With a massive $72 billion debt, Puerto Rico is in a serious financial crisis. The U.S. territory, says Puerto Rico Governor Alejandro García Padilla, says those debts are "not payable" and are forcing the commonwealth into "a death spiral" that only some form of non-payment or assistance can help.
To get out of its current crisis, Puerto needs the U.S. government to change the bankruptcy code so that Puerto Rican municipalities can file for Chapter 9 bankruptcy. If the U.S. territory doesn't pay back its debts, however, Puerto Rico's creditors can sue. If they do, they can have federal courts order that bondholders be paid ahead of police, firefighters, pensioners, and other public services in the commonwealth.
So, what kind of an impact is this having on Puerto Rico's tourism industry, specifically, when it comes to meetings and incentives? We spoke to Milton Segarra, president and CEO of Meet Puerto Rico, to find out.
"As of today [July 6], the impact has been nothing," said Segarra. "What could happen in the future is what we're trying to address now - to avoid any complications. We want to be available for meeting planners' concerns and questions, and educate them on what's happening."
Segarra said that while the current economic situation is a challenge for the central government, the commonwealth's tourism industry is still going strong. Segarra noted that Meet Puerto Rico saw a very strong fourth quarter, surpassing its booking goals and estimating that the economic impact of meetings, conventions, incentives, and exhibitions will surpass $100 million for the destination.
"Year over year, our group occupancy has grown," he said. "Year over the year, the number of new hotel investments grows. As we speak, there is more than $190 million being invested by hotels and financial investors. A convention center district property by Hyatt opened 6 months ago, and a new one, to be located in front of the convention center, is expected to open in another year or so. Marriott, Hilton and other brands have enhanced the products that they have and enhanced the services. That's happening across the island and across the board. The trust and expectations of the players in the [tourism and hospitality] industry are very positive."
Regardless of the growing strength of the tourism and hospitality industry in Puerto Rico, especially in terms of meetings and incentives, Segarra still believes planners' concerns, if any, are valid. "If I were a planner, I'd be asking the same things."
He added, "There is no foreseeable disruption in services. We will make sure the center is fully operationable. All of our tourists and visitors are here. Utilities are here. Everything is there. It's a shame that the economic crisis has a spillover effect, but the fact of the matter is that the [hospitality] industry is solid."
The key to making sure the group market stays strong in Puerto Rico, Segarra said, involves communicating with planners. "Once we explain to a planner what's encompassed in this financial crisis, they will understand and will keep their groups coming to Puerto Rico as a group destination," he says.
When asked if heavy investments in the commonwealth's tourism industry, including the construction of the convention center, may have contributed to the current financial situation, Segarra said that the projects highlight the causes for the current crisis, but that the financial impact of projects like the center has been immeasurable.
"Certain facilities like the convention center were built through bonds that were issued back in 2003 and 2004," Segarra said. "But the amount of economic impact that the center has brought to Puerto Rico is nothing to compare with to the current financial situation. It was the right decision to build it … it's right that debt issues to construct the convention center has been downgraded, but the impact of that structure to our industry has been to advance all that we've been able to accomplish in the meetings and events industry. It was necessary to position Puerto Rico as the preferred groups and conventions destination in the Caribbean."
Segarra stressed that Meet Puerto Rico is always available to help planners better understand the current situation, and to act as a resource.
"We can be the liaisons to connect those travel professionals with economists, government officials, and other hotel providers so they know firsthand what it's all about," Segarra said. "If there is any planner who's reading this particular article that has any doubt, please call us. We'll tell you all the information."
For general information on meetings, incentives, conventions, and exhibitions in Puerto Rico, planners are encouraged to visit www.meetpuertorico.com
. For specific questions regarding the current economic crisis, Meet Puerto Rico suggests you contact Joyce M. Martinez, VP, Business Development & Sales directly at firstname.lastname@example.org and (214) 856-3810.