SANTO DOMINGO.– In large-scale developments, such as hotel complexes and real estate projects linked to the sector, the distribution of risk among investors, developers and banks is one of the determining elements for their financial viability.
According to an analysis published by the specialized magazine Hosteltur, an international media outlet focused on the tourism industry, the financial structuring of hotel projects is usually designed under a shared risk scheme, where each actor assumes different responsibilities according to their role within the operation.
The investor: market risk and profitability
As Hosteltur explains in its hotel economics and finance section, the investor primarily assumes market risk, meaning the possibility that projected occupancy levels, rates, or revenues will not meet initial expectations. This includes factors such as changes in tourism demand, economic cycles, and geopolitical conditions.
For its part, the Inter-American Development Bank (IDB), in various studies on financing tourism infrastructure in Latin America, points out that private capital usually demands returns in line with the level of exposure assumed, especially in emerging markets where regulatory and macroeconomic risks may be greater.
The developer: execution and construction risk
Meanwhile, the developer faces risks associated with project execution. A technical report from the international firm Deloitte on real estate and hotel development explains that the main challenges at this stage include cost overruns, schedule delays, variations in materials, and regulatory compliance.
The developer also assumes contractual risks arising from obtaining permits, environmental compliance, and coordination with hotel operators, when these are part of the project scheme.
Banking: Credit Risk and Financial Structuring
The banking sector, for its part, focuses its analysis on credit risk. According to publications in the financial magazine AméricaEconomía, banks evaluate the developer's ability to pay, projected cash flow, and the guarantees offered before approving financing for tourism developments.
In the Dominican context, the specialized portal El Inmobiliario has highlighted in reports on tourism financing that financial institutions not only contribute capital, but also strengthen the confidence of international investors by participating in the structuring of the project.
Mechanisms to balance risk
According to studies by the Economic Commission for Latin America and the Caribbean (ECLAC), mixed financing models that combine private, banking and, in some cases, public support allow for a more efficient distribution of risk, especially in high economic impact projects such as tourism.
In the Dominican Republic, the use of real estate trusts, regulated by Law 189-11, has been identified in industry analyses as a key tool for making the use of funds transparent and protecting the interests of buyers and investors.
A structure that demands balance
In short, the proper allocation of risks not only protects the parties involved but also determines the project's long-term sustainability. As various analyses from the tourism and financial sectors agree, when risk is poorly distributed, the project loses competitiveness; when it is well-structured, it becomes an engine of economic development.
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