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Outlook For Tourism In Puerto Rico Upbeat
While recovery is expected to continue in 2005, major problems affecting industry are infrastructure strain and policy continuity
By JOHN COLLINS
July 8, 2004
The outlook for Puerto Ricos hotel industry for the rest of this year is upbeat while its members continue to be concerned about a number of problems. These include major infrastructure strain; government relations in general; and the chronic, limited supply of trained personnel, according to Alain Tiphaine, president of the Puerto Rico Hotel & Tourism Association (PRHTA).
"Our members are experiencing continued momentum this year, they expect continued recovery in 2005, and hope to be back to normal in 2006," said Tiphaine, adding, cautiously, "It is very difficult to get into a promotional mode when you are still recovering." The total number of rooms in PRHTA properties is 12,338, which represents the overwhelming majority on the island, although there are a few hotels that arent members.
"This year has been one of continued recovery," he said.
"More rooms are coming on line this year and it will be the same next year as well. Its going to take time for us to get the numbers back up again. Of course, a major or qualifier is whether we have a major economic downturn caused by another terrorist attack."
While advance bookings are upthey are stronger in the local market and from the mainland U.S.Tiphaine indicated that the industry continues to be challenged by a number of problems.
"Our biggest problem is basic infrastructure strain and that covers the gamut," he said. "Electricity, water, telephone service, you name it, we have continuous basic problems with all of them. They are problems for us but ultimately for our guests [too].
Another problem for PRHTA members is the limited labor pool. "We have a limited supply of trained personnel," said Tiphaine. "We dont have people lining up for jobs."
Government relations a problem
Government relations continue to be a problem that concerns PRHTA members. "A major complaint of our members is the role of the Legislature in enacting bills as they like with little or no input from the industry," said Tiphaine. Cited as examples were recent bills to increase taxes on loans as well as on slot-machine earnings. "We strongly feel that the government shouldnt look to the tourism industry when it wants added sources of revenue. When we get these added burdens, it just increases our operating costs and ends up being passed on to our guests, making us less competitive," he said.
An area that is causing concern to PRHTA members is the fragility of the cruise industry in Puerto Rico. "This is a good market but its very temperamental," he said. "Its very price-sensitive and there is a feeling in the industry that raising taxes creates anxiety in the cruise trade, and there are other destinations that are ready to grab business away from us. Even though it was later explained that increases in certain incentives would somewhat compensate for them, if people here didnt understand the explanations, its hard to imagine that cruise-line executives elsewhere did."
One tourism proposal that originated in the Legislature and which Tiphaine definitely doesnt favor is the so-called dual-destination concept. Intended to foster hotels in Puerto Rico, particularly in the west, it would tap into the large numbers of European visitors to the neighboring Dominican Republic (D.R.). "When the idea came up, I thought then and continue to believe that it is unworkable," he said.
"It is naive to think that D.R. hoteliers could or would share people buying packages in Europe with hotels in Puerto Rico," said Tiphaine. "The European packages are very economical because they are based on charter flights and the lower all-inclusive rates in the D.R. Trying to add Puerto Rico to the mix is impractical and unrealistic."
What is a major concern of PRHTA members in an election year? You guessed ita change in government. "We will always experience a slight decrease in business, especially among corporate travelers and local tourists, but it generally bounces back again," he said. "A far more serious problem for our industry is the complete lack of institutional memory in government tourism policy."
"There is absolutely no continuity in tourism promotion," he said "It seems like every new governor wants to shake up the Tourism Co. and put their own spin on Puerto Ricos tourism image. But this sends confusing signals to the tour operators and the travel agents and they, in turn, are the people selling us abroad."
This Caribbean Business article appears courtesy of Casiano Communications.