Case Study

Sustainable tourism fuels Dominican economy

La Romana-Bayahibe, Dominican Republic | March 24, 2004

Despite devastation wreaked by Hurricaine George in 1998, the Dominican tourism industry has grown dramatically over the past decade. This growth has thrust the service sector ahead of agriculture as the Dominican Republic’s largest employer, creating a need to better manage the country’s natural resources and develop its tourism industry.

Through the Competitiveness Initiatives Activity, USAID and its partners are helping Dominicans capitalize on this growth by tapping the country’s potential to generate higher returns through tourism clusters.

“There is so much potential in the Dominican Republic to further develop not only its famous beaches, but also to create hubs for tourists to visit the interior of the country and expand the benefits of tourism,” Chemonics Senior Manager Dan Cruz-DePaula said. “Cooperation through the clusters is an effective way to maximize this potential.”

These clusters, set up in different parts of the island, are made up of hotels, businesses, municipalities, environmental groups, and NGOs. Clusters bring groups that have a stake in the tourism industry together to increase cooperation and to develop brand names for these regions.

In La Romana-Bayahibe, a project-supported cluster developed a $700,000 budget for an advertising campaign geared in part toward U.S. tourists, especially those interested in exploring areas outside the reach of resorts. U.S. tourists are nearer to the Dominican Republic and tend to spend more than Europeans.

Together with the cluster, the Romana-Bayahibe Hotel Association invested $150,000 to establish direct flights from the United States. US Airways now flies regularly from Charlotte, N.C., to La Romana as a result of this investment.

To appeal to tourists’ environmental conscience, the association also implemented the GreenGlobe and Blue Flag rating systems for Bayahibe beach resorts. Rating systems distinguish hotels and resorts as eco-friendly and safe, giving them enhanced brand value.

By increasing brand value and streamling travel, the Dominican Republic hopes to attract more tourists and generate higher returns.

But growth in tourism does not come without challenges. Development puts pressure on the country’s fragile ecosystems, including the rainforests and marine reserves upon which the tourism industry depends. The Dominican Republic’s appeal could hang in the balance.

According to USAID, growth in tourism can be sustained only if the Dominican Republic better protects its environment. The agency is therefore working to achieve a balance between development in tourism and environmental protection, an issue receiving increased attention.

Media coverage has made consumers more aware of the environmental damage tourism can cause, NGOs have gained ground, and conventions and treaties have thrown sustainable tourism into the spotlight.

This is good for both the tourism industry and the Dominican economy as a whole, according to Chemonics responsible-tourism specialist Dave Gibson. 

“A decline in environmental impact leads to consumer satisfaction, which in turn leads to repeat visitation and word-of-mouth marketing,” Gibson said. “This can create higher and more sustainable returns to local communities, spurring economic growth and reducing poverty.”

Gibson points out that a steady rise of incomes encourages reinvestment, stimulating the economy and boosting tourism even more. This leads to improvements in operational efficiency and cost reduction, allowing the Dominican Republic to secure a larger share of a highly-competitive market.

But this situation is not unique to the Dominican Republic. 

In Botswana, USAID and Chemonics used tourism to reduce poverty in rural areas and protect the environment. Their nine-year effort helped nearly 65,000 people in 59 villages better manage natural resources and returns on tourism while significantly elevating household incomes in places with few alternatives.

In Morocco, a USAID-funded project fostered development of two-dozen tour itineraries and community-based strategies in rural regions to attract U.S. and European tourists, helping diversify the tourism economy and create jobs beyond the major beach destinations.

And in the Philippines, the agency and Chemonics helped several resorts and hotels reduce waste and install the ISO 14001 environmental management system, which emphasizes a commitment to protect the environment.

“USAID and development practitioners are increasingly turning to sustainable tourism as a way to provide communities with economic incentives to protect the environment,” Gibson said.