SANTO DOMINGO.- Over the past six years, the loan portfolio of multiple banks destined for tourism registered an expansion of 127%, going from RD$42,808 million in 2016 to RD$97,131 million in 2022, for an accumulated increase of RD$54,324 million, revealed the Association of Multiple Banks of the Dominican Republic (ABA).
The ABA explained that, between 2016 and 2022, the relative growth recorded in the tourism portfolio was double the expansion observed in the total commercial loan portfolio, which, for the same period, increased by 64%.
The Banking Association reported that, during the aforementioned period, the tourism loan portfolio registered an average annual growth of 14.8%, while the commercial loan portfolio grew by 8.6%. In other words, the tourism loan portfolio grew 72% faster than the commercial loan portfolio, and as a result of this dynamic, tourism's share of the total commercial loan portfolio increased from 8.5% in 2016 to 11.7% in 2022, the banking association pointed out.
Analyzing the post-pandemic years, the ABA observed that bank support for the tourism sector strengthened, registering a 178% increase. It specified that between 2020 and 2022, credit to the tourism sector grew by an average of RD$13.326 billion; this is compared to the average increase of RD$4.782 billion that the same sector had registered in the 2016-2019 period.
“The figures indicate that Dominican multiple banks have shown confidence in the tourism sector, even in the most difficult times such as the pandemic and, as such, have been a key ally in the recovery and development of this industry,” the ABA emphasized in a press release.
In that vein, he praised the multiplier effect of tourism on the economy, given its role in the production chains it links, boosting micro, small, and medium-sized enterprises (MSMEs) and generating jobs in numerous related sectors, such as construction, transportation, agriculture, and telecommunications. He also noted that tourism has the potential to drive infrastructure development in tourist destinations, which in turn benefits the rest of the real economy.
“More and more, multiple banks are aware that more tourism equals more growth, more jobs, more foreign exchange and more investment, which benefits Dominican households and SMEs,” the banking association stated.
Under that premise, the ABA guaranteed that tourism will continue to find support from the banking sector for the challenges ahead, providing credit and other financial services to companies and projects in the so-called "smokeless industry".
Impact of tourism on the economy
On the other hand, the Banking Association emphasized the importance of tourism as an economic and social activity at a global level, since, according to data from the World Tourism Organization in 2019, this sector contributed 4.1% to the world's GDP.
He highlighted that, for some emerging countries, such as the Dominican Republic, tourism is a fundamental industry that represented 5.3% of GDP in 2021 and reached a peak of up to 8.0% of GDP in 2007.
The association also highlighted that in 2022 tourism revenues totaled US$8.407 billion, equivalent to 22% of total foreign exchange earnings (US$39 billion).
