By Emma Fawcett, GFDD Fellow and Adjunct Professorial Lecturer at the American University
If the Dominican Republic is to continue as a regional tourism leader, it must face new challenges on the horizon. Moreover, if the country hopes to welcome 10 million tourists by 2022 – or even significantly increase its visitor arrivals – these challenges will become all the more important, as building and managing additional capacity requires careful planning and partnership.
As the Caribbean’s most visited island, the Dominican Republic welcomes more than 5.5 million tourists a year. According to the World Travel and Tourism Council (WTTC), tourism generates 16% of the country’s GDP and produces nearly 15% of its jobs. The sector is a priority for the Dominican government, and President Danilo Medina has set a goal of reaching 10 million tourists by 2022. Tourism has certainly created tremendous opportunities for the Dominican Republic: above-average growth and relative economic stability, an influx of foreign direct investment and technical capacity, employment and opportunities for social mobility, and a global reputation as the island that “has it all.” But to sustain this growth, the country must invest in its education system, diversify its touristic offerings, and improve environmental management.
Human capital weaknesses. As the Dominican tourism sector has expanded, so have the professional capacities of its employees – and the hiring requirements of its companies. Access to quality public education remains a critical challenge in the Dominican Republic; a 2010 survey by UNESCO ranked the quality of primary school education in the Dominican Republic as the worst in Central America and the Caribbean. The sector’s hiring requirements have become increasingly more demanding over the last fifteen years, making it more difficult for those without an eighth-grade education or a high school diploma to enter the sector. Once hired by a hotel, additional training and educational opportunities become available, but the required baseline has risen considerably, presenting a barrier to employment for those from lower socioeconomic groups. Without improved public education, the tourism industry will face a dearth of human capital, and relatively well-paying hospitality jobs will continue to be restricted to a small segment of the Dominican population.
All inclusive model dominates. The tourism sector is highly self-contained, as most visitors stay in all-inclusive resorts with pre-paid packages, and resort developments are concentrated in four key areas – Puerto Plata, La Romana, Santo Domingo, and Punta Cana. Although it generates significant employment and linkages with the agricultural sector, the all-inclusive model still faces a major challenge in dispersing tourist spending. In Punta Cana, tourists spend about $30 per day outside their resort. By contrast, in Cancun, tourists spend $110 per day. In Punta Cana, there are few reasons for tourists to ever leave their resorts – limited offerings of local restaurants, entertainment venues, shopping destinations, and other touristic sites – whereas Cancun has carefully cultivated these offerings. Without a process for building and expanding tourism, Dominican communities will continue to miss out on this important revenue stream. Public-private partnerships are necessary to create the infrastructure for tourists to leave the resorts and explore local towns, thereby spreading tourism dollars further and creating better linkages with the local economy.
Environmental concerns. Particularly on the east coast, environmental concerns include impacts on coral reefs, beaches, and local flora and fauna. Improper zoning of land causes deforestation and erosion which also destroys coral reefs through siltation and desertification. As one industry observer explained to me, “we’re at the point where we’re losing our treasure – the main draw to this area – which is the beach.” Elsewhere in the country, expanding tourism activities threaten the island’s delicate biodiversity. Though the situation is improving, the Dominican government has demonstrated limited capacity in tackling environmental issues. The Ministry of Environment was created in 2000, and prior to that its activities were carried out by the Secretariat for Agriculture. As a young institution, it is effectively playing regulatory “catch-up” – developments that were completed prior to 2000 are undergoing a registration process to ensure that they comply with the regulatory norms for conservation and sustainability established since then.
If the Dominican Republic is to continue as a regional tourism leader, it must face new challenges on the horizon, as tourists tastes shift away from all-inclusive offerings and Cuba provides a new destination for American tourists for the first time in decades. Moreover, if the country hopes to welcome 10 million tourists by 2022 – or even significantly increase its visitor arrivals – these challenges will become all the more important, as building and managing additional capacity requires careful planning and partnership.