A sober outlook on the tourism industry for 2023

Last year, there was hope for the recovery of the tourism industry on the island, with experts predicting a 14% increase in booked nights compared to the year before. Research recently released by tourism company Discover Puerto Rico shows that the industry seemed to come back even stronger than was projected.

Despite spikes in the price of flights, 2022 saw an increase of 24% from the year before, which also reflects a 69% increase from the island’s previous record set in 2019.

More than 5.1 million passengers arrived through the Luis Muñoz Marin International Airport, according to data from Aerostar Airport Holdings, indicating a 5% increase in visitors compared to 2021.

Bookings for the first trimester of 2023 suggest a good start to the year and reflect consumer’s growing positive outlook on the economy. Comparing last year’s percentage of booked accommodations, 24% more rooms are already reserved than at the same point a year ago.

Tourism predictions for 2023

The first quarter of the year tends to be the slowest in terms of reservations, with Tourism economics maintaining a sober outlook for Puerto Rico going into the new year. Much of the industry’s growth will be driven by increases in cruise line activities.

Economic impact reports released prior to the pandemic revealed that cruise ship visitors accounted for a third of the volume of all visitors, but only 7% of spending. In 2022, cruise passengers who spend the night on the island spend $520 per trip compared to the average visitor’s $3,340, as found in Discover Puerto Rico’s visitor profile data.

While the volume of cruise passengers is expected to increase by 117% compared to 2022, the impact on total visitor spending is low.

Tourism Economics anticipates an increase of 3.6% in non-resident visitor spending — a prediction that depends on the condition of the economy and whether there will be a recession. Even without a formal recession, consumer confidence in spending on trips continues to fall.

Negative consumer outlook

The January 2023 report on US travelers from Destination Analysts released that 45% of Americans think traveling is too expensive, resulting in opting out of going on trips for the last six months.

The second most common deterrent to travel was the price of gasoline, followed by personal financial reasons.

The reports also found that over 64% of US travelers agreed that much of their anxieties come from fear of an impending recession. 77% of these cautious travelers say they’ve reduced their spending habits, including on travel.

A record low of 22% of Americans feel that now is a good time to travel — a post-pandemic low.