotels in the heart of the Condado tourism district.

This year, the Puerto Rico Tourism Co. plans to add 1,514 new rooms to the island’s room inventory, including major projects such as the Condado Lagoon Villas and Costa Bonita in Culebra, as well as a number of projects on a smaller scale. Other projects such as the Fairmont Coco Beach and El Legado Golf Resort are slated to open in 2005 or 2006.

If one goes down the list of hotel projects in the pipeline, one realizes they were all already in different stages of planning or development in 2000, before the previous administration left office.

As we have said several times, the current administration made a big mistake scrapping the attractive package of financial incentives legislated during the previous administration, responsible for the aggressive hotel construction and development that we saw between 1993 and 2000. So much so that the current administration later felt compelled to reinstate some of those incentives. Still, the damage had been done, and investor appetite in hotel development in Puerto Rico was quashed at a time–after 9/11–when it was all the more important to be aggressive.

Besides financial incentives, there’s the question of the terrible bureaucratic foot-dragging in the permitting stage and in delivering on commitments to developers in terms of infrastructure improvements around the properties. Sometimes, government officials will make representations to developers and/or their investors about the level of support that the government is willing to provide for the project to go forward, only to later renege on the promise.

The bottom line is that we must have a strong public policy about the importance of the tourism industry flowing through all echelons of government, from the top down.

For the sake of Puerto Rico’s economic development, it is crucial that such public policy be given continuity. Otherwise, you send a confusing message to the investor community worldwide.

When this administration came into office, it sought to downplay the importance that the previous administration had placed on tourism development. It changed the policy and dragged its feet. Now, almost three-and-a-half years later–in an election year no less–it happily poses for pictures at the ribbon-cutting ceremonies of projects that were started during the previous administration.

Too bad it doesn’t have an equal number of pictures at hotel groundbreaking ceremonies.

This Caribbean Business article appears courtesy of Casiano Communications.
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