The media frenzy triggered by the discovery of a couple dead in their Dominican Republic resort room in May has dealt a heavy blow to the Caribbean’s most popular tourist destination.
Since the couple’s death, at the Grand Bahia Principe La Romana, every subsequent death of an American tourist has attracted renewed media attention and a review of recent American fatalities in the destination. Reports of a third death at a related property, the Bahia Principe Bouganville, five days earlier, along with a recent death at the Hard Rock Hotel and Casino, spurred families of visitors who died a year ago to come forward, suggesting these earlier fatalities also occurred under questionable circumstances.
Publicity surrounding the deaths – a total of seven American tourists in 2019 – has drawn the attention of U.S. authorities, and the U.S. Federal Bureau of Investigation and Centers for Disease Control have stepped in to investigate some of them. In a statement, the U.S. State Department said it is closely monitoring investigations.
“Speaking generally,” the statement noted, “we have not seen an uptick in the number of U.S. citizen deaths reported to the department.” During all of 2017 and 2018, 30 Americans died on the island of non-natural causes (drowning, accidents, suicide, homicide), according to the U.S. State Department.
The U.S. ambassador to the country said the incidents should be considered coincidental and asked for patience while waiting for the results from toxicology tests in some of the deaths.
That official response matters, since the U.S. is the biggest feeder market for the Dominican Republic, accounting for some 40% of the 6.5 million annual visitors to the island. And the headlines have caused a backlash.
Forward Keys, which follows flight reservation trends, reported that bookings from June 1 to 17 for July and August arrivals to the Dominican Republic were off by 59% from a year ago. That reverses a 2% increase in passengers through the end of May. Flight cancellations were up 45%. InsureMyTrip reported a spike in calls from skittish travelers who were canceling plans or had questions about coverage for future trips to the island. Search queries related to travel insurance were up 600% compared with the same time in 2018, InsureMyTrip said.
“It is evident to us that the media attention has created a material negative impact on travel to the D.R.,” SunTrust Robinson Humphrey (STRH) said in a report on Playa Hotels & Resorts, one of the largest operators on the island. The report forecast a 2% drop in EBITDA this year and a 4% decline next year.
Before the negative media attention, tourism had been growing at a healthy pace for the destination, which saw arrivals jump 6.2% last year 2018 and 3.7% during the first four months of 2019. “The markets have been doing exceptionally well,” says Daniel Stockhammer, associate director at Horwath HTL’s Santo Domingo office. “Despite having about 90,000 rooms, occupancy has been among the highest in the Caribbean.”
The good news: High season is over, and it doesn’t pick up again until December. The bad news: STRH says similar incidents typically take 12 to 18 months to fade from memory.
Response from government, operators
When the news coverage started accelerating, Dominican officials responded with condolences and statistics supporting the nation’s image as a safe destination. The tourism ministry pointed out that the rate of tourist incidents last year was 1.4 for every 100,000 visitors. And Dominican authorities have insisted that natural causes are responsible for the deaths under scrutiny.
On June 21, government officials held a press conference to address the issue head-on. “The Dominican Republic is a safe country,” Minister of Tourism Francisco Javier Garcia said. “There is not an avalanche of deaths.”
He cited statistics and the fact that the U.S. State Department travel alert system rated the Dominican Republic as a level 2 (“exercise increased caution”), the same rating afforded Spain, France and other countries. He also dismissed the notion that recent deaths were “mysterious,” noting that the cause of death in each case was documented in autopsy reports.
Bahia Principe Hotels & Resorts, which operates the two resorts where three deaths occurred in May, released a statement decrying “the erroneous information that has been published, with which we do not agree,” and noting that the company “has suffered great damage to its image and reputation. Serious insults and threats have been imposed on some of our more than 15,000 employees and their families.”
Similarly, the Hard Rock Hotel in Punta Cana decided last week to remove liquor dispensers from guest room minibars, according to news reports, a decision a hotel official said was independent from the recent death at the hotel.
STRH, not surprisingly, expects widespread discounting will be employed to shore up occupancy. Hilton stepped up promotions for its La Romana resort late in June. Marriott and IHG, meanwhile, said their resorts were operating without incident; Marriott reportedly had seen no appreciable change in business as of the end of June.
“We have seen such events as part of an industry cycle,” Stockhammer says: Natural disasters, crime, a foreign tourist dies or goes missing and the death stirs up unflattering media attention. “A number of them have stopped industry growth. But normally more tourists arrive.”
Widespread devastation from 2017 hurricanes blunted demand for a number of Caribbean locations, but they have largely bounced back, he notes. Costa Rica and Jamaica have taken hits over crimes involving tourists, but they remain popular vacation spots.
Stockhammer says attention from the Dominican Republic tourist deaths could have been handled differently by the government and affected hotels to circumvent the swirl of media rumors and tourist insecurity. “There are established crisis management protocols, and I think they will keep improving on those. Every time there is an incident it helps to reassess what you have in place.”
He added that the June 21 press conference was a crucial step. “The most important thing is that the authorities take action to clarify the situation,” Stockhammer added.