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Competition surges in the Post-Pandemic Era

Thursday, August 01, 2024 Article

Now is the time for Puerto Rico to retain its leadership position gained after COVID-19.

Since 2021, Puerto Rico has shattered every year all performance records, significantly surpassing pre-pandemic levels of visitors and traveler spending.

Other travel destinations, meanwhile, are just beginning to return to pre-pandemic levels.

According to the most recent trend report from the United Nations World Tourism Organization (UN Tourism), many Asian destinations are reintegrating into traveler markets by improving their air connections and making it easier to obtain tourist visas. This region has faced the most delays in recovery, partly due to prolonged post-COVID-19 restrictive measures. UN Tourism estimates that by 2023, Asian markets received 65% of the tourists they had in 2019. In other words, the passenger market was 35% lower than the pre-pandemic year. This percentage decreased to 18% by the first quarter of 2024, with expectations for it to reach pre-pandemic levels soon.

2023 also marked a path to recovery for many European and American markets, which improved their connectivity, facilitated access, and stimulated economic growth.

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Tourists walk into El Morro, Old San Juan's historic fort.

The Path to Sustained Tourism Success

In our region, the Dominican Republic improved its air connections, according to the Caribbean Travel Trends 2024, report made by the Caribbean Hotel and Tourism Association (CHTA). They are also working to create new products such as hotels, attractions, cruise ship docks, and experiences. Costa Rica is intensely committed to the sustainability of its tourism offerings, while Colombia invests heavily in marketing to attract traffic.

According to the CHTA report, the Caribbean increased its air capacity from North America by 14%, from Latin America by 6%, and from Europe by 2% in the last year. Much of that increased traffic landed at airports in the Bahamas (+19%), the Dominican Republic (+14%), Aruba (+24%), and Puerto Rico (+15%).

Additionally, there is competition from destinations within the United States.

Puerto Rico is in a strong position to face these challenges. For three years in a row, the industry has surpassed its top-performing years with more visitors, increased travel spending, and longer stays. Six years after the creation of Discover Puerto Rico, the Island has a solid, expanding tourism brand, and the industry is more aligned and integrated.

However, delays in issuing tourist visas limit the ability to sustainably attract travelers from markets without free access to U.S. jurisdictions. About 90% of travelers arriving at the Island come from the U.S.

Fortunately, the U.S. economy is showing signs of strength, with the threat of a recession dissipating as inflation stays under control and supply chains remain stable, according to data from the U.S. Reserve Bank and Future Partners' State of the American Traveler survey. Nevertheless, our industry is seeing a slowdown in travel, with consumers far more likely to look for deals and discounts.

Puerto Rico is entering a new stage in its tourism development. It will need to innovate, create new products, and reinvent itself to maintain its leading position amid increased competition. Over 100,000 workers in this industry depend on the continued vigorous development of our tourism sector.

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