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Tourism Development in the Dominican Republic
Growth, Costs, Benefits and Choices

Anne Fuller

May 1999, Rutgers University

All rights reserved. No reproduction without permission.
Contact Anne Fuller at:
tel: 1-718-832-6672

"The cost of living is going up again
the peso which is dropping can’t be found
and you can’t eat beans any more
or a pound of rice or a measure of coffee
no one cares what you think
could it be because we don’t speak English?
Ah, that’s the truth
do you understand?
do you, do you?"
"El costo de la vida sube otra vez
el peso que baja ya ni se ve
y las habichuelas no se pueden comer
ni una libra de arroz ni una cuarta de café
a nadie le importa qué piensa usted
será porque aquí no hablamos inglés
ah ah es verdad
do you understand?
do you, do you?"

Juan Luis Guerra  "El costo de la vida"

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The 1960 Fodor’s Guide to the Caribbean devoted just nine pages to the Dominican Republic. The country offered "no real freedom of movement for foreign visitors, a reflection of political unrest behind the façade of efficiency." (Fodor, p. xxii) Fodor was merciless with "the only official tourist office in the Caribbean which seems to us to fail consistently in its task of promoting tourism. Its inefficiency is lamentable. Its standards of courtesy, far below the normal Dominican level…. We cannot deplore too strongly the incooperative attitude and the general inefficiency…" (Fodor, 327-328).

The same guide devoted 29 pages to the Dominican Republic’s neighbor, Haiti: "most exotic, very rewarding, plenty of accommodations from simple, low-budget to luxurious" (p. xxii).

In 1997, the contrast cannot be more complete. The Dominican Republic rolled out a warm welcome to 2,184,688 (*) overnight foreign tourists, making it the number two destination in the region, after Puerto Rico. Haiti, by contrast, received 148,735 such tourists. Political instability, violence and fear of AIDS effectively destroyed the Haitian tourist industry, which in the 1950s had been one of the region’s strongest. Now, at the end of the 20th century, Haiti is looking to the Dominican tourist industry for a leg-up rebuilding its own. According to a Haitian tourism official, each week some 2,000 visitors to the Dominican Republic are now crossing the border to sightsee in Haiti, "sophisticated travelers….cultural and adventure tourists, mainly Germans," according to a hotel manager. (Luxner, 1999)

Tourism in the Dominican Republic has contributed to creating a more diversified economy and helped fuel what has recently been strong economic growth. The destruction wreaked by Hurricane Georges in November 1998 will slow tourism’s growth but seems unlikely to change the economy’s direction.

Yet tourism’s effects are, of course, complex, and negative as well as positive. The Dominican Republic has undergone a transformation in twenty years from a largely rural, agricultural and culturally unified (if socially stratified) nation to one that is consciously part of a global economy and a transnational culture, where U.S. economic and cultural influence is enormous. Tourism is only one factor in this transformation, the others being large scale emigration and the Free Trade Zones that have brought factory employment to every corner of the country.

Although it’s not possible to entirely isolate tourism’s effects from those of these other developing trends, it is clear that tourism has contributed to a rise in prostitution, including child prostitution, rising crime, as well as begging and other negative behaviors. On the other hand, the all-inclusive resorts favored by Dominican planners have meant less contact between tourists and Dominicans, and the walling off of beaches to local people. The demands of international-class resorts on water and waste disposal facilities have created serious environmental problems. The economic benefits of tourism have gone disproportionately to elite groups and inflated prices have made life more difficult for the poor. A fifth of the population continues to live in appalling conditions of poverty.

(*) Tourism statistics, unless otherwise cited, are from the World Tourism Organization

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The Dominican Republic
In the global context, the Dominican Republic is a small country, but among Caribbean nations it is second only to Cuba in size and population. Its nearly 8 million people occupy 18,816 square miles, the eastern two-thirds of Hispaniola (an island the size of Ireland), which it shares uneasily with Haiti. To the east and south of Cuba, and directly west of Puerto Rico, much of Dominican territory is mountainous; the Pico Duarte, rising 10,420 feet into the sky of the Cordillera Central, is the tallest mountain in the Caribbean.

Hispaniola, as the Spanish named the island known variously as Quisqueya, Bohio and Ayiti by its original inhabitants, was the site of Columbus’ first settlement in the New World. Within 50 years of 1492, virtually the entire population of Tainos, Caribs and smaller Indian groups was wiped out by murder and disease. Santo Domingo, the capital, was the center of the Spanish empire for a period and its colonial churches, forts and other structures have been restored and constitute a major attraction for visitors.

Although in the 20th century sugar cane became the Dominican Republic’s economic mainstay, in colonial times plantation agriculture was little developed in comparison to the French side of the island, where tens of thousands of Africans were imported as slaves to work in the cane, indigo and coffee in the 17th and 18th century. For several years after Haiti won independence from the French in a bloody 13-year war, it disputed with France and Spain over control of the Western part of the island. The Spanish prevailed but a few weeks after Dominicans first declared independence in 1821, President Boyer of Haiti conquered the eastern side of the island and began an occupation that lasted until 1844. A largely bloodless uprising led by the romantic philosopher Juan Pablo Duarte succeeded in ousting the Haitians on February 27. Today Dominicans celebrate as this as Independence Day.

Partly in reaction to Haiti’s role in its history, Dominican leaders have often promoted Spanish cultural identity, along with occasional pride in Indian ancestry, although few traces of the indigenous culture actually remain in the country, all in order to dispel ideas of any African/Haitian heritage. Color and class stratification run together in great measure, with the traditional economic elite largely white, and widespread popular color prejudice of the sort that finds its way into everyday language calling hair "fine" or "bad."

The twentieth century has been shaped by United States intervention and occupation from 1916 to 1924 and again in 1965, and by the hegemonic rule of Dictator Rafael Leonidas Trujillo Molina for most of the period in between.

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Economic and Social Development
The Dominican Republic is a developing country, with per capita GDP one eighth that of the United States (and half of neighboring Puerto Rico’s) yet four times that of Haiti. While Haitians are crossing the border to seek a better life in the Dominican Republic, Dominicans are setting out across the Mona Canal for Puerto Rico and entry to the United States

Three-quarters of Dominicans lived in poverty at least through the late 1970s and conditions in rural areas were not unlike those of neighboring Haiti, with the vast majority unschooled and underemployed. Per capita GDP in 1960 was an identical $386 in both countries. (1987 US$, UNDP). It was a "deeply divided and unequal society," according to Wiarda. (1982, p.51)

Until the 1960s, the Dominican Republic’s economy was fundamentally agricultural, with sugarcane the dominant crop. In the late 1970s as tourism was taking off, a third of Dominican exports earnings came from sugar and another 30% from coffee, cocoa and tobacco. The country was largely self-sufficient in basic foodstuffs and also exported beef raised in the central plain. Mining for nickel, gold and amber was developed fairly late, but in the late 1970s accounted for 25% of export earnings.

The early to mid-1970s were known as the "miracle years." With sugar prices high, the Balaguer government borrowed heavily to finance extravagant public spending on infrastructure and monuments. The country’s level of indebtedness rose from $158 million in 1966 to $1.1 billion in 1978. (Ferguson, 1992) But there was no miracle for most Dominicans; the situation of the poor actually worsened in this period. When the international price of sugar and other primary commodities fell, and oil prices increases, a huge economic crisis ensued. Nature contributed to the debacle with Hurricane David in 1979, which killed at least 1,000 people and caused vast material damage.

Structural adjustment programs were prescribed by multilateral lending institutions, and these included devaluation of the peso, which had been tied to the U.S. dollar. Riots and protests in the mid-1980s were met by a crack-down from the military and police. Successive devaluations of the peso lowered wage rates, creating a key condition in the mid 1980s for attracting capital to its new Industrial Free Zones, and tourists to the best bargains in the Caribbean.

The changes in the economy are reflected in shifts in employment patterns. In 1970, 48% worked in agriculture; in 1990 only 25%. Services, which include most tourism jobs, went from 38 to 46% of the workforce. Industry employed 14% in 1970 and 29% in 1990, mostly in more than 40 Industrial Free Zones developed on the edge of every urban area.

The Dominican Republic’s economy grew 4% in 1994, 2.4% in 1995, 7.3% in 1996 and 8.2% in 1997, with the tourism sector’s growth in excess of 10 percent an important contribution. However, 21% of Dominicans live below the poverty line and according to the World bank "after years of very low spending, social indicators are weak compared to countries at a similar stage of development."

The UNDP’s Human Development Report reveals substantial improvement in some basic indicators during the 1990s. The proportion of the population with access to safe drinking water went from 35% to 63% (1996); access to health services went from 22% to 40% (1995); access to sanitation, 22% to 75% (1995).

The country ranking on the UNDP’s Human Development Index, a composite of economic, social and human-rights indicators, has gone up steadily. At 88 of 174 positions in 1998, it sits squarely in the ranks of middle income countries. (The U.S. is 4, while Haiti is 159). But its per capita GDP ($1,670, Atlas method, World Bank) is less than half the Latin American and Caribbean average and unemployment was 30% in 1996.

Life expectancy is 69.73, and infant mortality 44.26 per 1000 live births. The average woman now bears three children, down from seven 30 years ago. Important strides have been made in education. Virtually all children are enrolled in primary school although fewer than half go on to secondary school. Eighty-two percent of adults are literate.

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The Development of Tourism
Prior to 1967, more Dominicans traveled abroad than foreigners came to visit the country. (Freitag, 540). That year marked the start of serious efforts to develop tourism, with President Joaquin Balaguer (Christian Social Reform Party, PRSC) created a Ministry of Tourism with a director-general at its head. In 1970, INFRATUR was developed to monitor and to invest directly in tourist-related infrastructure projects. A Tourist Incentive Law (Law 153) provided tax breaks and fee exemptions for investments.

Support for tourism accelerated under governments led by the more liberal Dominican Revolutionary Party (PRD) from 1978-1986. The chief tourism official was raised to the Ministerial level, and in 1979, the budget contained money for international promotion of the Dominican Republic, $2.7 million. "Come to the land that Columbus loved best" ran the campaign.

"The Dominican Republic is a fresh and virtually untouched paradise," wrote Wiarda in 1982. "The Dominican government is banking on the ‘discovery’ of the country as a long-term bonanza that will generate millions of dollars in foreign currency while enabling them to further diversify their economy." (p.85)

Multiple devaluations of the peso created a tourism product that was unbeatable in price. A 1989 Washington Post travel piece, "Catch of the Caribbean," captured the attraction in its subtitle: "Affable, Affordable and Rich in History, The Dominican Republic Courts Beach-Bound Tourists," The author estimated that the DOMINICAN REPUBLIC was about half as expensive as Puerto Rico and Cancun.

Setting it apart from tourism in many other Caribbean countries, (and in a pattern different from that of its own manufacturing and mining industries), the Dominican tourist industry has been distinguished by its strong domestic-owned component. Although some foreign-owned hotel chains began investing heavily in the early 1970s (such as Gulf and Western with the luxury Casa de Campo), the industry’s development was primarily made possible by domestic investors. In 1987, only 21% of hotel rooms were estimated to be foreign owned. (Economic Intelligence Unit 1990:28, cited in Freitag, p. 540). In the region as a whole the figure was 63 percent. (Pattullo, p. 20)

As essential element in the tourism take-off was government investment in the infrastructure of tourism zones. Over $76 million went into the Puerto Plata region between 1974 and 1982. (Wiarda and Krysanek, 1982, p.85) Government planners rationalized that bringing facilities up to the level demanded by international tourists was more economically feasible in a few zones than in many dispersed locations (Freitag, p. 541).

Enclave resorts have been shown elsewhere in the Caribbean to promote high leakages and few linkages. Leakages were estimated by Pattullo at 70 percent for the Caribbean as a whole, meaning 70 cents on every dollar in foreign exchange earned is lost to imports, with the smaller islands with undiversified economies the most vulnerable. Jean Holder of the Caribbean Tourism Organization described the Caribbean as failing "miserably to maximize the possibilities for supplying the tourism sector" from local and regional goods and services. (cited in Pattullo, p. 39)

As for linkages, or tourism’s use of local goods and services, one study (1989, John Fletcher, University of Surrey, cited in Pattullo, p. 46) found a relatively high multiplier effect for the Dominican Republic. For every dollar spent by a tourist, $1.20 entered the economy. (Compare this to the Bahamas at 0.79)

Measuring linkages has been controversial in the Caribbean, which much of the discussion focused on the cruise industry, which is owned by large non-Caribbean corporations, and has, according to Pattullo, played countries off against each other to keep its port fees low. A study by Price Waterhouse for the Florida-Caribbean Cruise Association (FCAA), in 1994, which claimed that a cruise passenger’s expenditure of $100 produced a real impact of $250, was attacked for its methodology and conclusions (Pattullo, p. 166)

Freitag (1994) studied the effects of enclave tourism in a small coastal town near Puerto Plata. A 160-room international class hotel was built by members of the national elite on land sold to it by a local elite family. Restaurants in town bought their produce and fish locally, while the hotel usually shopped in the cities of Puerto Plata and Santiago. Some 116 local people were employed during peak season, all in low-status positions. Wages were high by local standards, and jobs there was considered desirable by many poorer residents.

While the hotel mainly attracted tour groups on an all-inclusive basis, for several months in 1989, they were filled with British budget tourists who had paid only for round-trip travel and rooms. This group quickly discovered that the restaurants, bars and gift shops in town were cheaper than those at the hotel and began to patronize them. Within seven months, the number of gift shops in town increased from nine to sixteen. For the hotel management, this was a problem, and they decided to not repeat such bookings. They also forbid consumption of non-hotel purchased food on the premises and opened a shop where tourists could buy the same foodstuffs available in town. These actions generated hostility toward the management.

When Freitag returned a couple of years later, the hotel was at near capacity, while in town, two restaurants had closed and two others were suffering. Five gift shops had shut their doors. He concludes that enclave tourism has limits as a development tool and "will not provide the impetus for regional economic diversification." (p.551)

Environmental problems have begun to reach the public eye. A 1994 guidebook was critical of conditions in the Puerto Plata region: "The surge in building has outpaced the infrastructure, which means that power failures and water shortages are a fact of life for the resorts and surrounding areas…..water pollution (from hotels in the beach-bordered areas) is a major problem." (Fielding, p. 390) In early 1998, a spate of reports appeared focused attention on poor hygiene standards in hotels.

Tourism is threatened by the environmental pollution caused by inadequate management and disposal of solid waste. Wastes generated in tourism centers are often either dumped in clandestine and improper sites, in open spaces, along roads and watercourses, or burned. Rivers and creeks transport the solid waste to the ocean thereby contaminating beaches used by the hotels (World Bank, 1999).

Among the most negative impacts of tourism has been the growth of prostitution. An estimated 50,000 people are involved in sex work in the Dominican Republic, and the country is now often linked with Thailand and the Philippines as the site of an exploitative sex industry. According to a sociologist who heads a group working with prostitutes on AIDS prevention, the country has "been famous as a place for a sex holiday since the 1960s….There is still a sector of the tourism industry which thrives by servicing foreigners sexually, both hetero- and homosexual." (quoted in French, 1992) Prostitutes can earn far more than hotel housekeepers or factory workers, and poor women from the countryside are easily drawn in. Women have entered the paid workforce in large numbers in the last twenty years, both in the factories, where they make up 60% of workers but few managers, and in the tourism economy, both directly and indirectly. Forty percent of working women head households that have no male adult members. The shift from a basically agricultural economy has led to deterioration of living and working conditions, according to the Ministry of Women’s Affairs. Tourism is contributing to important changes in social and gender relations.

Of urgent concern is sex tourism involving minors. A human rights group concluded in the early 1990s that sexual exploitation of both girls and boys was condoned "and most likely promoted" by the government, tourist services, travel agencies and hotels. (Mark Connolly, ‘Sex Tourism and Children in the Dominican Republic’, paper for Defense of Children International, New York, 1992, cited in Pattullo, p.90) Tourism officials are now said to be involved in coordinated efforts to combat child prostitution.

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Tourism Numbers

In 1971, the first year for which figures are available, 137,000 tourists, overnight and cruise passengers, visited the Dominican Republic. The million mark was passed in 1987, and in 1997 almost 2 ½ million people visited the country.

The majority of tourists come by air and stay for at least a week (Europeans average two weeks). Overnight visitors numbered 747,000 in 1986, 1,181,000 in 1991, and 2,211,000 in 1997.

The Dominican Republic is the most popular Caribbean destination for Europeans, and they make up 46% of its overnight visitors. In 1997, the countries sending the largest number of tourists were:

The numbers above don’t add up to a coherent total, because a large number of visitors’ country of origin is not recorded. (See appendix for chart of region of origin of tourists.)

Cruise passenger arrivals also increased during the same period, although in a much more uneven pattern, with a big decline in the early 1990s, before a rebound to 271,000 in 1997. The figures vary so that I suspect a change in data reporting method.

The number of hotel rooms available to tourists increased from 3,800 in 1974 to 38,505 in 1997. In 1993, occupancy was a high 75%. (Caribbean Statistical Yearbook, 1993, Barbados, 1994, cited in Pattullo, p.14). These rates have fluctuated but have remained quite high.

Tourism receipts also increased rapidly in the 1990s, more than doubling from 1992 to 1997, when they reached $2.1 billion. The Dominican Republic was one of six Caribbean countries that in 1992 earned more from tourism as a share of exports than from all other sectors. (IMF, Balance of Payments Statistics Yearbook, Wash, DC, 1993, cited in Pattullo p.12)

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Where do the Tourists go?
Tourism promotion for the Dominican Republic has focused first of all on its beaches, although historical interest has been an important theme since the beginning. Budget tourists have been a mainstay and all-inclusive "enclave" resorts are increasingly the rule. Some tour operators and guidebooks have taken to calling the county Dominicana, which they feel fits the Caribbean image better than Dominican Republic. Some others prefer the mellifluous Quisqueya.

Tourist hotel concentrations have been developed in several different areas of the country and the country now has five international airports, the largest at Santo Domingo and Puerto Plata. The major tourist areas are:

*Santo Domingo, a sprawling city of two million inhabitants with modern hotels and a broad seaside avenue, the Malecón, dotted with glamorous restaurants, clubs and high-rise hotels. Santo Domingo’s colonial city was declared a world heritage site by UNESCO in 1990 and has been carefully restored. Here, in the town founded by Christopher Columbus, was the first university, the first cathedral and first hospital built by Europeans in the new world. Nearby are the beach resorts of Boca Chica and Juan Dolio, where Dominicans mix with foreigners.

* La Romana, some 75 miles east of Santo Domingo on the south coast, was attracting wealthy tourists in the 1970s to Casa de Campo, a 7,000 acre resort designed by Oscar de la Renta. Also aimed at the luxury market is Altos de Chavón, a reconstructed 16th century Italian-style artists village perched on a cliff overlooking the Chavón River and the Caribbean sea.

* Puerto Plata, on the north coast, "renowned for its miles of unspoiled beaches" according to the World Travel Guide 1997-1998, was developed later and has attracted huge numbers of Europeans with budget priced tour packages.

* Samaná Peninsula, in the northeast, is known for its natural sites, including the parks of Los Haitises, rich in mangroves, birdlife and caves. It’s considered a site for Eco or adventure tourism.

* Barahona – the chief city in this arid, very poor region with spectacular wild beaches, is currently the focus of government efforts to develop tourism. The low-lying salty Lake Enriquillo straddles the border with Haiti and is home to the Isla Cabritos National Park with 62 species of birds and a large crocodile population.

* Jarabacoa Cordillera Central – the resorts in these mountains are popular with Dominicans and are seeing growing international interest from eco-tourists.

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What should Tourism’s role be?
Hall (1994) discusses competing frameworks for understanding tourism in developing countries, focusing on the meaning of development and the ways that governments situate tourism as a development engine. Development goals related to tourism include economic growth, modernization, distributive justice, socio-economic transformation, spatial reorganization, sustainability. Third world tourism has been described as a form of imperialism, a version of economic dependency, and a new type of plantation economy. (Hall pp. 125,127) Both its economic and cultural aspects come into such analyses. Tourism in the Dominican Republic, as in other developing countries, is an interplay of unequals, with visitors from rich countries dropping in on the poor, highlighting their disparities of wealth, disturbing local culture by raising expectations that cannot be met within the society.

Yet as Hall notes (p. 122), there are currently few if any viable alternatives to tourism for nations wanting to create employment and economic development opportunities. "The issue should therefore [at least practically speaking] more one of control over the development process rather than the process itself."

The Caribbean is more tourism centered than any other part of the world. Even countries that remained outside the tourism orbit for decades are now seeking a way in. In the smaller islands, tourism threatens to become a new monocrop, leaving countries as dependent and vulnerable as ever. The Dominican Republic is in the more fortunate position of having a larger and relatively diversified economy. Yet there has been little democratic participation in tourism planning in the Dominican Republic and not enough attention paid to the needs of the country beyond job creation. Little planning has gone into building-in linkages to other sectors of the economy, and enclave tourism has been encouraged to the detriment of broader distributive justice and socio-economic transformation.

As Michael Manley. the late Jamaican prime minister, wrote in his foreword to Patty Pattullo’s Last Resorts:

"The Caribbean needs tourism….Yet if its underlying dynamics are not understood, it can be an engine of short-term cash enhancement and long-term disaster. The danger lies in an industry increasingly based on the all-inclusive resort, walled off from the surrounding countryside and importing its food and furniture, its designs and designers, its fabrics and fashions from the U.S. mainland…

"[W]ith proper planning and popular participation, the tourism sector can become the best market for a great variety of products and activities, involving whole industries, professional groups and individuals. It can be the primary target for our architects and builders, for our artists and crafts people, as well as our farmers….can provide a vital stimulus to regional production…"

A smaller-scale, more idealistic view, is that of the Kiskeya Alternative Destination project, a Dominican Republic based group that is working to determine how the Internet can be used to form a "cooperative network of cultural/environmental/social sustainable tourism initiatives" and enable sustainable tourism by introducing new promotion and commercialization channels. It believes that mass tourism development is short-sighted and harmful for the region and its inhabitants. The group defines sustainable tourism projects as those that:
*respect and valorize local social, cultural, human and environmental values
* promote involvement by community members
* bring direct financial benefits or resources to the community
* integrate monitoring mechanisms into the above criteria
Can such values be carried over to the planning and development of tourism throughout the Dominican Republic without harming the jobs and economic growth that tourism have brought? That’s the challenge.

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Charts illustrating the growth of tourism in the Dominican Republic







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taptap haiti    |   October 12 1999