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Puerto Rico’s tourism industry was stung by Zika. Could it happen in Miami?

A beach in Puerto Rico, where tourism is the top industry. In the Caribbean, and particularly Puerto Rico, Zika has doused the crucial tourism industry. The situation offers a window into what could happen in Miami, where tourism is also key, and where Zika is now locally-transmitted.
A beach in Puerto Rico, where tourism is the top industry. In the Caribbean, and particularly Puerto Rico, Zika has doused the crucial tourism industry. The situation offers a window into what could happen in Miami, where tourism is also key, and where Zika is now locally-transmitted.

As Puerto Rico remains crippled by a stubborn recession, tourism has been the sole bright spot, with visitorship and revenues up for the past three years.

Until February. Then came Zika.

Since the start of the year, the Caribbean has grappled with Zika-induced cancellations and shrinking visitor numbers and revenues — a serious economic loss in a region dependent on tourism.

Puerto Rico has suffered the most.

In February, Dr. Thomas Frieden, director for the U.S. Centers for Disease Control and Prevention, visited the island and issued a grim projection: As many as 700,000 people — or 20 percent of the population — could be infected with Zika by the end of the year, based on previous outbreaks of similar mosquito-borne illnesses such as chikungunya and dengue.

 

The number of cases turned out to be far less, but the number is growing. On Friday, the U.S. Department of Health and Human Services declared a public health emergency for Puerto Rico, making the territory eligible for increased levels of government support.

As of Friday, there were 10,690 confirmed cases of the virus among Puerto Rico’s 3.5 million population, according to the most recent statistics from the Puerto Rico Department of Health. The vast majority of cases were acquired locally.

The numbers in Puerto Rico are startling compared with the United States, which had 1,962 cases for the entire country as of Aug. 10, according to the CDC.

Following the CDC’s projections in February, Puerto Rico’s visitorship dropped significantly. In January, hotel registrations rose 10.9 percent over the previous year; in February, they were up only 1.3 percent, according to the Puerto Rico Tourism Company. By March, hotel registrations went negative, falling 1.6 percent over the previous year.

Between March and May, 35 groups canceled trips to the island planned for 2017 and 2018, including large city-wide conventions of 1,500 to 2,000 people. That resulted in the loss of 42,000 room nights, according to Meet Puerto Rico, the island’s meetings and convention promotion organization.

“In those first few months, it created a lot of fear,” said Clarisa Jiménez, president and CEO of the Puerto Rico Hotel and Tourism Association. “Using those projections were a little harmful. People were scared.”

Because Puerto Rico is a U.S. territory, its Zika troubles received heavy attention from media in the U.S., the island’s top market, Jiménez said. As the virus spread throughout the region, the negative press grew. Cases of Zika have been reported in 25 nations in the Caribbean, according to the CDC.

Puerto Rico is still on everyone’s mind as the place they want to stay away from because of the Zika. Is it on everybody’s mind? Definitely. Is it affecting travel to the Caribbean? Absolutely.

Olga Ramudo, president and CEO of Coral Gables-based Express Travel

Since spring, Puerto Rico has been working to make up the losses by offering price promotions months earlier than usual, training hoteliers and providing information about the virus to travelers.

While tourism experts on the island say Puerto Rico’s tourism industry is returning to pre-Zika levels, a recent rise in cases of the virus threatens to reverse the process.

A study released by the CDC last week found that the number of cases in Puerto Rico has risen steadily since April, growing eightfold between February and June, and warns that hundreds of infants could be born with microcephaly in the coming year.

“The prevalence of Zika virus infection in Puerto Rico is substantial and increasing,” the CDC said in its report.

Puerto Rico’s struggle offers a window into the risk to Miami-Dade’s $25 billion tourism industry as Zika shifts from a tag-along virus brought home by unsuspecting travelers to a home-grown threat.

A new kind of epidemic

The Caribbean isn’t a stranger to mosquito-borne illnesses. The region has weathered chikungunya, dengue and malaria. But the level of hysteria around Zika is striking a different pitch because it affects the most vulnerable population: newborns.

If contracted by pregnant women, particularly women in their first two trimesters, Zika could severely affect the development of a fetus, resulting in babies born with a smaller head, a brain that is not fully developed and a host of other issues.

“Where Zika differs [from other mosquito-borne illnesses the Caribbean has faced] is where it pertains to the ongoing ramifications,” said Beverly Nicholson-Doty, commissioner of tourism for the U.S. Virgin Islands. “That is an area that has a higher propensity for people being concerned — and rightfully so.”

That fear has added a new layer of difficulty in an otherwise routine regional challenge.

During the first quarter of the year, when Zika concerns skyrocketed, the U.S. Virgin Islands lost more than $250,000 in cancellations, Nicholson-Doty said. Most of those came from the region’s robust destination wedding business, which involves a high percentage of women of child-bearing age.

In reality, the number of cases in the U.S. Virgin Islands is relatively small. According to the CDC, only 22 have been reported. Of those, 21 were transmitted by local mosquitoes.

Very upscale resorts in the Caribbean had on their books very large wedding groups that were booking entire hotels, [that canceled], and that’s a big hit for a hotel.

Marie Dexter, co-founder and principal of Resort Development Consultants Inc.

Marie Dexter, co-founder and principal of Caribbean and Latin American hospitality consulting firm Resort Development Consultants Inc., said countries where leisure and wedding travel are major players have felt the sting of Zika most.

“Very upscale resorts in the Caribbean had on their books very large wedding groups that were booking entire hotels, [that canceled], and that’s a big hit for a hotel,” Dexter said.

In contrast, countries catering to older populations, such as Bonaire, the Cayman Islands and Grenada, have lost less business, Dexter said.

Overall tourist stop-over arrivals to the Cayman Islands dropped only slightly, by 1.4 percent, during the first six months of the year, according to the Caribbean Tourism Organization. The Dutch Caribbean, which includes Bonaire, saw an increase in visitation of 5.6 percent by the end of March, while Grenada’s arrivals during the first half of the year were up 7.6 percent.

Now, the region as a whole is beginning to move past the worst of the Zika scare, said Frank Comito, CEO and director general of the Caribbean Hotel & Tourism Association.

“While some properties have had some losses in the vulnerable age groups, there has been some compensation where we have seen some shifting of marketing strategies with additional efforts applied to attract older visitors, to appeal to other markets that would feel less vulnerable,” Comito said. “We are on pace to have a year equivalent.”

And equivalent isn’t bad, Comito said, especially when you’re on pace with a year like 2015, when the Caribbean outperformed every major tourism region in the world.

“Against a banner year you are down a couple of points, you’ve gone from having an excellent year to having a good year this year,” Comito said.

Even with Zika, the region predicts another strong year, with tourist arrivals up 4.5 to 5.5 percent in 2016, according to the Caribbean Tourism Organization.

10,690Number of confirmed Zika cases in Puerto Rico, according to the Puerto Rico Department of Health

Even the Dominican Republic, which recently made headlines as a top point of Zika contraction by American travelers, continues to do well. During the first six months of the year, the Dominican Republic saw a 6.5 percent increase in visitors, a record 3 million travelers. Growth is expected to continue.

At sea, 94 percent of cruise travelers said Zika won’t stop them from sailing, according to a recent poll run by online cruise publication Cruise Critic. Miami-based Royal Caribbean International and Doral-based Carnival Cruise Line said they haven’t seen a measurable impact from Zika. At Miami-based Norwegian Cruise Line Holdings, CEO Frank Del Rio said in an August 9 earnings call that Zika probably has had a negative impact on its business but had no way to measure the actual impact.

Home-grown threat

While the rest of the Caribbean breathes a sigh of relief, Puerto Rico is still holding its breath.

Even small signs of improvement aren’t enough to stop an aggressive Zika campaign — not yet.

“We don’t lower the volume, we continue upping the volume of sending the message out,” said Ingrid Rivera Rocafort, executive director of the Puerto Rico Tourism Company, the island’s official promotion agency.

That message: the island is aggressively combating Zika on a daily basis, and travelers can have a worry-free vacation in Puerto Rico — save for women in the at-risk group.

Hotels are giving out free repellent in their lobbies and spraying outdoor areas against mosquitoes every three months per CDC guidelines, Jiménez said. The Puerto Rico Hotel and Tourism Association is holding regular seminars with hoteliers on Zika preparedness.

The message seems to be getting through. Hotel occupancy is at about 71 percent, on par with 2015, and overall tourist arrivals between January and April were 2.8 percent higher than the same time last year.

71 percent Occupancy at Puerto Rico hotels so far in 2016, on par with 2015

Meanwhile, the battle against Zika continues.

August is the wettest and hottest month on the island, contributing to the recent spike in cases, Rivera Rocafort said. Workers have collected hundreds of thousands of tires — collection points for the standing water that breeds mosquitoes — but frequent rains quickly fill other receptacles. And a CDC-endorsed push for aerial spraying in July led to protests over an insecticide, called naled, that is toxic for bees, birds and fish. Gov. Alejandro García Padilla’s former adviser on the epidemic, Dr. Johnny Rullán, recently quit citing a vicious atmosphere, and plans to spray were suspended.

Traveler concerns haven’t yet abated.

Puerto Rico is still on everyone’s mind as the place they want to stay away from because of the Zika,” said travel agent Olga Ramudo, president and CEO of Coral Gables-based Express Travel. “Is it on everybody’s mind? Definitely. Is it affecting travel to the Caribbean? Absolutely.”

That concern is starting to spread to the mainland, as 28 cases of locally transmitted Zika have been found in South Florida as of Friday. Most were contracted in the popular Wynwood neighborhood.

In response, the CDC has issued an unprecedented travel warning within the U.S., advising pregnant women or women who wish to become pregnant to avoid visiting the one-square-mile area of Wynwood that is affected. (The CDC has also issued travel warnings to the two dozen countries in the Caribbean affected by Zika).

Public health officials in New York City, Britain, Canada, France and Germany have since issued similar advisories.

Our greatest concern is that the traveling public doesn’t have all the facts.

Rolando Aedo, chief marketing officer for the Greater Miami Convention & Visitors Bureau

The impact shows up in the numbers: Revenue per available room, a key measurement of industry success, was down 3.2 percent in Miami during the first week of August, according to Smith Travel Report.

But Rolando Aedo, chief marketing officer for the Greater Miami Convention & Visitors Bureau, said other factors may be at play, particularly a steep increase in room supply this year that has driven rates down throughout the year.

“Our greatest concern is that the traveling public doesn’t have all the facts,” Aedo said. “There are a lot of factors that have contributed to the pressure of hotel rate and occupancy.”

Revenue per available room is also down — and by greater margins — in the Florida Keys, Orlando and Fort Lauderdale, Aedo said, where Zika isn’t a major concern. Overall, Miami has seen a handful of cancellations but no significant impact on tourism caused by the virus, he said.

But in Wynwood, where the epidemic is having a Puerto Rico-esque moment, the effect is palpable. Restaurant patios are empty, tour buses are rerouting visitors and the streets, often packed with visitors looking to take photos in front of giant art murals, are noticeably less crowded.

Asked if he’s worried Zika may eventually affect Miami’s tourism industry, Aedo gave a simple response: “Yes.”

The Wynwood Yard decided on August 2, 2016 that it would be closing its business until further notice due to the number of Zika cases in the area, especially since it is a fully outdoor business.

Miami Herald reporter Jacqueline Charles contributed to this report.

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