Top All-Inclusive Execs Talk What’s Next for Dominican Republic

At this year’s Golden Apple Gala in Chicago, a panel of all-inclusive resort executives shared their thoughts on the recent issues faced by the Dominican Republic, where a series of tourist deaths over the past calendar year have prompted widespread attention in the consumer media. Abel Matutes Prats, CEO, Palladium Hotel Group; Alex Zozaya, executive chairman, Apple Leisure Group; Gonzalo del Peón, president, AMResorts; and Jose Codola, Valentin Hotel Group, participated in the discussion. 

“I think one of the challenges is media tends to generalize some of the news when it’s abroad, and not necessarily make one company or person accountable,” says del Peón. “Americans tend to think, ‘If I leave the country I’m at risk,’ because that’s what the media is saying. I’m not saying this is being manipulated by someone, but it’s consistent with the protectionism and policies followed by this government.”

“It’s so important to put things in context,” says Zozaya. “Mass shootings in the U.S. didn’t stop people from going to New York. Places like Paris and Barcelona are back after the terrorist attacks. I think it is important to put the facts on the table, to create objectivity in the minds of the consumer.”

The coverage has taken a toll on the number of U.S. travelers headed to the Dominican Republic, although other markets have continued to support the destination. 

“The truth is it was very popular in Europe before it opened up to Americans,” says Matutes Prats. 

“There’s many other markets supporting the Dominican Republic in Europe and Latin America,” agrees del Peón. “In Canada we had some issues at the beginning, but the Canadian market is coming back.”

Dealing with the issue has been difficult, executives said, because, while the Dominican Republic government did publish test results showing that tainted alcohol was not involved in the tourist deaths, other elements of the investigation have been ongoing. 

“It’s taken a long time to put together the right reaction,” says del Peón. “I know we need to work together with the government because the target is a country, not just one company.”

“Before we go back and start doing a campaign, we need to turn the page and to turn the page is to tell the truth, with total transparency, about what’s going on,” says Zozaya. 

Both del Peón and Zozaya say that much of the further conversation around the Dominican Republic will hinge on the publication of toxicology reports, which the FBI is currently carrying out in Miami. The reports alone, however, may not be enough to bring the number of U.S. tourists back to what it was, because the negative media coverage has already cast a cloud over the destination. 

“It’s important because we are now in an era where sometimes the media doesn’t take the time to do a background check to see if it’s worth creating this alarm,” says Matutes Prats. “I would ask in the future for the people to be more cautious.” 

Another issue: negative stories tend to dominate the news cycle much more than positive ones. “The news of the toxicology reports being normal, that’s going to be something that’s not going to be in the headlines for a bunch of days,” says Matutes Prats. 

The decline in tourism to the Dominican Republic has been different from similar situations in the past because other destinations in Mexico and the Caribbean don’t seem to have seen an influx of tourists who had planned to go to the Dominican Republic, the panelists agreed. 

“Certainly I think that Mexico has its own headwinds, particularly this year,” Zozaya says, pointing out that Cancun and the Riviera Maya have had a particularly strong sargassum seaweed season this year, and that the end of funding for the national tourism board has also posed challenges. 

Zozaya also pointed to competition from cruise ships, which he described as getting “cheaper and better every year,” as well as Airbnb

“A lot of seats coming to the destination have guests that are going to an Airbnb, so even though the number of arrivals isn’t being impacted that much, they’re capturing a lot of seats,” Zozaya says. 

Looking ahead, Zozaya says that the Dominican Republic is uniquely positioned to rebuild its market share in the U.S., because it is one of the few destinations that has already been approved for customs preclearance, allowing U.S. travelers to clear customs in the Dominican Republic, rather than at a U.S. airport. While the Dominican Republic has not implemented preclearance yet due to internal, political reasons, Zozaya says that the facilities for it are already in place.

“That allows huge opportunities for companies to connect to cities [in the U.S.] without customs or immigration services – that’s a huge competitive advantage,” Zozaya says. 

Zozaya also says that growing charter business will be helpful in rebuilding the Dominican Republic’s tourism, both for the all-inclusive resort companies and for travel agents. 

“It’s a product they can sell as a package,” says Zozaya. “They can add value when promoting [charter packages], and they can make more commissions.”

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