The Dominican Republic has long been cherished as a premier Caribbean vacation spot, especially known for its affordable all-inclusive resorts. However, the nation is currently witnessing a remarkable shift towards luxury accommodation, with an anticipated addition of nearly 15,000 new rooms over the next three years. This expansion is predominantly focused on the upscale segment, marking an approximate 18% increase in available lodging, as noted by experts in the industry.
Michael Cummings, managing director of valuation and advisory services at CBRE, emphasized that "the luxury segment is continuing to increase." For instance, the emerging tourist destination of Miches, located approximately 60 miles west of Punta Cana, is set to open over 1,000 upscale rooms this year alone. Miches has already welcomed the launch of Secrets, Dreams, and Zemi all-inclusive resorts, each offering 500 guest accommodations. In addition, a luxurious Four Seasons resort and a residential complex covering 60 acres along Playa Esmeralda will debut in 2027, further enhancing the locale’s appeal.
Meanwhile, Punta Cana, the Dominican Republic’s flagship tourist region, is not lagging behind in upscale offerings. This year, the area has opened the 200-room St. Regis Cap Cana and the 340-room W Punta Cana, the latter marking the W Hotels brand’s inaugural all-inclusive venture. The forthcoming Moon Palace The Grand Punta Cana will elevate the luxury experience even further, showcasing a $1.5 billion investment that includes two 18-story towers and a total of 2,171 rooms. Daniel Adolfo Conte, vice president of commercial relations at The Palace Company, mentioned that this project will become the country’s largest single resort by room count.
Conte shared insights on the aims of the Moon Palace project, suggesting that it seeks to attract guests familiar with high-end properties like those in Cancun, while matching their expectations for service and average daily rates. Occupancy rates at hotels in Cancun often range from $700 to $1,000 per night, prompting a significant workforce investment. The Palace Company is in the process of recruiting new employees, implementing an extensive training program, and facilitating the transfer of around 300 staff from Cancun to Punta Cana, combining expertise with local talent.
In addition to resort accommodations, plans have been initiated to construct "Ciudad Palace," a dedicated community for hospitality workers featuring 1,800 apartments and essential amenities such as schools and medical facilities. Such developments can address the pressing issue of long commutes faced by hotel employees in Punta Cana, enabling them to live closer to work and reunite with their families.
Other noteworthy expansions are also on the horizon in Punta Cana. Nobu Hotels has announced the upcoming launch of the 200-room Nobu Hotel Punta Cana. Meanwhile, Palladium Hotel Group plans to enhance its existing portfolio in the area with the introduction of two new all-inclusive concepts by December: the Grand Palladium Select Bavaro and the Family Selection at Grand Palladium Select Bavaro.
Simon Suarez, vice president of Grupo Puntacana, attributes the growth in luxury offerings to significant government investments in infrastructure, including roads, water, sewer, and electricity enhancements.
Softening Hotel Metrics in the Dominican Republic
Despite this ambitious expansion in luxury accommodations, recent hotel performance indicators have shown signs of weakness. While the Dominican Republic welcomed approximately 5 million international visitors between January and August—a 1% increase from the previous year—average hotel occupancy rates for that period dipped to 77.7%, a decrease of 1.5 percentage points from 2024.
August alone recorded an occupancy rate of 69.5%, marking a drop of 3.7 points year-over-year. Moreover, CoStar data indicated that September occupancy saw a decline to 49.3%, down from 53.4% the previous year, with average daily rates falling by 5.5% to $167.92. Jan Freitag, national director of hospitality analytics for CoStar Group, described this trend as possibly a temporary fluctuation associated with calendar shifts, yet acknowledged that occupancy had dropped for five consecutive months leading up to August.
Freitag pointed to increasing competition from cruise lines as a potential factor affecting hotel performance. "If you look at cruise performance in terms of passenger volume and increases in rate, they have done phenomenally well," he noted. This trend suggests that a segment of value-oriented travelers may opt for cruises over hotel stays, potentially impacting the tourism sector.
For those looking to explore more about the evolving landscape of luxury travel in the Dominican Republic, additional resources can be found at sites like Travel Weekly and Caribbean Journal.
