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Friday, April 1, 2011

Tourism leaders worry spiraling fuel cost threaten 2011 profit, revenue

Tourism business leaders worry about the movement in fuel prices in the first three months, and express uncertainty in reaching their 2011 goals.

They say the price of the airplane fuel avtur jumped RD$30.16, or 25 %, and may pose a threat to the sector, which expects more than four million tourists this year. Avtur rose from RD$119.92 to RD$150.08 per gallon.

Their situation took a turn for the worse with higher costs, intermediation profit margins, low spending in ads for the destination in foreign markets, and talk of new airport fees.

Puntacana Group president Frank Rainieri calls the panorama discouraging amid a crisis which might’ve been an economic opportunity for Dominican Republic.

He said tax revenue from avtur sales to planes that touch Dominican soil will tumble this year, resulting from higher internal prices. He added that taxes here are much higher compared with the other competitor countries ion.

Rainieri cites the nearest cases: Mexico, Cuba, Jamaica, Puerto Rico and some Caribbean islands, where he affirms airlines prefer to buy fuels.

He cautioned that if the corrective measures aren’t taken, the country may lose out on the arrival of as many as 800,000 tourists for the rest of the year, with income as high as US$900 million additionally, since more than 20 million tourists who frequent North Africa, its recent upheaval will force them to look to other destinations.

Source: Dominican Today

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