Impulse to Shopping Tourism in the Dominican Republic

25-07-24

In 2024, the average daily expenditure of tourists in the Dominican Republic stands at US$164.98. This figure reflects the importance of tourism to the national economy, especially considering that the country received around 10 million visitors in 2023. Of these, 8 million arrived by air and stayed in local establishments, contributing significantly to the economy through the purchase of goods and services.

Of the 8,058,671 travelers arriving through Dominican airports in 2023, a total of 6,730,802 were foreigners, while 1,327,869 were Dominicans residing abroad. The arrival of these tourists has been critical to the tourism industry, generating an impressive income of more than US$9.751 billion.

In an effort to maximize tourism revenues and encourage greater spending by visitors, the Dominican Republic Hotel and Tourism Association (ASONAHORES) has launched an ambitious proposal to promote shopping tourism. The initiative focuses on the implementation of a regulation that would allow tourists to recover the Tax on the Transfer of Industrialized Goods and Services (ITBIS) that they pay during their stay in the country. This measure is intended to encourage tourist spending and provide a significant boost to various local economic sectors.

Aguie Lendor, representative of ASONAHORES, has stressed that one of the main obstacles to increasing tourist consumption in the Dominican Republic is the lack of tax incentives. In Lendor's words, “When a tourist arrives in Spain, he or she has the opportunity to receive an 18% tax rebate on purchases made. This type of incentive not only encourages an increase in purchases, but also benefits the entire value chain, including hotels, restaurants, cab drivers and tour operators.” ASONAHORES' proposal seeks to emulate this Spanish model, allowing tourists to recover part of the tax on their purchases, as long as they comply with an established minimum expenditure.

The potential impact of this measure could be profound. The implementation of a tax refund system will not only attract tourists with high purchasing power, but will also diversify the profile of visitors who choose the Dominican Republic as a destination. By offering a significant tax advantage, the country could become more competitive in the global shopping tourism market, attracting tourists looking to combine luxury shopping with cultural and recreational experiences.

Contacted by Antonio Santos del Valle, international consultant, coordinator of the World Shopping Tourism Network, and president of the Tourism and Society Think Tank, he explains that “the introduction of a well-designed shopping tourism program will not only increase tourists' direct spending on goods and services, but will also have positive effects on related economic sectors, such as handicrafts and local commerce. These types of programs encourage greater interaction between tourists and the local economy, generating collateral benefits that go beyond shopping in luxury stores.”

ASONAHORES' proposed approach has the potential to transform the Dominican Republic's tourism landscape. In addition to attracting high-profile tourists, the recovery of ITBIS could encourage visitors to spend more on a variety of products and services, from luxury goods to local and artisanal products. This would not only increase direct tourism revenues, but also encourage greater investment in the production and marketing of indigenous products, promoting sustainable development and inclusive economic growth.

The proposal could also have a positive impact on local employment. By stimulating a greater flow of tourists and increased spending in various sectors, new job opportunities would be generated in areas such as hospitality, commerce and handicrafts. This type of economic development can have multiplier effects on the local economy, creating a virtuous circle of growth and prosperity.

The implementation of an ITBIS refund system could also contribute to improving the perception of the Dominican Republic as an attractive shopping destination in the international market. As in other successful tourism destinations, offering tax incentives can make a significant difference in the decision of tourists when choosing their next destination. This approach would not only strengthen the country's competitive position in global tourism, but also highlight its commitment to visitor satisfaction and the promotion of the local economy.

The boost to shopping tourism in the Dominican Republic, supported by ASONAHORES' proposal and the recommendations of experts such as Antonio Santos del Valle, has the potential to generate broad and lasting benefits for the national economy. By offering tax incentives to tourists, the country could significantly increase spending on goods and services, promote the development of related economic sectors, and improve its positioning in the global tourism market. With effective implementation and a well-designed strategy, the Dominican Republic could become a leading shopping tourism destination, providing benefits to both visitors and the local economy as a whole.