Hotel Executives on Headwinds Caused by Media Coverage of Dominican Republic

As part of Apple Vacations’ annual awards gala, and Apple Leisure Group’s (ALG) first “Ascend” conference, in Chicago this week, four hotel executives gathered at the Chicago Fairmont to talk about the headwinds that their businesses, and the industry in general, is facing.

Abel Matutes Prats, CEO of Palladium Hotel Group; Alex Zozaya, executive chairman of ALG; Gonzalo del Peón, president of AMResorts; and Jose Codola of Valentin Hotel Group were on hand for the panel.

The biggest topic of conversation was how the travel industry can change the narrative that has been built around the Dominican Republic over the past several months. All members of the panel said they are feeling the impact of the negative media and all four pointed to the attention, particularly from the U.S., as the reason behind that impact.

“We are in the era that … there’s more rush to be the first one to take on some news than really doing a background check of the real news to see if it’s something worth doing,” Matutes Prats said.

“It’s so frustrating for everyone,” Del Peon said. “It’s creating huge damage to a destination, to its communities, and staff members.”

The news has mainly impacted business from the U.S., with a smaller impact in Canada. European business is still strong, they said, which demonstrates just how powerful a bad story in the U.S. media can be for tourism, not just in the Dominican Republic, but in other regions as well.

Right now, hoteliers and resort owners who operate in the Dominican Republic are waiting on toxicology results from the FBI for two of the deaths that caused some of the more sensationalized consumer media headlines. (According to Del Peon, the Dominican Republic government has proof that none of the deaths were caused by tainted alcohol, but they are waiting on the FBI.)

New PR campaign set to kick off
They are also waiting on the Dominican Republic to start to combat that negative media attention with a public relations campaign that is set to launch soon. The country has hired the American public relations firm, Rubenstein PR, to help the effort.

According to Del Peon, the hoteliers are going to participate and support the campaign that the Dominican Republic eventually kicks off, but he hopes that the campaign gets started sooner rather than later, as “the damage is done and there’s nothing yet proactively presented to explain why there is nothing really concerning,” he said.

None of the positive media attention that the Dominican Republic could get if the FBI releases the toxicology report will play better than the negative attention that the country has already received, Matutes Prats said, which is why the country has to start getting proactive about repairing the country’s image as much as possible.

“It’s not going to be that easy to put the image of the brand of the DR to the place it was and also the news of the toxicology report being normal. That’s also going to be something that’s not going to be in the headlines for a bunch of days. As soon as they do that, they have to try and do a big campaign to reinforce the many strengths of the Dominican Republic,” Matutes Prats said.

One way that the Dominican Republic could kickstart the recovery, according to Zozaya, is to take advantage of the preclearence permission that the country received from the U.S. government in 2016 that would allow it to open Customs and Border Patrol (CPB) operations in Punta Cana, like CBP has in the Bahamas, Aruba, and other areas. According to Zozaya, it’s still not operating in Punta Cana right now and it would make it easier, and more attractive, for tourists.

“That allows a huge opportunity for travel companies to connect the Dominican Republic with places that don’t have customs or immigrations services,” he said.

All members on the panel were confident that the business to the Dominican Republic would return.

“We have seen cases like this before,” del Peón said, noting that the Riviera Maya came back after its hiccups. “When you have a good product at the right price in a beautiful location and the right promotion … at the end of the day, the market is going to come back … it’s not the first time, it won’t be the last.”

Getting that business, and the U.S. market, to return could prove massive for tourism business in the country because of the still-yet-untapped potential of that market. According to Zozaya, the number of new U.S. passports went up seven million to 22 million last year, and that number is still just 35% of the total population.

“Traveling used to be a luxury thing to do. Now, it’s becoming almost like a need,” he said. “I think we have only seen the tip of the iceberg.”

Advisor impact
According to the panel, the advisor channel is, and has been, crucial to the success of all of their brands.

“We are in locations where consumers might be unaware to know the best locations,” Del Peon said. “They still rely on the expertise of travel agents. People thought that, with the internet, agents would disappear, but we know that is not the [case].”

“We have seen all these hotel chains without big brand awareness with consumers in the U.S. be so successful because of the support of travel agents working in that space,” he added. “The advice from expert travel agents is still very important — those experts that have proven to have been a great value in their business.”

“We have different brands, and some brands we rely on more on agents for,” Matutes Prats said. “The brands we have in America, we really rely on travel agents and really value and appreciate what they can bring to the table.”

“We wouldn’t be here without travel agencies,” Codola said.

Part of the reason all the hoteliers were confident for a future that will see them competing against AirBnB and a hotel giant like Marriott (which is set to get into the all-inclusive market with marketing new properties in the Dominican Republic and Mexico starting in 2022), is because of the support they get from the trade channel.

“We welcome them,” Zozaya said. “They underestimate the power of the distribution, the power of travel agent, the power of packaging … and I think that’s why we’ve been more successful than they have. In our space, the distribution has become our advantage.”

“If they don’t start working with agents, they are going to have a hard time,” Abel said.