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Puerto Rico’s Tourism Industry On A Roll In 2005

Island advancing to become a major convention destination


January 27, 2005
Copyright © 2005 CARIBBEAN BUSINESS. All Rights Reserved.

January’s frequent rain can’t dampen the sunny optimism of Puerto Rico’s tourism executives for their industry in 2005.

There are plenty of reasons for that rosy outlook. The island’s lodging portfolio continues to expand and diversify, thus providing more choices for visitors; winter occupancy levels are running high; hotel rates are up; and bookings for the year are coming in ahead of time.

"If you have a good winter season, then you know it’s going to be a successful year," said Willie Chin, sales & marketing director for InterContinental San Juan Resort & Casino in Isla Verde. The hotel’s occupancy rate should range between the mid-80s and the low 90s during the first quarter, on par with last year, according to Chin.

For sure, there are challenges ahead. For example, some industry members urged the new Acevedo Vilá administration to ensure the continuity of the island’s tourism promotional efforts and tend to Puerto Rico’s serious infrastructure problems, such as power and water. Training and quality of service are two areas that require further strengthening if the island is to continue attracting visitors despite higher room rates, one executive said.

"This is a very exciting year for tourism because there are so many opportunities opening up with new properties, and the convention center," said a buoyant Erin Benítez, executive vice president of the Puerto Rico Hotel & Tourism Association.

Indeed, the addition this year of more than 400 rooms to the island’s inventory of 13,326 bodes well for Puerto Rico’s goal to become a major meeting and convention destination. Among the properties scheduled to open this year are Paseo del Caribe, which will add 168 lagoon villas to the Caribe Hilton; Sheraton 4 Points Candelario in Humacao; and the Condado Beach Duo, the long-awaited development by International Hospitality Enterprises, headed by veteran hotelier Hugh Andrews.

Central to that goal is the $415 million convention center, the largest meeting facility in the Caribbean, now under construction in Isla Grande. The first phase of the project is scheduled to open in September, and already the Puerto Rico Convention Bureau has secured large bookings for early 2006: the 1,500-member Latin American Studies Association and Interfex, an exhibition group comprising 2,000 members. Teresa Martínez, the bureau’s communications director, said the center will enable Puerto Rico to attract groups in excess of 5,000 people, such as the 6,000-member U.S. Hispanic Chamber of Commerce, which has booked space for 2007.

This winter is proving a busy one for hotels, both large and small. Executives report high occupancy levels, and room-rate increases ranging from 5% to 15%.

"We’re fully booked now," said Derick Grundyson, general manager of the cozy 14-room Numero 1 Guesthouse in Ocean Park, adding this should hold for the year, with the exception of September and October when occupancy tends to drop a little. The three El Canario hostelries in Condado, totaling 95 rooms, are doing better this winter than in the past two years, according to owner Keith Olson. He said the occupancy level is in the upper 70s, "almost back to what we were before 9/11," he added.

The Caribe Hilton, San Juan’s largest hotel, is forecasting an average occupancy rate of 92% for the first quarter, about on par with last year, according to Stephen Nass, director of sales & marketing, revenue & business development. However, with higher room rates, up 5% over 2004, the hotel expects better revenue in the second quarter. Hilton’s $1 million-plus capital-improvement plan for 2005 includes the completion of its tower building renovation. Nass said 100 rooms will be closed this summer so they can be renovated in time for the next winter season.

Even better, bookings for the winter and other months of the year are coming in ahead of time, an unexpected twist that has more than one executive pleasantly puzzled.

"It seems people are making reservations well ahead of time," noted InterContinental’s Chin, adding he couldn’t say what is behind the trend that runs counter to the prevailing tendency of travelers worldwide to leave their travel plans until the last minute. Erin Benítez ventured that the low value of the dollar vis-à-vis the strong euro is bringing more U.S. travelers to look toward tourist destinations where they can stretch their money. Puerto Rico’s main source of tourism hails from the U.S. mainland. According to Tourism Co. figures, 87.6% of hotel registrations in fiscal 2004 were U.S. travelers.

This Caribbean Business article appears courtesy of Casiano Communications.
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