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Growth in the Dominican Republic

The Dominican Republic, a Caribbean nation of 10.77 million people, shares the island of Hispaniola with Haiti and is primarily known for its beautiful beaches and resorts. With a 13.5 percent youth unemployment rate in the country, these resorts provide necessary jobs, economic stimulation and growth in the Dominican Republic. Despite the recent negative media attention, the growth of resorts shows no sign of stopping. Four new resorts opening in late 2019 and 2020 will continue adding to the burgeoning tourist industry, increasing numbers of workers in the service sector and establish mutually beneficial U.S. and Dominican exchanges.

The Pillar of Tourism

According to the Canadian Trade Commissioner Service, the tourism industry is one of the “four pillars” of the Dominican economy. It forms 7.9 percent of the economy. Growth in the Dominican Republic focuses on projects encouraging tourists to spend more money. There are already 65 such projects approved by the Dominican Republic Ministry of Tourism for 2019.

Speedy development will continue the trend of success in the tourism sector. The Dominican Republic Association for Hotels and Tourism statistics for 2018 displayed a 6.2 percent increase in the sector, which now makes up 20 percent of Caribbean trips. There was also a six percent increase in hotel rooms, and people filled 77 percent of total rooms. Overall, the industry reaped immense revenues of $7.2 billion in 2017. Tourism’s success contributes to GDP growth. The University of Denver predicts $89.54 billion in 2019, and GDP rising to $161.4 billion by 2030.

More Rooms, More Jobs

New resorts will extend the tourism industry’s prosperity by increasing the amount of occupied rooms and the jobs required to service visitors. The World Bank reported that the Dominican labor force was 4,952,136 workers in 2018, up from 3,911,218 only eight years before. Service sector workers made up 61.4 percent in 2017, illustrating the prominent role tourism and related industries play for the growth of the Dominican Republic. Here are four vacation spots heating up employment progress in late 2019 and 2020:

Grand Fiesta Americana Punta Cana Los Corales: This resort, owned by the Mexican Company Posadas, will have 558 rooms and various amenities necessitating more staff. The Director-General of Posadas, José Carlos Azcárraga, expressed hopes that the new resort will aid one of the fastest-growing Caribbean economies. The Dominican president visited the cornerstone to show his support. The resort opens in late 2019.

Hyatt Ziva Cap Cana: This American-owned Playa Hotels and Resorts brand also had a groundbreaking ceremony attended by the Dominican president. There will be 750 rooms requiring staff attention, alongside the various dining and fitness services provided. It opens in November 2019.

Club Med Michès Playa Esmeralda: This newest edition to Club Med’s resort collection will be an eco-friendly environment with four separate “villages” for new employees to manage. In an email to The Borgen Project, Club Med stated it will hire more than 440 Dominicans and help lead vocational training for approximately 1,000 locals to extend the resort’s positive impact. It opens in November 2019.

Dreams Resorts and Spas in El Macao: AMResorts, a subsidiary of the American-owned Apple Leisure Group, will have 500 rooms for the staff to manage. Bars, pools and a litany of eateries will require service sector employees as well. It opens in 2020.

A Vacation for Two

The development of new resorts is mutually beneficial for both the U.S. and the Dominican Republic. The island nation’s tourism is highly dependent on American visitors, who formed 33.85 percent of guests in 2013. The Dominican Embassy reported that individual tourists spent $1,055 on average in the same year. Americans received a pleasant vacation in exchange for growth in the Dominican Republic.

Two of the above resorts are branded by American companies as well. Their earnings not only benefit the Dominican economy but also benefit the American economy. Resort companies are part of a larger exchange where 53 percent of 2017 Dominican trade was with the U.S.. The Canadian Trade Commissioner Service found that the Dominican Republic imported 42 percent of its goods from the U.S. in the same year.

Unfortunately, the four new resorts will not solve all of the Dominican Republic’s problems. Poverty remains high at 30.5 percent, although it has dropped from 41.2 percent in 2013. However, new resorts contribute to this decrease by providing employment opportunities in one of the nation’s most lucrative sectors.

– Sean Galli
Photo: Flickr

Tourism Alleviates Poverty
Tourism is one of the fastest growing economic sectors; in fact, the number of international travelers hit 1 billion in 2012. That same year, tourism accounted for 9 percent of global GDP and 5 percent of global exports. This rapid growth has raised the question of how and whether tourism alleviates poverty. Salli Felton, the acting chief executive of the Travel Foundation, stated that tourism is “the largest transfer of resources from rich to poor.”  It may be the largest, but is it the best?

Tourism, The Industry

Tourism as a method of economic growth and poverty alleviation has advantages and disadvantages. In the most direct way, tourism can help to create jobs for low skilled workers. The tourism sector was responsible for over 260 million jobs worldwide in 2010—about 1 in 11.

These jobs in the tourism industry also help reboot other sectors of the economy, in turn creating indirect employment: 1 job in the tourism field generates roughly 1.5 additional jobs in other related areas such as construction, utilities, textile, transport and agriculture. The vast array of goods and services that tourism requires — infrastructure, roads, power, water, airports, hotels and resorts, restaurants, entertainment — leads to a more dynamic and wider economy at large.

Tourism’s great appeal for developing countries lies in its accessibility for communities often detached from other means of economic development i.e. island nations and rural areas. In fact, tourism is one of the 5 largest sources of exports for 69 developing countries, and the largest source for 28.

Tourism’s Attraction and Reliability

Many island areas hold draw for tourist activity—beautiful beaches, warm weather, and rich culture—but lack the connectivity to grow in other ways. On some island states, tourism is responsible for nearly 25 percent of the nation’s GDP. However, if not introduced in a sustainable way, it is not the case that tourism alleviates poverty or even helps to develop a country’s economy.

Often, tourism is not a reliable source of revenue as it is extremely sensitive to environmental and political fluctuations. Tourist towns are also susceptible to seasonal demand, making consistency difficult to achieve.

Many instances of tourist expansion come at the expense of local populations and can lead to exploitation. For instance, competition over resources between locals and tourist may ensue, as well as ecological degradation and loss of cultural tradition or heritage. In some cases, developing countries turn towards importing food, equipment, labor and other goods to meet the expectations of vacationers; as a consequence, these actions redirect revenues away from the local community.

Making Tourism Sustainable

In order to combat the negative effects of tourism, growth must be sustainable—that is, activities must be beneficial to the people of the host country. Sustainable practice can be ensured on a number of levels.

Governments can become involved in regulating environmental impacts and incentivize locally-sourced resources and labor. Large resorts can also partner with local communities. For instance, the Ritz Carlton hooked up with nearby organizations on children’s issues, hunger and poverty across their numerous locations.

Finally, tourists themselves can research which hotels or resorts are affiliated with sustainable certification programs and/or have local residents as staff. Tourists can also get outside of hotel and resort walls to use their purchasing power to help the economy by eating local, shopping local and using local guides.

If implemented in a sustainable manner, tourism alleviates poverty and lessens hardships associated with poverty related issues. However, due to the inconsistent nature of activity, tourism is not a catch-all response to poverty eradication, but rather a step in the right direction.

– Jessie Serody
Photo: Flickr