Puerto Rico must ‘unleash tourism potential’ to compete

Written by  //  December 10, 2013  //  Economy, Tourism/Transportation  //  3 Comments

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tourism graphicGiven 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.”

tourism graphic 2Puerto 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.

3 Comments on "Puerto Rico must ‘unleash tourism potential’ to compete"

  1. Hmmm... December 10, 2013 at 8:21 AM · Reply

    Love the writer’s use of of the word ‘unleash’!!!
    How about a roadmap…:
    1. PRTC stability needed. Agency leadership and strategy should not change as often as it has. Gov’t must make a true long commitment or get out of the process.
    2. Fix Crime…period. Allow the new P.R. Chief of Police bring in the tough, and often criticized, policies and tactics that cleaned up New York City. History shows results…keep politics out of it.
    3. PRTC needs desperate public relations and marketing help. Hire TOP and PROVEN localized agencies within the the markets they need to target. The ‘local’ strategy hasn’t worked. Must contract specific country experts.
    4. What is the Cruise Industry strategy??? Growing arrival numbers, but minimal passenger spending once in port. Discourage immediate cash economy in proximity areas of ships, encourage longer lengths of stay.
    5. Highlighting luxury resorts with pictures on the internet is not a luxury strategy. Private sector and PRHTA rely too heavily on PRTC to drive this. Also, luxury spending is not only a resort or hotel night stay. Golf, shopping, and dining need to scream LOUDER!
    6. Time for big time attractions…and incentives! Disney, Universal, SeaWorld, Legoland, Busch Gardens… Tourists are flocking to Florida and this trend won’t stop. Puerto Rico, look to the East and incentivize other parks and attractions companies for expansion into the island. Why not?!!!?
    7. Medical tourism…key is reputation. P.R. needs to build one, or at minimum, build perception of it…but in years, no one or entity has stepped up to create and maintain.
    …really, is any of this not achievable?

  2. Jose Tony Rodriguez December 24, 2013 at 7:32 PM · Reply

    Puerto Rico needs to revive the Teodoro Moscoso spirit that permeated the island during the Commonwealth’s golden era and think BIG and Bold.

  3. FishyLuv January 15, 2014 at 9:48 AM · Reply

    If tourism is to grow, Puerto Rico needs to let the little guy try new things. The rules are too rigid, the government offices too many, the permits endless and always delayed. In 2011 to 2012 my wife and I worked diligently to open a little tour company to offer off-the-beaten track tours to small groups of 1 or 2 people. The concept was more like a group of friends on a road trip rather than a formal tour. Nowadays there is a whole market of younger people who do not care for resorts or tourist traps, and also do not have driver’s licenses so they can’t rent a car. When we put up our website, our phone started ringing the first week. I don’t want to go into all the nightmares and reasons (we all know what the government is like) but the permits never came. We never opened. The silly rules from the Compañia de Turísmo (no doubt egged on by taxi unions) made our concept not just unviable, but unjustifiably illegal. We gave up in 2013 and are now looking to leave Puerto Rico permanently. Sad.

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