Exclusive interview with Frank Rafael Rainieri Marranzini, president, CEO and founder of Puntacana Group S.A.
As a preamble, how has the evolution of the destination that you founded in 1969 been until its current formation as the Puntacana Group, with a well-positioned brand, and what attributes have distinguished it?
Undoubtedly, from our beginnings to the present it has been a continuous march of small achievements, we have worked unhurriedly, but without pause, from that first small hotel with just 20 rooms that we opened in 1971; later, in 1981, the Club Mediterranée Punta Cana came into operation as a partnership between that hotel chain and CODETREISA, the name of the current Puntacana Group at that time.
Then, in 1983, we opened the Punta Cana International Airport, which was what allowed us to take a breather. Many people believe that the day after the airport opened we were already a destination, and that was not the case, it took us many years to become a profitable company.
In 1987, we opened the Puntacana Yatch Club; as of that moment, the deployment of hotels in the area began, led by the Barceló chain, which opened the first in 1985, followed by Meliá, RIU and others; therefore, it was a stairway that has been climbing little by little and that, thank God, has reached where we are today: the most important tourist destination in the Insular Caribbean, which exceeds 40,000 hotel rooms and welcomes more than four million tourists a year.
What has been important from the beginning? Our Corporate Business Name. In 1971, we established the first school in the area, because there were no schools, with capacity for 12 children, which we later converted into a slightly larger one, for 60 children; likewise, we undertook vaccination plans for the residents because health services did not exist there.
In 1983, we began to implement environmental protection initiatives, such as the tree preservation programs that became other much more ambitious ones, and today social and environmental responsibility is one of the central points of the development of the Puntacana Group.
We can list dozens of projects to help the most vulnerable communities in aspects of health, education, housing, sports and culture, among which I can mention the Oscar de la Renta Pediatric Care Center, the Puntacana Child Diversity Center and the Punta Cana-Verón Center Against Blindness; the Ciudad Caracolí housing project, the Verón Polyclinic, the Ann & Ted Kheel Polytechnic and those focused on preserving the environment. Among the latter, those of sewage, coral planting, vermiculture, zero discharge, protection of endemic species such as the Gavilán de la Hispaniola, and dozens of programs that I don’t think I can list in an interview of this type, but I would invite readers to visit Puntacana Resort & Club, to get to know the Puntacana Group Foundation and book a tour through our hotels and/or website to learn about all our social and environmental developments.
The corporate social principle of the Puntacana Group has been the essence of our raison d’être, both for the Kheel Family and for the Rainieri Family: social and environmental responsibility has been and will always be of vital importance, and not now, but from the beginning, and not only in favor of the Puntacana Group. Both families, from the start, agreed to build a company that would not simply produce money for the partners, but would be an entity of social, economic and environmental development, both for the company and for the surrounding communities.
That is why we have been involved in these tasks for 51 years; the contributions made and projects in this regard go back to the origins and the environment, to the 1980s: it is part of our DNA and we will continue to be so, God permitting, for many more years.
What participation does the Group represent in the country’s tourism, in terms of the volume of visitors and income?
I want to separate this, because although it is true that the Puntacana Group has part of the responsibility, I always like to talk about the tourist area and not specifically about us, and the area, without a doubt, represented 57% of all tourists arriving in the country before the pandemic.
But, in addition, it is much higher, since the average stay in this region is, for example, double that in the city of Santo Domingo or in other regions of the country, and the rates are also higher, therefore, we could say that its economic impact must be around 70%, which means about four billion dollars of tourist income for the economy of the Dominican Republic.
The Dominican Republic has endeavored to revitalize its tourism industry, under the premise of consolidating itself as the safest destination in the Caribbean, for which purpose it launched the Responsible Tourism Recovery Plan and the Tourism Sector National Protocol for Health Risk Management against COVID-19, how is the implementation of the designed strategy going?
The implementation is going very well, because the Ministry of Tourism, instead of making an individual plan, invited the private sector, led by the associations of Hotels and Tourism of the Dominican Republic (ASONAHORES) and Hotels of the East (ASOLESTE), to actively participate in the design of these programs. In other words, they were not designed solely by the Ministry, but it was a joint effort, so, naturally, it has flowed without major setbacks; there are always differences or opinions, but that is not what worries us, the important thing is that we are all closely observing that the protocols are strictly applied in the sector, which has allowed people to talk about the Dominican Republic and Punta Cana as a safe country and destinations to travel.
I must also acknowledge the initiative of the Banreservas Reserve Bank, to insure the traveler during their stay in the country and, if infected with COVID-19, to cover hospitalization costs: it has been a message of tranquility that has led many people to be motivated to come to the Dominican Republic.
To this is added the vaccination process, which has had the full support of hoteliers in the tourist area, and I must highlight the immediate support of the business sector; several companies, including the Puntacana Group, felt committed to the vaccination program and collaborated with financial resources for the acquisition of vaccines in support of the Dominican State.
Similarly, it collaborated through the National Council of Private Companies (CONEP) to supply hospitals in the La Altagracia province with equipment and medical supplies to combat COVID-19. In particular, the Puntacana Group, in addition to assistance through CONEP or directly with the government, also created the La Altagracia Plan, through which we donate ventilators, masks, protective equipment for medical personnel, expendable material to equip public hospitals and some private hospitals that lacked the necessary equipment and resources in the months of crisis. Meanwhile, we implement a food program to distribute 45,000 boxes of food for families of five that would cover a week of food in that province, from Higüey to Verón. We also participate with mobile telemedicine units and cooperated with the hotel association and the Tourist Safety Specialized Corps (CESTUR), in hot food programs; in short, we have continuously worked with the purpose of contributing and helping the most vulnerable communities during these difficult times.
Currently, in order to support the State’s vaccination program, we have given a space in Terminal B of the Punta Cana International Airport to install 20 simultaneous vaccination stations; in turn, we support operational logistics with more than 100 volunteer collaborators in the daily operations, in aid of the Ministry of Public Health, the Dominican Red Cross and the neighborhood council.
We have also provided ambulances, cold rooms, medical supplies such as alcohol and cotton, medical support staff, food and accommodation for the Ministry’s medical team, which has enabled more than 2,000 individuals to be vaccinated daily in an agile, organized and safe manner, making it one of the vaccination posts that assimilates the most people per day—an individual is normally vaccinated in about 15 minutes. This fast and efficient process is due to the fact that the air terminal lends itself to it and we have highly trained professionals.
According to the forecasts of international tourist arrivals to the Dominican Republic, as of when is the reactivation of tourism in that destination expected to take off?
I don’t want to be a fortune teller since I failed on one occasion, because last summer I thought that recovery was coming for the Christmas season, but we did not imagine that in the world there would be a second and a third wave, and that this would make it difficult to take off. Today things are clearer due to the vaccination and that’s why it is so important that we get immunized in the phase that corresponds to us.
Also, President Biden already has, thank God, a vaccination policy that, in my personal opinion, is correct; in the United States, two million people are being vaccinated daily and by May its entire population will be immunized, which guarantees that those who have the second dose of the vaccine can travel. The U.S. market is the largest and represents 40% of the tourists that come to the country. Naturally, if we can recover that market with 40% of what we had before, we will be much better than the 20% we have today, it would be double, and that would reactivate the economy of the area and the country; in addition, we have to remember that right now Americans would not travel to distant destinations such as Europe, Asia, Turkey, which are countries that receive millions of Americans a year, nor would they be vacationing on cruise ships, which could indicate that, as of July, instead of having the same number of U.S. tourists as last year, we would get a much higher number, probably 15% to 20%, which indicates that we could reach 50% of the total number of tourists we had in August 2019.
If we add to that that England would already be vaccinated by May, this market could enter ours; by July, Europe will be at a level of more than 60% vaccination, and we also consider Canada. Therefore, we believe that as of July we should be above 50%, possibly 60% and, viewing it even more optimistically, up to 70% of what we received in July 2019.
In other words, I have faith and hope that God will help us and that this will be a reality; obviously, for this, we Dominicans must do our part, that is why we insist that the tourism sector, because it is in the frontline, should be treated as such and that all its actors are vaccinated as soon as we have enough vaccines available, since they work with visitors and that would guarantee a greater flow of tourists to the destinations.
The tourism sector, which does not make up a large part of the population, could be included in the first phases; we believe that we must make the effort to get vaccinated and follow the established biosafety protocols so that there are no outbreaks in the tourist area and achieve the growth of visitors that we project in the area and its impact on the national economy.
In the current circumstances of restrictions on air operations, how has the destination managed to guarantee the connections to support the resuscitation of the flow of passengers?
The Ministry of Tourism, the Association of Airports of the Dominican Republic and ASONAHORES have worked together to reactivate markets and make sure they understand what the country’s position is regarding COVID-19, the low index, the low occupancy rate of the beds in major hospitals, the low mortality rate, and so on.
It is worth noting that the strict compliance with the protocols helped the Punta Cana Airport to be recognized by the Airports Council International (ACI) in first place in the world, for having the best hygiene measures implemented by region for the prevention of COVID-19. The airlines know it and it gives them confidence that we are evaluated in first place—not only in the Dominican Republic and Latin America—, since it confirms that the protocols are being applied well; people feel confident and tourists have no reason to worry when passing through the airport. Likewise, we are coordinating with the airline companies so that as the borders are opened, more routes and flights will be reincorporated, and thus air traffic will increase significantly.
We have worked closely with the unions of drivers that provide services at the airport and of carriers; many of them have even been vaccinated because they are the people in the frontline, those who have contact with travelers who come from five continents and who can bring with them any type of virus (COVID-19 in its different variants). Therefore, it is a staff that must be included, like teachers or anyone else, in the frontline of defense. They are very conscientious workers and have been great collaborators in this stage.
Has the Dominican Republic, in particular Punta Cana, projected reformulations of its product portfolio in accordance with the new demands due to the situation left by COVID-19?
Each hotelier is working on this individually, but definitely what we have seen is a total movement towards low density, which in this area is not a problem: more toward outdoor sports and not to closed-in areas.
In this strip we do not have problems in that regard either, because we are characterized by low density and there are no great heights, which favors that people feel confident about visiting us and enjoying the wide outdoor areas that we have and to be in contact with nature. They can cycle or walk around the property, do water sports, go diving, play golf, tennis, and more. Vis à vis what the discos and bars used to be. Not to say that there are not people who do not want to participate in those entertainments, but the trend right now is more towards low density and eco-tourism.
Young people, obviously, we see them in Miami and other places: young people aged between 18 and 28 who are still looking for the crowded places, but it is just one segment of tourism, and it is not the largest segment that comes to Punta Cana.
Do you consider that the effects of the pandemic modify in any way the participation of Spain as an investor in the Dominican Republic’s tourism?
I have been an optimist by tradition, and I am a believer that after the pandemic there will be a tourist boom in some parts of the world and, naturally, Punta Cana is positioned as one of those places where we firmly believe that 2022 is going to be a year of a major boom.
It must be understood that the world hotel industry has been hit; many of our hotels are closed, we have lost a lot of money, but I presume that the large Spanish hoteliers are aware that in the properties they own in the Dominican Republic, being of low density, it is easy to comply with the protocols and there are all the medical support conditions. We have large private hospitals that are going to be at the center of a restart of companies that have suffered greatly.
Therefore, I believe that investments will be reactivated quickly, as soon as three or four months of growth have elapsed; I believe that by the end of the year many of the projects that were in the pipeline will start, some of those that had been timidly started will be reactivated and that, by the winter of 2022, we will have growth.
Therefore, I assume that the Punta Cana destination will continue to be important for national and foreign investors and, in addition, of great growth for the U.S. market; if we add the possibility that in 2022 preclearance [Customs and Border Protection Preclearance process] will already be implemented, which would add an important segment of the U.S. market and would put us in a much more competitive position than we have today, then we would say that we guarantee the growth of the tourism industry in the Dominican Republic and in particular Punta Cana.
What will this destination present at FITUR 2021?
I think that FITUR 2021 is more essentially a reunion after isolation, except for the virtual one, but that obviously it is not the same as what FITUR has been traditionally. FITUR is the social fair, where we talk, go to restaurants, try a good manchego cheese, a good wine or a good jabugo ham, and where we talk about the perspectives of the industry.
This occasion is a great reunion after more than a year because it was the last important fair that was held in January 2020 and now we have to talk about the protocols, the need for a travel passport that simply guarantees that you have both vaccine doses, the safest destinations, open areas and the reduction of polluting sources.
In other words, I think it is a little different, but it is a great first step, although at the moment Europe is not yet fully open, but it is the initial step to exchange about what we have, how we can come to an agreement, how to promote the industry and to which parts of the world.
Do you want to refer to any other aspect?
I think these questions have covered practically everything, but the most important thing for me is to remind people that 51 years ago there was nothing here, and in the Dominican Republic nobody believed in tourism. However, little by little this destination was created, which has become the most important in the Insular Caribbean, hence “relaunching” it now is not a big problem.
We have the infrastructure, the experience and the airport that connects us with all the countries of the world; the name Punta Cana is known throughout the world, and if we add preclearance to that, then we have no reason to doubt that our relaunch will be a great success, and we will soon be exceeding the numbers we have achieved in recent years.