Puerto Rico Primed For Hotel Investment, Partners With NYUSPS

NEW YORK—For more than 40 years, industry executives have flocked to the NYU International Hospitality Industry Investment Conference. But, for the first time, the government of Puerto Rico and the Puerto Rico Tourism Company served as platinum sponsors of the event, signaling to the hotel world that the unincorporated U.S. territory was primed to rebuild following the natural disasters that devastated it in 2017. Moreover, the NYU School of Professional Studies Jonathan M. Tisch Center of Hospitality will be furthering the relationship in the coming academic year.

“As the role of government and public policy is crucial to foster development in our industry, we are honored to be working with Puerto Rico and having the governor with us today,” Jonathan M. Tisch, chairman and CEO of Loews Hotels & Co, and co-chairman of the board and a member of the office of the president of Loews Corporation, said during a press conference at the event. “We certainly are all familiar with the devastation that Hurricanes Irma and Maria caused, and the long and difficult road to recovery. Travel and tourism are critical to that recovery and the island’s long-term well-being. We are pleased that through the conference we will be able to give Puerto Rico some visibility [to]support and invest in their future through the travel and tourism industry.”

The Honorable Ricardo Rosselló, governor of Puerto Rico, has ambitious plans. “Puerto Rico is on a path not only to recover, but to be the most exciting place to invest in our region,” he said, noting that the setbacks caused by the natural disasters have enabled the region to reinvent itself.

“As a strict policy priority, we are doubling down on hospitality and tourism,” he said, pointing out that Puerto Rico will get federal funds to rebuild. “A lot of those resources are going to harden our infrastructure to make sure we have a better, stronger energy grid and we can take things that were typically seen as liabilities and flip them into a positive.”

Additionally, Puerto Rico has strengthened its local toolkit. “We have established some of the most competitive incentives in our island…with tourism tax credits that now range from 30 to 40%, whereas in the past it was only a 10% credit,” Rossello said. “The toolkit at the local level is robust. There is a source of revenue for the rebuild, and there is the concept of opportunity zones that will make Puerto Rico the most competitive place to invest.”

Whereas most areas in the U.S. have smaller tracts that qualify for opportunity zone investment, Rossello said 96% of Puerto Rico qualifies. “This means we’re going to be able to make transactions that were otherwise not possible, and your return on investment could reach upwards 200%,” he said.

Puerto Rico currently has 15,000 hotel rooms, but its aspiration is to double that to 30,000 rooms—and those rooms won’t only be in traditional areas either. “Within our vision, we’re not only looking to bring more visitors to the island but enhance and lengthen their stay,” he said. “People associate it with beaches, and that is one of our attractions, but we’ve seen people are coming to Puerto Rico for our authenticity and culture. That can be extrapolated to places that today are not being seen as tourist destinations. The island is 100 miles by 35, so there is accessibility to all of those spots. Our objective is to showcase that experience, so you can have a menu of places, whether it’s the colonial settings in the south or in the mountainous regions; we have the longest ziplining efforts in the world, and we have some of the longest underground rivers and caves as well. We are developing a green tourism and green economy aspect that will allow us to reach some other areas of Puerto Rico.”

Puerto Rico is also tackling its problems—like pollution and crime—head on to make it a more inviting place. “We’ve just signed a bill and are moving forward with a commitment to reduce carbon emissions by 50% in the next five to seven years,” he said. “We are going to eliminate fuel generation by carbon—the statutes state by 2028, but we’re going to do it by 2020. Those things will help us out on that front. Crime has historically been something people have pointed out, but we have shown a significant decrease in crime and we’re making sure we have special districting of tourist areas to make sure are safe. There have been challenges in the past, but by identifying, measuring and tackling them strategically, we are providing results, and our expectation is moving forward five to ten years, we’re going to be able to have incredible results, leveraging what might have been a negative and flipping it into an attractive positive.”

In addition to this focus on hotel development, the government of Puerto Rico is partnering with NYU’s Tisch Center for an academic project. Nicolas Graf, associate dean, NYU School of Professional Studies Jonathan M. Tisch Center of Hospitality, said, “Experience is a huge component for the rich, educational experience we provide. Being able to apply theories you learn in the classroom to real world projects is something we value and makes us quite different. Puerto Rico is a great case study for how a destination bounces back after being devastated by natural disaster.”

In the upcoming academic year, NYU and Puerto Rico Tourism Company will be working on projects for the destination. “We will have groups of students engaged with the government officials and tourism executives on the island on field projects based upon opportunities and challenges,” he said. “The governor and his team will host a group of students in Puerto Rico and have committed their support to make this research experience.”

Graf noted that the university has applied research courses designed to accommodate different types of projects. “We haven’t identified all of the projects yet, but they will be related to destination development, destination marketing and developing an experience on the island,” he said.