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Dominican Republic SERVICES
Tourism
The Dominican tourist industry grew tremendously during
the
1970s and the 1980s, and by 1989 it boasted more than
18,000
hotel rooms--more than any other location in the
Caribbean.
Foreign-exchange earnings from tourism also multiplied
dramatically, during the 1980s, from US$100 million in
1980 to
US$570 million by 1987, or the equivalent of 80 percent of
all
merchandise exports. In 1984 tourism replaced sugar as the
country's leading foreign-exchange earner, exemplifying
the
growing diversity of the Dominican economy. The number of
tourists visiting the island increased from 278,000 in
1975 to
792,000 in 1985, and in 1987 the number of vacationers
surpassed
1 million for the first time. This total surpassed those
of
traditional resort locations like Bermuda and Barbados,
and it
made the Dominican Republic the fifth largest earner of
tourism
dollars in the Caribbean, behind the Bahamas, Puerto Rico,
Jamaica, and the United States Virgin Islands.
Government promotion of tourism did not begin in
earnest
until the passage in 1971 of the Tourist Incentive Law
(Law 153).
Law 153 created certain "tourist poles" to promote the
industry's
growth, and, more important, it provided investors in
tourism a
ten-year tax holiday and an exemption from tariffs on
imports not
available locally. The law also created a special arm of
the
central bank to co-finance new investments in the sector.
In 1979
the administration of Silvestre Antonio Guzmán Fernández
(1978-
82) elevated the director of the country's tourism
development
efforts to cabinet level, a further indication of official
interest and commitment.
The Dominican Republic offered a number of attractions
to
tourists, not least among them, its bargain rates and
liberal
divorce laws. As a consequence of numerous devaluations of
the
peso in the 1980s, the country was the least expensive
Caribbean
resort. The republic also benefited from a general upswing
in
Caribbean tourism, in the 1980s, associated with the
strong
United States economy. Each year during the decade, the
United
States accounted for more than fifty percent of the
visitors to
the Dominican Republic. Other vacationers came mainly from
Canada, Italy, Spain, West Germany, and the Scandinavian
countries. As the island offered more "all-inclusive"
package
vacations to visitors, the average tourist expenditure and
length
of stay also increased, indicating the gradual maturation
of the
trade. Levels of hotel occupancy generally were very high,
between 80 percent and 90 percent. Traditionally, the most
popular resorts had been in La Romana, Puerto Plata, and
Santo
Domingo, but new beach hotels in the southwest, the east,
and the
north all promised to be major attractions in the future.
Despite its successes, the tourist industry was still
relatively young, and it faced a series of problems
related to
its rapid growth. For example, inadequate supplies of
clean water
and electricity, combined with slow construction caused by
shortages of materials, forced some vacationers to leave
early
because of unsuitable accommodations. Although workers
were drawn
by tourism's higher wages and the access that it provided
to
foreign currencies, the rapid development of the industry
ensured
that qualified labor continued to be in short supply.
Tellingly,
the industry's return rate for visitors was low, by
Caribbean
standards.
Data as of December 1989
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