Tourism in the Dominican Republic - a legal guide - Pellerano ...

At the end of the sixties, the drop in international
prices of these products led the Dominican Republic,
like many other developing countries, to look for
alternative sources of income. That is why the
Dominican State decided to promote non-traditional
sectors such as tourism by granting incentives and
carrying out promotional activities.
In this context, in the year 1968 the Government
declared of national interest the development of
tourism. At the beginning largely characterized by
Government initiatives, the tourist sector started
gradually to see more private sector participation,
especially since the eighties, when international sources
of financing became available under schemes such as
the Lome Convention (today Cotonou Agreement).
During the last twenty years, the tourist industry
has developed at a great pace, increasing the
accommodation capacity from 3,800 rooms in 1980 to
24,400 in 1992 and almost 54,000 in 2002.
100
80
60
40
20
0
Source: See Appendix 1
Hotel Occupation Rate
2000-2003 (%)
2000 2001 2002 2003
Annual
Rate
January
Rate
Today tourism is one of the milestones of the
Dominican economy, contributing widely to the creation
of jobs and the generation of income. In the year 2000,
the sector experienced a growth of 15.7%, a significant
increase in the hotel room offer, a hotel occupation rate
of 70.2% and an average net profit of 15.5% of
earnings. Another indicator of the expansion of the
tourist sector is the growth in the collection of taxes
related to tourism, such as the tax on hotel rooms
(16.4%), tourist cards (16.6%) and ITBIS (1.2%).
PELLERANO & HERRERA
ATTORNEYS AT LAW
In the years 2001 and 2002, the adverse
international context did not allow to repeat the growth
level showed in the previous years. However, the
special measures adopted by the Government to face
this situation have enabled the sector to start
recovering. Furthermore, public authorities have been
working actively with the private sector in order to face
the negative effects that the Iraq conflict may have on
the sector.
Economic performance during the period 2001-
2002
In the year 2001, for the first time in the last two
decades, tourism experienced a reduction amounting to
-4.4%, caused by external factors such as the
deceleration of the world economy, euro depreciation
and the events of 11 September. This influenced
considerably the number of tourist arrivals, which
dropped by -6.8%.
The hotel occupation rate was reduced by 3.9%,
going from 70.2% in 2000 to 66.3% in 2001, while the
growth rate of hotel rooms went down from 4.6% in
2000 to 3.9%. Tourism earnings showed a similar
performance than the activity as a whole, experiencing
a reduction of -6.0%, thus changing the trend of the
last ten years.
During the period January-September 2002, the
sector experienced a -5.7% decrease, caused by a -
7.0% reduction in hotels and a -4.2% decrease in
restaurants. Furthermore, the hotel occupation rate
went down by -6.2%.
It should be noted however that tourist activity
showed a clear tendency to recover, since it registered
rates of -11.2% in January-March, -4.8% in April-June
and a slight positive rate of 0.2% in July-September
2002.
Preliminary figures indicate that the strategic efforts
undertaken by the public and private sector to promote
the country in foreign markets enabled the sector to
start improving the levels of tourist arrivals in the
month of September 2002. Furthermore, during the last
two months of the year occupation rates were higher
than those of the previous year, while tourist arrivals
grew more than 30.0%. In addition, in January 2003
tourist arrivals grew by 35.9% when compared to
January of the previous year.
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