The Dominican tourist industry grew tremendously during the 1970s and the 1980s, and by 1989 it boasted more than 18,000 hotel rooms--more than any other location in the Caribbean. Foreign-exchange earnings from tourism also multiplied dramatically, during the 1980s, from US$100 million in 1980 to US$570 million by 1987, or the equivalent of 80 percent of all merchandise exports. In 1984 tourism replaced sugar as the country's leading foreign-exchange earner, exemplifying the growing diversity of the Dominican economy. The number of tourists visiting the island increased from 278,000 in 1975 to 792,000 in 1985, and in 1987 the number of vacationers surpassed 1 million for the first time. This total surpassed those of traditional resort locations like Bermuda and Barbados, and it made the Dominican Republic the fifth largest earner of tourism dollars in the Caribbean, behind the Bahamas, Puerto Rico, Jamaica, and the United States Virgin Islands.
Government promotion of tourism did not begin in earnest until the passage in 1971 of the Tourist Incentive Law (Law 153). Law 153 created certain "tourist poles" to promote the industry's growth, and, more important, it provided investors in tourism a ten-year tax holiday and an exemption from tariffs on imports not available locally. The law also created a special arm of the central bank to co-finance new investments in the sector. In 1979 the administration of Silvestre Antonio Guzmán Fernández (1978- 82) elevated the director of the country's tourism development efforts to cabinet level, a further indication of official interest and commitment.
The Dominican Republic offered a number of attractions to tourists, not least among them, its bargain rates and liberal divorce laws. As a consequence of numerous devaluations of the peso in the 1980s, the country was the least expensive Caribbean resort. The republic also benefited from a general upswing in Caribbean tourism, in the 1980s, associated with the strong United States economy. Each year during the decade, the United States accounted for more than fifty percent of the visitors to the Dominican Republic. Other vacationers came mainly from Canada, Italy, Spain, West Germany, and the Scandinavian countries. As the island offered more "all-inclusive" package vacations to visitors, the average tourist expenditure and length of stay also increased, indicating the gradual maturation of the trade. Levels of hotel occupancy generally were very high, between 80 percent and 90 percent. Traditionally, the most popular resorts had been in La Romana, Puerto Plata, and Santo Domingo, but new beach hotels in the southwest, the east, and the north all promised to be major attractions in the future.
Despite its successes, the tourist industry was still relatively young, and it faced a series of problems related to its rapid growth. For example, inadequate supplies of clean water and electricity, combined with slow construction caused by shortages of materials, forced some vacationers to leave early because of unsuitable accommodations. Although workers were drawn by tourism's higher wages and the access that it provided to foreign currencies, the rapid development of the industry ensured that qualified labor continued to be in short supply. Tellingly, the industry's return rate for visitors was low, by Caribbean standards.
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