Dominican Republic’s tourism industry takes a sustainable turn

In 2023, tourism revenues as a percentage of national gross domestic product (GDP) stood at US$ 9.75bn, according to Statista, 16% up from the previous year. Its contribution to Gross Domestic Product (GDP) is modeled somewhere between 9%, by the World Travel and Tourism Council, and up to nearly 20% when including indirect income, estimates the National Association of Hotels and Tourism, ASONAHORES.

The percentage of GDP is the highest in Latin America and five times higher than the region’s average of 1.8%, according to analysis by Latinvex based on statistics from UN Tourism, so no wonder the sector remains a key priority.

With forecasts promising compounded annual growth rates (CAGR) to stay in double-digit territory, the growth potential is undeniable, but the future of Dominican tourism lies in less trodden paths.

Uncovering hidden gems

New developments such as Cabo Rojo show the way forward, in a private-public partnership that aims to promote destinations in a planned and sustainable way, that prioritizes an inclusive proposition for visitors and locals alike. 

Backed by Banreservas, the project includes a port for two ships, an amusement park, restaurants, bars and a wellness centre. Tours will honour the region’s mining legacy and offering an insight into the region’s culture.

The state-owned bank is also behind Punta Bergantín, in Puerto Plata. The project plans to transform the coastal land into an urban tourism hotspot, combining sun, cinema, and technology, as well as a mix of residential real estate, hotels, and innovation districts, all developed under high sustainability standards. Working closely with the consultancy firm Centre for Sustainability and Excellence, which assessed the project for its ESG compliance, Banreservas has ensured that sustainability criteria are embedded in the project's financing structure.

Sustainability is at the core of many new projects, as the country seeks to diversify its offering beyond beach and cruises. Growing drivers of activity include community-based tourism, digital nomads who make the most of high-speed internet and affordable prices, adventure and sports tourism for activities such as kitesurfing or diving, and healthcare tourism, as the country capitalises on its cosmetic surgery and dental industry credentials.

Beyond the appearance of being green, sustainable tourism means a real long-term economic opportunity. The global sustainable tourism market was valued at US$ 208.2 billion in 2023 and will continue to grow at more than 12% annually through 2028, according to Global Data.

The shift toward sustainable tourism also addresses a critical economic challenge. Earnings per visitor from all-inclusive and cruises tend to be lower than other more engaged visitors, who spend more in the local economy, argues Martha Honey, Co-Founder and Director Emeritus of the Center for Responsible Travel (CREST) and CEO of Responsible Travel Consulting.

Therefore, efforts to attract a different visitor profile that values longer stays and engages with the local community is not only socially and environmentally positive but also brings economic benefits, Honey adds.

Leading from the front

A steadfast ally of Dominican tourism, Banreservas is the leading loan provider in the market, accounting for 44% of the credit market to the tourism sector, according to data from the national banking authority (Superintendencia de Bancos).

Its leadership was recognised in 2024 with four Euromoney Awards for Excellence: Best bank in corporate responsibility in Latin America, and in Dominican Republic; best bank in Dominican Republic and best bank in ESG in Dominican Republic.

Overall, the Dominican banking sector continues to support the development of the local tourism industry, with a loan portfolio that reached RD$117,714.5 million (US$1.933.2 million) by the end of 2024, representing 10.2% of private commercial loan portfolios, according to the supervisor.

The services sector alone has grown by 5.4% year-on-year as of November 2024, with hotels, bars, and restaurants standing out as the leaders of the Dominican economy, with a growth rate of 9.4%.

Banreservas anchors this upwards trajectory, says Samuel Pereyra, CEO. “This achievement is due to our growth strategy, which focuses on designing a portfolio of products and services specifically tailored to meet the unique needs of tourism businesses, aiming to optimize their financial management. At the same time, we provide personalized advisory services to each of our clients, helping them to achieve stability and profitability in their businesses,” he says.

Inclusion is at the core of the bank’s sustainability commitments. Financial inclusion, on one hand, is a key plank of the bank’s strategy and of the country’s development in equal parts.

Among Banreservas’ innovative programs to ensure tourism benefits extend to local communities is "Bancarizar es Patria" (loosely translated as “Banking inclusion is Patriotic”) The impactful initiative has taken banking services to local communities, who were previously unable to access basic services such as digital accounts. The project has opened over 7,000 new bank accounts across six regions, integrating previously unbanked communities into the formal financial system and giving them the tools to grow their local businesses.

Another key initiative is the Labour Inclusion Program, an upskilling project dedicated to disabled groups, led by Banreservas Volunteering group in collaboration with Asonahores.

The implementation of this project is a significant step forward in labour inclusion, positively impacting the families and communities involved. It fosters an inclusive organizational culture in the hospitality sector that highlights the importance of human talent with disabilities in the tourism industry and their valuable contributions to the sector’s growth.

“Both programs represent a clear commitment to the vision of ‘bringing the bank where the customer is,’ ensuring that every Dominican, regardless of their circumstances, has access to the tools necessary for their financial and personal development. This innovative approach not only benefits individuals but also contributes significantly to the country's progress and sustainability,” says Pereyra.

Challenges on the road ahead

The Dominican Republic's sustainable tourism sector presents compelling opportunities for financial institutions and investors alike. Success metrics are evolving beyond visitor numbers to focus on economic impact and environmental sustainability. This shift, combined with strong growth projections and increasing institutional support, positions the sector for sustained success while ensuring environmental and community benefits.

But with the opportunity come additional questions on how to measure impact and ensure the fine balance between economic growth and overtourism, between sustainable investment and greenwashing.

The Dominican Republic's tourism sector is increasingly embracing international eco-certification programs to validate and showcase sustainable practices. The Global Sustainable Tourism Council (GSTC) has emerged as a leading authority, setting comprehensive standards that several Dominican properties have successfully achieved, as well as providing local training.

Citing Grupo PuntaCana as a trailblazer development back in the 60s, responsible tourism expert Honey highlights Dominican Republic’s track record in building a tourism offering that prioritises human capital and local infrastructure. But to push ahead with an even more sophisticated proposition, the country could do with the development of a national certification program akin to Costa Rica's highly successful CST (Certification for Sustainable Tourism), Honey noted.

Luckily, work is in hand. In April 2024, The Domincan Ministry of Tourism launched a series of meetings with public, private, and third-sector entities in the tourism value chain, with the goal of creating the National Sustainability Strategy for the Tourism Sector. 

The two-day workshops that kicked off the Sustainability Plan were supported by UNWTO, the United Nations' specialized agency for tourism, which promotes responsible, sustainable, and accessible tourism, and saw a plethora of stakeholders from academia to business associations, including finance and regional leaders come together. 

Kickstarted by tourism minister David Collado, the plan reflects the government’s pledge to turn Dominican Republic into theregional leader in sustainable tourism.

“The adoption of responsible practices is essential to minimize the environmental impact of tourism, such as reducing waste, preserving biodiversity, and using natural resources responsibly. Ensuring that all stakeholders in the tourism value chain adopt sustainable practices is crucial going forward, says Banreservas’ CEO Pereyra.