A roughly 18% increase in room inventory over the next three
years is skewed toward the higher end of the market.
DOMINICAN REPUBLIC – The Dominican Republic, long a top
Caribbean destination known for its value-oriented all-inclusive resorts, is in
the midst of a luxury room boom, with nearly 15,000 new accommodations expected
over the next three years, many in the upscale segment.
The roughly 18% increase in room inventory is skewed toward
the higher end of the market, said Michael Cummings, managing director for
valuation and advisory services at CBRE.
“The luxury segment is continuing to increase, with more
than 1,000 upscale rooms set to open just in Miches this year,” Cummings
said.
Miches, a relatively new tourism area located roughly 60
miles west of Punta Cana, has seen significant investment. Secrets, Dreams and
Zemi all-inclusives debuted in Miches earlier this year, each with 500
guestrooms. A Four Seasons luxury resort and residential complex spanning 60
acres along Playa Esmeralda is slated to open in 2027.
At the same time, the Dominican Republic’s flagship
destination, Punta Cana, is experiencing its own upscale push. Earlier this
year, Punta Cana welcomed the 200-room St. Regis Cap Cana and the 340-room W
Punta Cana, the W Hotels brand's first all-inclusive.
One of the biggest issues in Punta Cana right now is that [resort workers have to] travel hours to get to work and then hours to go back, or sometimes they need to live far from their families. We are going to give people the chance to live with their families very close to the property.
Daniel Adolfo Conte
Next year will bring the opening of Moon Palace The Grand
Punta Cana, a $1.5 billion luxury all-inclusive project with two 18-story
towers and 2,171 rooms. Daniel Adolfo Conte, vice president of commercial
relations at The Palace Company, said the Moon Palace will be the D.R.’s
largest single resort by room count.
“Our [plan] is to bring a complementary demand into the
island,” Conte said. “And bringing people who are used to properties like ours
in Cancun -- and that same level of service and ADR as well -- to Punta Cana.”
(Starting rates at Moon Palace The Grand Cancun hover around $700-$1000 per
night.)
Conte acknowledged, however, that delivering on luxury
service at that scale will require significant workforce investment. The Palace
Company is in the process of recruiting employees and is also implementing a
comprehensive training program. It is sending around 300 staff from Cancun to
work in Punta Cana and roughly 500 staff from the Dominican Republic to Mexico
to work and train before the opening.
“We really need to make sure we have the standard of
services we are offering in Cancun, and this is the best way to do it,” Conte
said.
The project also calls for the building of the Ciudad Palace
for hospitality workers, with 1,800 apartments, schools, a hospital and other
facilities that will eventually house and serve more than 12,000 people.
“One of the biggest issues in Punta Cana right now is that
[resort workers have to] travel hours to get to work and then hours to go back,
or sometimes they need to live far from their families,” Conte said. “We are
going to give people the chance to live with their families very close to the
property.”
Other brands are also planning premium expansion in Punta
Cana.
Nobu Hotels has announced plans to open the 200-room Nobu
Hotel Punta Cana, while Palladium Hotel Group is adding to its existing resort
complex in Punta Cana with the debut in December of two all-inclusive concepts:
the Grand Palladium Select Bavaro and the Family Selection at Grand Palladium
Select Bavaro.
Simon Suarez, vice president of Grupo Puntacana and a
director emeritus on the Caribbean Hotel and Tourism Association’s executive
committee, credited government investment in new areas of the country on
infrastructure, including roadways, water, sewer and electricity. “All the
elements that are important,” he said.
Signs of hotel softness
Despite the expansion, hotel performance metrics have shown
some softness, even as the D.R.’s 5 million international visitor arrivals from
January through August was up roughly 1% year over year.
If you look at cruise performance in terms of passenger volume and increases in rate, they have done phenomenally well. And I think there’s probably a siphoning off of the leisure, value-oriented traveler from hotel stay to cruise.
Jan Freitag
The country’s hotel and tourism association reported average
hotel occupancy of 77.7% for January through August 2025, down 1.5 percentage
points from the same period in 2024. August occupancy of 69.5% was down 3.7
points year over year.
CoStar data showed September occupancy had dipped to 49.3%
from 53.4% the prior year, and average daily rate (ADR) declined 5.5%, to
$167.92. While Jan Freitag, national director of hospitality analytics for
CoStar Group, characterized the decline as a potential blip related to calendar
shifts, he also said D.R. occupancy had declined for five consecutive months
through August, with ADR remaining flat at about $220.
Freitag pointed to cruise competition as a potential factor.
“If you look at cruise performance in terms of passenger
volume and increases in rate, they have done phenomenally well,” he said. “And
I think there’s probably a siphoning off of the leisure, value-oriented
traveler from hotel stay to cruise.”
Note: This story first appeared in Travel Weekly