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Market Brief
The Hospitality Sector
in the Dominican Republic

AUGUST 2004

prepared by Regis Batista
DoIT, Canadian Embassy in the Dominican Republic
regis.batista@international.gc.ca
www.santodomingo.gc.ca

The Dominican Republic is an increasingly popular holiday destination for European and North American travelers. The tourism sector is now one of the country’s most important industries. Traditional guests often seek familiar foods while sampling island specialities.


Quick Facts

  • Population / growth rate - 8.8 million / 1.3% (2000-2015)
  • Age Structure (2003) - 0-14 yrs: 33.6%
    15-64 yrs: 61.2%
    65 yrs & over 5.2%
  • Urban population- 4.8 million
  • Urban centers - Santo Domingo & Santiago
  • Dominicans residing abroad - 1 million
  • Language - Spanish
  • Unemployment rate - 14.5%
  • Total area - 48,730 sq km
  • Annual tourist visitors - 2.8 million

Economy

From 1998 to 2002 the Dominican Republic was the fastest growing economy in the Caribbean. In 2003 the country experienced a sever slowdown due to problems in the banking sector. The slowdown hurt consumer confidence and purchasing power, devalued the Peso, resulting in negative GDP growth rates and shrinking per capita GDP. However, the slowdown is expected to be over by 2005 due to the economies strong fundamentals and an International Monetary Fund agreement tied to fiscal and economic reforms. While domestic consumers may not present many opportunities for Canadian exports, growth in tourism has more than made up for the decline in domestic consumption.

  • GDP US$21 billion (2002)
  • GDP growth 4.1% (2002), -3.2% (2003)
  • GDP per capita (2002) US$2,386 (Figure may be considerably lower due to Peso devaluation)

Market Highlights

  • US$1 billion in agricultural imports in 2002
  • Estimated size of the food and beverage market in Hospitality sector: US$320 million
  • 2.8 million tourists in 2003.
  • 80% of hotels are resort style all-inclusive
  • Over 60,000 hotel rooms on the Island
  • Average occupancy rate in 2003 was 83%

Opportunities

  • 90% of resort guests familiar with western styled foods (European and North American in origin)
  • Resorts increasingly seen as an alternative to overseas holidays by Dominicans.
  • Growing number of international high-end restaurants/bars coupled with a very active nightlife (bars/pubs)
  • Tourist industry has created growing demand for imports of meat, seafood, potatoes (fries), beverages and dairy products.
  • Nearly half a million Canadian visitors annually may represent a captive market for Canadian products
  • Major Hospitality and restaurant industry trade show in August-September (ASONAHORES)

Key Players

  • The Dominican Republic has a solid and experienced agri-food industry, consisting of beverage bottlers, food processors (including wheat, vegetables and fruits, and dairy products), edible oils, meats and alcoholic beverages (especially rum and beer).
  • The Dominican agricultural sector supplies roughly 70% of the countries demand for unprocessed produce, fruits and vegetables.
  • Domestic and regional producers beginning to focus on the needs of the Hospitality Industry and adapting to them.
  • Increased competition from domestic suppliers due to increasing levels of quality.
  • American companies and products are very well represented in this market. Norway dominates seafood imports with a 40% share of the market.
  • The US has signed a free trade agreement with the Dominican Republic which large scale implications for the domestic industry as well as competing importers. US products already represent about 70-75% of all agri-food imports in the and once their products can enter the country duty-free, this percentage is almost certainly going to increase. However, Canada is currently negotiating an FTA with the Dominican Republic. Preliminary talks have already taken place, but it is believed that future negotiations will hinge on how the local industries and producers see what effect the US FTA has on their industry. For more information on the negotiations visit: www.dfait-maeci.gc.ca/tna-nac/dr-en.asp

Customers

  • 2.8 million tourist visitors in 2003, 3.3 million estimated for 2004.
  • Tourist composition: 45% European, 46% North American including 400,000 Canadians
  • Tourist Arrivals 2003 (by airport): Punta Cana 1.3 million visitors, Santo Domingo 606,000, Puerto Plata 512,000, La Romana 248,000.
  • Average stay 10 nights with daily expenses of roughly US$100.00
  • Among domestic / non tourist population the trend is towards eating out. A slowdown in 2003 and 2004 is viewed as a temporary side effect of 2003 financial problems.
  • Domestic population is very receptive to new / imported foods and international style foods are common
  • Increased amount of semi-processed imports to reduce import costs.

Market Entry Considerations

  • Best way to sell is through local intermediaries
  • On-site representation / agents are recommended to capitalize on opportunities.
  • In the food service segment, business hotels and upscale restaurants source the majority of their food products from importers and distributors, while most major resorts source products from local distributors, as well as importing directly through central buying operations.
  • Imports of rice, beans, garlic, powdered milk, sugar, onions, corn and unprocessed chicken are subject to tariff rate quotas and require government permits.
  • Unless otherwise indicated, the Dominican Republic tends to follow U.S. standards concerning chemical tolerances in foods, packaging and labeling requirements.
  • For more information on Market entry requirements please visit: “Import Regulations - Dominican Republic” http://www.infoexport.gc.ca

Trade

  • s severely hurt by financial crisis in 2003.
  • Imports in 2003 US$7.9 billion / Exports in 2003 US$5.5 billion
  • US dominates both import and export market, especially in agri-food products. Canadian seafood is well-known, although facing strong competition from Norway and Chile
  • In 2002, total agricultural and agri-food imports reached approximately $1.14 billion.
  • A large portion of agricultural imports is composed of bulk agricultural commodities such as wheat, corn, soybean meal and tobacco. However, intermediate agricultural products a
  • Import market ware beginning to represent a larger share of total imports.

Total Canadian exports & Agri-Food exports to the Dominican Republic

  • 2003 Total bi-lateral trade $199.6 million
  • Canadian exports to the Dominican Republic were valued $85.8 million in 2003, down over $40 million from 2002. Exports dominated by paper products, agricultural goods, automobile parts and electrical equipment.
  • Agricultural exports were valued at $24.6 million in 2003, a slight decrease over 2002. Dried fish, wheat, vegetables, dried beans, potatoes and cereal groats where the largest exports to the Dominican Republic in 2003 accounting for almost 85% of total agri-food exports.
  • Bulk agri-food exports were valued at $10.9 million in 2003, a $5 million increase over 2002, due entirely to an increase in wheat exports.
  • Intermediate agri-food exports were valued at $10.6 million in 2003, a $6 million decrease from 2002, due largely to an end to malt exports, and a large decline in milk powder exports. However, 2003 saw a 46 million increase in dried bean exports.
  • Consumer agri-food exports were valued at $3 million in 2003. This represented a $1.7 million decrease over 2002, due in large part to a sharp drop in fresh grape and apple exports. However, potato exports doubled in 2003.

Major Hotel Chains in the Dominican Republic

  • Barceló Hotels (9 hotels 2,900 rooms)
  • RIU (7 hotels 4,000 rooms)
  • Occidentals / Allegro Hotels (9 hotels 2,800 rooms)
  • Iberostar (4hotels 1,900 rooms)
  • Fiesta Hotels (2 hotels 1,300 rooms)
  • Meliá (5 hotels 2,300 rooms)
  • AMHSA Hotels (5 hotels 1,500 rooms)
  • Casa Marina (5 hotels 1,400 rooms)
  • Breezes (2 hotels 1,200 rooms)
  • Viva Resorts (3 hotels 1,000 rooms)
  • Coral by Hilton (4 hotels 2,000 rooms)
  • EMI Resort (1 hotel 300 rooms) Canadian owned

Major Restaurant Chains and Institutional Food Service

  • Slowdown in fast food chain franchises
  • Trend of eating out slowed in 2003
  • Major chains operate on average 15 outlets
  • Main imports: fries, cheese, meat, vegetables, processed chicken
  • International franchises present: Tony Romas, Outback, Fridays, Pizza Hut, Burger King, McDonalds, Yogen Fruz, Hagen Daaz.
  • Institutional foodservice focuses on cheap/affordable meals
  • most popular for everyday eating
  • serve traditional styled dishes: rice, beans, plantain, eggs, salami.
  • Food costs must be low. Average price of dish US$1.00 - $1.50

Canadian Contacts

Canadian Embassy in the Dominican Republic
Capitán Eugenio de Marchena, No. 39
La Esperilla, Santo Domingo
Dominican Republic

Mailing address:
P.O. Box 2054
Santo Domingo, Dominican Republic
Contact: Regis Batista-Lemaire,

Commercial Officer
Tel.: (809) 685-1136, ext. 3352
Fax: (809) 682-2691
E-mail: regis.batista@dfait-maeci.gc.ca
Internet: http://www.santodomingo.gc.ca

Agriculture and Agri-Food Canada
Sir John Carling Building
930 Carling Ave.
Ottawa, ON K1A 0C5
Contact: Mélanie Spenard, Senior International Market Development Officer
Tel.: (613) 759-7739
Fax: (613) 759-7506
E-mail: spenardm@agr.gc.ca
Internet: http://www.agr.gc.ca

Canadian Food Exporters Association
885 Don Mills Rd, Suite 301
Don Mills, ON M3C 1V9
Tel.: (888) 227-8848 or (416) 445-3747
Fax: (416) 510-8044/8043
E-mail: info@cfea.com
Internet: http://www.cfea.com

Canadian Food Inspection Agency
59 Camelot Dr.
Ottawa, ON K1A 0Y9
Tel.: (613) 225-2342
Fax: (613) 228-6125
E-mail: cfiamaster@inspection.gc.ca
Internet: http://www.inspection.gc.ca

Food and Consumer Products Manufacturers of Canada
885 Don Mills Rd, Suite 301
Toronto, ON M3C 1V9
Tel.: (416) 510-8024
Fax: (416) 510-8043
E-mail: info@fcpmc.com
Internet: http://www.fcpmc.com

International Trade Canada (ITCan)
125 Sussex Dr.
Ottawa, ON K1A 0G2
Internet: http://www.itcan-cican.gc.ca

Caribbean & Central America Division (LCR)
Contact: Rosie Zolla, Trade Commissioner
Tel.: (613) 943-8807
Fax: (613) 944-0760
E-mail: rosie.zolla@dfait-maeci.gc.ca

International Business Opportunities Centre
(IBOC)
Tel.: (613) 944-6000
Fax: (613) 996-2635
E-mail: iboc@dfait-maeci.gc.ca
Internet: http://www.iboc.gc.ca

Market Support Division (TMM)
Contact: Clément Côté, Trade Commissioner
Tel.: (613) 995-1773
Fax: (613) 943-1103
E-mail: clement.cote@dfait-maeci.gc.ca


Dominican Republic Contacts

Embassy of the Dominican Republic in Canada
130 Albert St., Suite 418
Ottawa, ON K1P 5G4
Contact: Renso Herrera
Tel.: (613) 569-9893
Fax: (613) 569-8673
Internet: http://www.drembassy.org/english

Association of Hotels and Restaurants, Inc.
(ASONAHORES)
Edificio Cumbre, 8 Piso, Plaza Naco
Santo Domingo, Dominican Republic
Contact: Arturo Villanueva,

Executive Vice President
Tel.: (809) 540-4676
Fax: (809) 687-4727
E-mail: asonahores@codetel.net.do

Industry and Commerce Secretariat
Ed. Gubernamental J.P. Duarte, 1er. Piso
Av. Mexico esq. Leopoldo Navarro
Santo Domingo, Dominican Republic
Tel.: (809) 689-6064

Secretariat of Agriculture
Autopista Duarte Km. 6 ½, Jardines del Norte
Santo Domingo, Dominican Republic
Contact: Dr. Marcelino Vargas, Director
Tel.: (809) 547-3888, ext. 2236, 683-3845
Fax: (809) 547-1136

National Commission for Livestock Production
(CONAPROPE)
Edificio B, Feria Ganadera,
Avenida George Washington
Santo Domingo, Dominican Republic
Contact: Dr. Gustavo A. Meyreles, Director
Tel.: (809) 535-6866
Fax: (809) 227-1268

Norms and Standards Directory (DIGENOR)
Edificio Oficinas Gubernamentales, 11th Floor
Avenida Mexico
Santo Domingo, Dominican Republic
Tel.: (809) 682-2205/06/07
Fax: (809) 688-3843
E-mail: digenor@codetel.net.do

Plant Health Division (Phytosanitary Control)
Autopista Duarte Km. 6 ½, Jardines del Norte
Santo Domingo, Dominican Republic
Contact: Isidro Tavarez
Tel.: (809) 547-3888, ext. 3786
Fax: (809) 227-1268

Secretariat of Public Health Secretariat
(SESPAS)
Quality Control and Risks for Food and Beverages
Avenida San Cristobal, Esquina Avenida Tiradentes
Santo Domingo, Dominican Republic
Contact: Dr. Rafael Tobias Castellanos
Tel.: (809) 431-3121, ext. 2204
Fax: (809) 544-2083


Useful Internet Sites

Date Modified: 2004-08-27 Important Notices