Tourism December 15, 2023 | 4:49 pm

Dominican tourism sector shows strong growth and banking confidence

Santo Domingo.- Alejandro Fernández, the Superintendent of Banks, highlighted the substantial growth and banking confidence in the Dominican Republic’s tourism sector. According to Fernández, tourism now contributes 7.1% to the country’s gross domestic product (GDP). He noted a significant increase in the credit portfolio for tourism in the Dominican financial system, rising by 39% from RD$67 billion in 2020 to RD$93.6 billion in 2023.

The tourism sector’s portfolio has represented over 30% of the net assets of commercial banks from January 2016 to September 2023. In September 2023 alone, this figure reached 33%. The impact of the COVID-19 pandemic had previously reduced tourism’s GDP contribution to 2.6% in 2020, its lowest point since 2016. However, the sector has shown a remarkable recovery in 2023.

Fernández also reported that a significant portion of tourism credit, 86.9%, is in U.S. dollars. From January to September of this year, the amount increased from US$1 billion to US$1.6 billion, accounting for 30% of private sector credit in foreign currency.

The banking sector’s confidence in tourism is evident in the consistently lower interest rates for the sector compared to the rest of the commercial sector. Interest rates for tourism loans in dollars have ranged from 5% to 7.4% over the last seven years, while rates for the wider commercial sector have varied between 8% and 10.5%.

Furthermore, the delinquency rate in the tourism sector’s portfolio has been remarkably low, fluctuating between 0.5% and 0.14% over the past seven years. In contrast, the delinquency rate for the rest of the economy has been between 2% and 1.3%.

Fernández shared this data during his presentation at the Tourism Investment Forum organized by the Hotel and Tourism Association of the Dominican Republic (Asonahores) at the Convention Center of the Ministry of Foreign Affairs.

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