Given world tourism trends, Puerto Rico needs to focus on new markets, such as Germany, Japan, China, and the United Kingdom, to find success in a highly competitive sector and lure tourists to its shores, to be able to reduce its reliance on other industries.
Such were some of the conclusions included in this month’s edition of Economic Pulse, a publication released by the H. Calero Consulting firm.
“We face strong competition from our neighbors and we need to focus on price-value added, better air access network, and languages. Boston Consulting Group’s strategy for tourism in Puerto Rico focuses on the traditional traveler as well as on medical tourism; on improving air and maritime access; on expansion of more accommodations; more niche markets on luxury, nature, adventure, gastronomy, and sports tourism,” the report states.
“Success still lies in integrating modern infrastructure with more cultural and recreational options, strategic location as gatekeeper of the Caribbean, and political stability. These strengths need to be presented in a cohesive and systemic plan that challenges competition from our formidable neighbors,” the report further notes.
Despite economic and financial turmoil in different countries, the world still travels. According to the UN World Tourism Organization, tourism worldwide will grow by 5.3 percent in 2014, the biggest increase since 2010.
The total tourist arrivals by region indicate that by 2020, the top three receiving regions will be Europe, East Asia, and the Americas. The Caribbean is expected to receive 25 million arrivals, the study shows.
Considering the Americas in total, the U.S. mainland and Canada captured just over half of all international arrivals in 2012.
“If we look at Latin America in isolation, Mexico dominates. Of 23 countries, Mexico captured 30 percent of all international arrivals (the vast majority from the United States). Brazil, the next most successful country, gets about 7.1 percent,” the study notes. “Last year Brazil, the world’s fifth-biggest country by both area and population, and home to any number of natural wonders and vibrant mega-cities, received 5.7 million tourists. In comparison, Puerto Rico received 4.2 million visitors, of which 3.2 stayed in hotels and other lodgings plus 1 million in cruise ships in 2013.”
Puerto Rico losing ground
Puerto Rico has been losing ground in the Caribbean tourism market in recent years. In 1980, the destination had 19 percent of total arrivals and 26 percent of total tourism income in the Caribbean. By 2012, these shares fell to 13 percent and 15 percent, respectively, the study notes.
In Fiscal 2013, Puerto Rico received 3.2 million tourists, 145,000 or 4.7 percent more arrivals than in Fiscal 2012. Currently, Puerto Rico has 151 lodgings facilities, 86 of which are hotels. This is a reduction from the 169 hotels and lodgings in 2006.
“International competition and the U.S. mainland and Puerto Rican recessions have contributed to the closing of many hotels in the island, particularly in the non-metro area.
At present, the island has 14,252 rooms with an average daily rate of $130 and an occupation rate of 69.8 percent. Most of the arriving tourists come from the U.S., so Puerto Rico’s tourism sector has been affected by stateside economic conditions.
By increasing tourist expenditures in the island from $2.5 billion in 2007 prices to $5.4 billion within the next three years, the island could increase its real GNP growth rate to 5.4 percent; 108,518 direct and indirect jobs plus $2 billion in real payroll, H. Calero Consulting said.
Traveling for health and sun
According to the Economist’s “Traveling for Health” report, the number of U.S. and European patients travelling abroad for medical treatment is likely to rise rapidly over the next few years, by between 15 percent and 25 percent, as cost pressures in developed-countries’ healthcare systems start to bite. Compared with the U.S. mainland, patients can save between 25 percent to 90 percent in medical expenses when seeking treatment elsewhere.
“Top destinations include: Brazil, Costa Rica, India, Korea, Malaysia, Mexico, Singapore, Taiwan, Thailand, Turkey, and the U.S. To reassure foreign patients, many hospitals are seeking accreditation from the Joint Commission International, the international arm of the body that accredits American hospitals,” the report shows.
Drivers of the medical tourism business are: medical expertise, low costs, and a secure environment for both the patients and the private healthcare companies, reputation of excellence, and political and social stability, among others.
“Hence, medical tourism is booming as patients look abroad for cheap, fast treatment, often combined with a holiday afterwards. Why not Puerto Rico?,” the study questions.