Punta Cana, Bavaro Beach strip continues to grow|
Some areas have orderly growth while others are experiencing
serious infrastructure strain due to lack of adequate planning
By JOHN COLLINS
PUNTA CANA, Dominican Republic – The resort properties along the fabulous Punta Cana-Bavaro Beach stretch the Dominican Republic’s northeast coast presently have a total of 18,000 rooms with that figure expected to grow to 25,000 rooms by 2005, said Frank Rainieri, president and chief executive officer of Punta Cana Resort & Club.
Rainieri, the pioneer developer of the region, started it all in 1970 when he got support for his vision of his Punta Cana Beach Resort from a group of Dominican and U.S. investors and into which he invested $1.5 million. He is the grandson of an Italian immigrant to the D.R. who arrived in Puerto Plata in 1898 to open his first hotel there.
Wise investment and good management resulted in the Rainieri group amassing 15,000 acres in what was then the undeveloped Punta Cana region. “I was and continue to be committed to sustainable development,” he said during a recent interview. “We decided early on that no building in the development would be over four stories high and that there would be no more than 15 rooms per acre. That is why today our original resort has 300 rooms in 20 acres. It is a totally different development strategy and we are proud to be the lowest density development in the entire Caribbean.”
Over the years the original resort has expanded to include a P.B. Dye golf course with villas, a self-contained 100-slip marina, its own airport, an ecological reserve, a biodiversity laboratory and a horse ranch, among other amenities. Also in the complex are the posh Corales Residences, home to celebrities like Oscar de la Renta, Julio Iglesias and Russian dancer Mikhail Baryshnikov. It was here that renowned designer de la Renta hosted former President Bill Clinton and Sen. Hillary Clinton (D.-N.Y.) on their recent getaway to the D.R. “These type of people give us celebrity status,” said Rainieri.
Complementing the Punta Cana complex are a school, a shopping area and an international hospital. Future plans include another hotel complex and its own church.
Punta Cana International Airport
Punta Cana is relatively remote from the nation’s other airports, so Rainieri decided to build his own airport in 1983 and he is proud of the fact that “it’s the first fully privatized international airport in the world. Although the other airports are relatively close, the roads were and still are inadequate, so I decided early on that our airport was crucial to our development since we wanted to attract, firstly, Europeans, and then Canadians and Americans.”
Initially the original resorts in the region attracted mainly tourists from European and charter flights began to descend on Punta Cana International Airport (PCIA) from major European airports including Amsterdam, Brussels, Frankfurt, Lisbon, Madrid, Milan, Rome, Zurich and others. Later they were followed by scheduled European airlines.
Europeans were attracted by the attractive cost of a Dominican holiday as the all-inclusive concept caught on. The average stay of Europeans is ten nights since they get longer vacations than Americans whose average is only five nights.
Rainieri was naturally pleased with the popularity of Punta Cana with Europeans but he always envisioned Punta Cana becoming the playground for Americans and he worked relentlessly to promote his dream.
In 1996 PCIA only received 4,600 American tourists, mostly on charter flights. That number grew to 6,500 in 1997, 26,000 in 1998, 65,000 in 1999 and 126,000 in 2000, according to Rainieri.
“Last year (2001) the total number of Americans still grew slightly to 206,000 in spite of the Sept. 11 (9/11) terrorist attacks in the U.S,” he said. “We ended up last year as the fourth tourist destination in the Caribbean and the first in the D.R. with 931,000 tourist arrivals. That is directly attributable to our aggressive penetration of the U.S. market.” In spite of the disastrous ending of the year, 2001 marked a major milestone in the region’s tourism as more Americans than Europeans arrived at PCIA during the first six months.
Indicating that American Airlines is inaugurating direct flights to PCIA June 15 from New York and direct from Miami in November, Rainieri said “this is going to make it easier for more Americans to reach us and facilitate our marketing campaigns in other parts of the U.S. We are also encouraged by the decision of US Airways to inaugurate direct service from Philadelphia in November. We fully expect to host more than half a million Americans by the year 2005. Our optimism is also buoyed by Air France’s decision to have four direct flights weekly from Paris to PCIA starting Oct. 31.”
Following a disappointing fourth quarter of 2001, due to the fallout from the aftermath of 9/11, January was very slow with occupancy down 25%, according to Rainieri, and February was 18% but by March it was only down 3%. Weak markets presently are Germany (down 7%) and Argentina, which is now only sending one charter flight as week compared with 14 a week last year.
Welcomes Cap Cana Resort
Rainieri welcomes the new $3 billion, 30,000 acre Cap Cana Resort (CB Jan. 17) presently under construction nearby. “Its going to help us a lot because its right next store,” he said. “We will compliment each other” he added, looking out on helicopters arriving near his golf club house with players from Cap Cana.
“Our guests will be able to go over there for what they offer and their guests will be able to come over here and enjoy a different scene,” said Rainieri. “We’re low density and they’ll have a lot of different things like shopping centers. They’ll have a Jack Nicklaus golf course and we’ll have our BP.B. Dye golf course. Avid players will be able to use both. Actually when everything is complete in less than five years we’ll have two famous golf courses less than six miles apart. No other destination in the Caribbean will be able to say that.”
As a leading figure in the nation’s tourism development for more than 30 years, Rainieri is frankly concerned with “the lack of an overall plan in the D.R. as well as the lack of awareness on the part of most Dominicans of the importance of tourism and how they benefit from it.”
Severe infrastructure strain
Pointing out that in 1985 the nation had only 4,000 total rooms, Rainieri said “that figure has now reached more than 50,000 with more and more building going on which has resulted in severe infrastructure strain and the failure of an overwhelmed government to provide adequate services.”
Recalling the “tremendous impact of 9/11”, Rainieri said “I think the crisis has been good for the D.R because more and more people now realize the importance of tourism to our country and their attitude is changing.”
The exchange rate of the Dominican peso to the U.S. has been gradually sliding in recent months from 16.35 to 17.50 and Rainieri said “that reflects the decline in cash input of tourism into the local economy.” Indicating that a lot of Dominicans “still think the country’s major earner of foreign exchange is agricultural exports and they are always surprised that 50% of foreign exchange earnings come from tourism and half of that comes from the Punta Cana/Bavaro corridor. I’m amazed how some Dominicans view tourism as an “unstable industry, seasonal and controlled by foreigners.”
Enter Sandals and hopefully Air Jamaica
Rainieri is pleased that Gordon “Butch” Stewart, the Jamaican hotel mogul who heads Sandals and also Air Jamaica recently announced his decision to go ahead with his plans for a Sandals property in Punta Cana. “We think this is a perfect match,” he said. “Butch is a successful airline operator in addition to being a renowned hotelier. A see two definite advantages for us in the entry of Stewart and Sandals. First, his brand is well known in the U.S., Canada and Europe. That’s going to bring a lot more visitors to Punta Cana and that will result in our getting more attention.”
Referring to the “chicken and egg” situation which has chronically affected Punta Cana with regard to airline service, Rainieri said “we are very optimistic that Air Jamaica, which serves a number of markets with which we are not directly connected, will commence service to PCIA from such places as Los Angeles, Houston and even London. Air Jamaica serving us directly from them or in connection with its Montego Bay hub will help us and increase the number of passengers to Jamaica as well. We have particularly bad service from London presently.”
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