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Amid Pandemic, Puerto Rican Tourism Manages a Banner Year

Amid Pandemic, Puerto Rican Tourism Manages a Banner Year

While most of the travel market is still reeling from the Covid pandemic, Puerto Rico has found opportunity amid disaster: wooing tourists barred from more exotic destinations.

Passenger arrivals during the first 11 months of 2021 were at their highest since 2015, lodging revenue has surpassed $1 billion for the first time and the government has pulled in more than $80.4 million in tourism-related taxes. That’s up 16% versus 2019, and more than double the 2020 figure, according to Discover Puerto Rico, its marketing organization.

Amid Pandemic, Puerto Rican Tourism Manages a Banner Year

The tax inflows, in particular, are critical to the U.S. territory, which is renegotiating its record-setting debt and will have to resume making millions in bond payments as soon as next year. 

“For an island emerging out of bankruptcy, it’s a big deal to have that kind of tax revenue,” said Brad Dean, head of Discover Puerto Rico. “It’s a huge shift that’s bringing money right into the government coffers.”

Despite being home to colonial architecture, powdery beaches and the only U.S. tropical rain forest, Puerto Rico’s tourism industry hasn’t been a powerhouse. By most accounts, it represents about 6% to 7% of the economy. 

That’s changing as the pandemic has forced fun-starved mainlanders to cancel international travel and look closer to home. (Unlike other Caribbean destinations, Puerto Rico is a domestic flight -- no passport or Covid testing required to get back to the mainland.)

In October, the U.S. Travel Association reported that eight states and territories were seeing visitor spending above 2019 levels; none had seen a bigger jump than Puerto Rico.

Amid Pandemic, Puerto Rican Tourism Manages a Banner Year

The island is hoping to further capture the zeitgeist when Puerto Rico is featured on ABC’s broadcast of “Dick Clark’s New Year’s Rockin’ Eve With Ryan Seacrest 2022.” The local government is using $4.4 million in American Rescue Plan Act funds to cover its portion of the televised spectacle, which will include a party in San Juan and a show by rapper Daddy Yankee.

Governor Pedro Pierluisi said the investment has already paid for itself through free advertising and that the broadcast will be a chance to tout the island’s status as the most vaccinated U.S. jurisdiction.

“We are going to let the world know that we are a safe place to visit,” Pierluisi said this week. “We have given a master class in how to fight Covid-19.”

Even so, some health officials question the wisdom of throwing a massive party just as the omicron variant is gaining a foothold.

As the island claws its way out of years of economic stagnation, it’s time to take tourism seriously, Dean said. Casual visits often lead to real money as people relocate, invest and study. Puerto Rico has become a hotbed for cryptocurrency and blockchain enthusiasts and has been a magnet for the remote-working crowd

“It’s a reminder to all of us that tourism is an economic development tool in the toolbox,” he said.

©2021 Bloomberg L.P.