Speech by new Asonahores President Luis Lopez during the presentation of the hotel association’s new board.
To lead a business organization of any nature is always a great challenge. In the case of the National Association of Hotels and Restaurants it is more so, because of the characteristics, the economic and social importance and the complex agenda of the sector it represents.
For 43 years, Asonahores has been an organization with a tradition that has built up a national leadership and stimulated the government and society to understand the worth of tourism and adopt constructive attitudes towards the industry.
We inherit this legacy with an awareness of its significance, of the efforts involved in building it, and thus, of the responsibility that we now have to administer this institutional heritage and to multiply it, recalling the parable of the talents, where the hardworking serf used his initiatives to multiply a hundred-fold the goods his master had entrusted to him.
Associations like ours strengthen the consensus-building process, achieving unity in diversity, assuming the focus of development that stimulates private investment that is the true engine behind wealth creation and establishing a balance between the role of government and that of the association. Accepting that, due to each one’s nature, it is normal that different focuses need to be reconciled in a relationship between equals, which is how governance is achieved in a democracy. The state is also the tourism sector’s main partner, because it receives directly around US$120 per visitor by way of taxes and surcharges, or over US$600 million a year.
The advantage in heading this organization is that we have cultivated an institutional culture that promotes participation and avoids solitary presidencies. The Board of Directors that I work with is made up of businesspeople with long-term experience in the industry, with a proven track record of service vocation and many years of involvement in the institution. We also have the experience of past presidents, all with a history of contributions and achievements as businessmen and leaders.
The current changes and trends in the principal markets, the emergence of new destinations and the evolution of the economy and local events, bring to the government and the private sector a packed agenda that has obliged us to find new cooperation formulas and to innovate by building solid bases for a sustainable tourism industry.
One of the basic themes has to do with the existing vision on the concept of “tourism destination.”
Destination is a broader concept than a simple hotel, with its beaches, its food and beverages, and animation programs. We need to include its people, its culture, the complementary attractions, the nightlife, adequate transport, the communities and the public services that are offered to the traveler.
The concept of “tourism clusters,” which was recently introduced to the country’s tourist regions, sets forth a redefinition that indicates the road that needs to be followed, since it proposes the integration of all social segments that have an impact on tourism. It also calls for the integration of local municipalities, that is the way that the territory of a region or tourism destination is organized.
It is important to create an awareness of the roles played by each of these parties that together with the hotel make up the “tourism cluster” in each region, province or municipality. It is fundamental, because in it is the origin of the inconsistencies that cause each to go on its own way, and the only way to overcome the gap that exists between the pace of tourism development and the pace of the rest of the community and state that need to participate as the backbone to development.
It is essential to revise the institutional management and the commitment of the municipality as administrator of the territory where the tourism activity takes place. This use of resources has been defined, but it is also true that the present formula is dysfunctional when allotting funds to the municipalities based on the number of inhabitants formally registered in the census. The scheme is not fair to the tourism municipalities, which believe that they are affected by allotments that do not reflect the reality of their population.
Tourism communities have to manage the effects of a floating population that rotates permanently in its territory, made up by immigrants from other regions of the country and tourists. This population is not taken into account when resources are allocated, instead creating a demand for unfulfilled services. The injustice is double, because the presence of this floating population is one of the main sources of income for the government and thus for the funds that are distributed to the city governments.
This situation needs to be corrected by mechanisms whereby an adequate proportion of the resources assigned to the municipalities by law is specialized and distributed according to the number of hotel rooms registered by the Ministry of Tourism, only to be used to see to the demand for services that tourism creates.
Another reality that shows the gap between tourism and the rest of the institutional base is the problem of public health. Our sector regularly experiences tension due to topics such as malaria and dengue. In the eastern region, the Association of Hotels has had to take on the responsibility for an anti-malaria program, which should be the state’s responsibility, because resources have not been assigned. That is the role of the state, not the private sector, and it would be resolved if there were adequate public health policies.
Along this line of thought, is the lack of ground use order as another factor that contributes to the gap, dispersion and lack of coordination, indeed among the same public sector administrative departments that affect the management of the tourism industry.
The lack of ground use order stimulates the growth of slums and creates uncertainties in the future situation of investments. An institutionally firm ground use planning process would become a factor of order, would contribute to sustainable development and is an important way to attract new capital. It also has the advantage of indicating in a precise manner what can and what should not be done, and avoids confrontations and accelerates the processes that have an effect on the initial costs of projects.
The lack of infrastructure is another crucial area in which decisions are needed, as it is one of the great limitations to the sustainability of the sector.
We need to recognize efforts by President Leonel Fernandez Reyna, as well as by Minister of Tourism Felix Jimenez aimed at bringing about improvements in tourism infrastructure. Nevertheless, these efforts have not been sufficient, as there is an accumulated deficit of 25 years of tourism development and scant state investment in basic infrastructure. The government does not have the resources for the growing demands for public investment, and thus the only alternative is to open the doors to private investment with a concessions law to build the highways, aqueducts, sewage systems and other installations that are needed.
We need to test this route to attract capital to rapidly build the modern highways that are necessary for internal communication in tourist areas and to connect the different regions. With well-lit highways, with landscaping and surveillance, we would make a huge difference and the entire country could become one great destination, we would enrich the offer and expand the impact of tourism to the entire country.
One of the points pending on the agenda that has great impact, and in which we will work with the Ministry of Tourism, is to create the Trust Law, with the objective of handling international promotion and specialized resources for tourism infrastructure.
This trust of mixed government-private sector participation, as an autonomous entity, has been one of the decisive factors in the growth of tourism in the Maya Riviera, the quality and the good image of that tourism product. This mechanism, for which a first draft is available, would be a major step ahead for our country.
Tourism is an opportunity for thousands of young people who graduate from high school and cannot enter universities, and also don’t have the training to enter the workforce.
Each year, thousands of posts are created in hotels, restaurants and other companies working in tourist areas that could provide employment for graduates of a optional technical tourism high school curriculum that provides good language training, and trains waiters, bartenders, kitchen aids, etc.
The Institute for Technical Professional Training (INFOTEP) and many hotel companies make a great contribution to training personnel, but this is not enough. The Ministry of Education would do a great service to the country and to Dominican youth if it were to introduce this educational reform. Asonahores will continue to press for this.
The current agenda includes other topics of great breadth. One of these is make the most of the Dominican Republic as a destination that is attracting real estate investments.
Recently, a person responsible for one of the leading Florida luxury property realtors commented in the local media on how the Dominican Republic has become fashionable in this market. This is a growth moment for this product.
We need to focus our attention on this promising sector that creates a permanent flow of tourism and promotes the country, because these are people who are making a permanent investment in a vacation property, that they, their family and their friends will use, and this in turn creates permanent jobs and increases consumption.
We need to care and nourish this market because in the 1980s, Puerto Plata enjoyed a very promising real estate boom, which was frustrated by problems that affected the region’s image. At this time, the country went through an acute economic crisis that affected fuel supplies, electricity and other basic services, killing the incipient real estate industry.
The vacation real estate property market has made a comeback, motivated by the successful projects in the east. There will soon be other projects in Samana and the north coast. This activity is a great opportunity for the country, and to consolidate it we need to definitely resolve the problems with the government’s land registry agency, the issue and registration of property titles, to make this more transparent and improve the operation of the jurisdiction of land. Essential actions need to be taken to grant increased juridical security to real estate investment and continue to attract foreign investment.
These obstacles could pose a formidable barrier to the billions of dollars in potential investments that the country could attract during this decade. The business is so promising that Mexico and several countries in Central America have already made legislative reforms to create attractive conditions for the hundreds of thousands of US citizens with good savings and good pension plans who are interested in purchasing a vacation or retirement home in North America, Central America or the Caribbean.
In the east and in Samana alone the construction of more than 20,000 tourism homes is planned that will attract more than one billion dollars in investment to the country, will contribute hundreds of millions in investment to the government, and will create thousands of jobs in construction work and permanently in the maintenance and care of these properties. Some residential complexes are planned for the north coast that will decidedly contribute to improving this tourist region’s image and will create a new opportunity for Puerto Plata. We cannot allow ourselves the luxury of losing this opportunity.
The backdrop for these and other concerns in the tourism industry in relation to the new world scenario is the theme of competitiveness. Asonahores has stressed this point insistently because it is the key to the door and gives the industry access to the road to sustainability. We need to see competitiveness as a circle made up by quality, image, costs and finally profitability.
We cannot compete without quality of product, that is without trained people, good services, complementary attractions, cultural components, adequate infrastructures, appropriate installations, public services, etc.
We cannot remain competitive in today’s world without a distinctive and strong brand, advertising, promotion and public relations that ensure our presence and penetration in the markets we seek. In this aspect, the present authorities are making a great contribution that needs to be recognized.
We cannot achieve this if we do not control the factors that affect the costs of our businesses and keep a balanced relationship between quality and price. Our tax burdens, which increased by over 30% last year, as well as the main inputs that on the whole are more expensive here compared to Mexico, our main competitor.
Finally, the circle of competitiveness will not close if we as a destination fail to offer adequate yield to investors. Without profitability there is no business, there will be no investment and we will end up losing the opportunities that tourism offers as a road for development. The best indicator that we are losing competitiveness is that we are becoming less attractive for investments, as has been demonstrated by the fact that our competition is growing faster than we are.
Ladies and gentlemen, everything we do will have been in vain if we do not respect nature as the base of sustainability of economic and social development in general and tourism in particular. Harmonizing development and the environment is the greatest challenge that the country faces. Tourism needs to be the best ally for enhancing natural spaces with the contributions that humans can make in order to use the environment for their recreation.
Asonahores feels committed to the harmonious and friendly development of the environment and we will promote good practices among our members, to prevent abuse and over-exploitation.
In closing these comments on the agenda of the moment, I would like to refer briefly to some internal points about Asonahores.
I emphasize our role as a service organization for our clients that are our members. Our existence has two dimensions: one to represent and defend the focuses of the private sector as a role player of development and the other to be a platform for service.
The Dominican tourism industry has interests that need defending internationally, primarily in the Caribbean region. With 60,000 hotel rooms, we are the leading offer in the Caribbean. We understand that Asonahores needs to secure a greater international presence and make the most of those scenarios. We propose to work towards accomplishing that goal.
Finally I would like to mention the Asonahores Foundation, whose promoter, our former president Enrique de Marchena Kaluche, defined as the social side of the Association. We will strengthen and expand the Foundation’s social work with new projects and programs that will demonstrate the true vocation of social responsibility that hotels and restaurants have towards the country.
I conclude with a call to the members of Asonahores and to all present to contribute so that this board can fulfill its task of building consensus, maintaining unity in diversity and achieving the balance needed to reconcile Asonahores’s role as representative of the private vision of tourism development and the role corresponding to the public sector.
Thank you very much.
12 September 2006