Dominican Republic – Long known as the Caribbean’s top destination for value-oriented all-inclusive resorts, the Dominican Republic is in the midst of a luxury accommodation boom, with nearly 15,000 new accommodations expected to be built over the next three years, many of them in the luxury segment.
Michael Cummings, managing director of valuation and advisory services at CBRE, said the roughly 18% increase in room inventory was skewed toward the higher end of the market.
“The luxury sector continues to grow, with more than 1,000 luxury rooms scheduled to open in Miches alone this year,” Mr Cummings said.
Miches is a relatively new tourist destination located about 90 miles west of Punta Cana that has seen significant investment. Secrets, Dreams and Seminar all-inclusives debuted in Miches earlier this year, each with 500 rooms. Spanning 60 acres along Playa Esmeralda, the Four Seasons luxury resort and residential complex is scheduled to open in 2027.
At the same time, Punta Cana, the Dominican Republic’s signature destination, is developing its own luxury aspirations. Earlier this year, Punta Cana opened the 200-room St. Regis Cap Cana and the 340-room W Punta Cana, the W hotel brand’s first all-inclusive.
One of the biggest problems in Punta Cana today is that[resort employees]have to travel hours to work and then hours to get back, or sometimes they have to live far away from their families. We’re going to give people the opportunity to live with their families right next to the property.
Daniel Adolfo Conte
Next year will open Moon Palace the Grand Punta Cana, a $1.5 billion luxury all-inclusive project with two 18-story towers and 2,171 rooms. Daniel Adolfo Conte, vice president of commercial relations for The Palace Company, said Moon Palace will be the DR’s largest single resort in terms of number of rooms.
“Our (plan) is to bring complementary demand to the island,” Conte said. “And we’re bringing people to Punta Cana who are used to properties like ours in Cancun and the same level of service and ADR.” (Minimum rates at Moon Palace The Grand Cancun range from around $700 to $1,000 per night.)
However, Conte acknowledged that providing luxury services at that scale requires significant human capital investment. Palace Company is in the process of hiring new employees and has a comprehensive training program in place. The company has about 300 staff working in Punta Cana from Cancun, and about 500 staff from the Dominican Republic to Mexico to work and train before opening.
“We need to make sure we have the level of service that we provide in Cancun, and this is the best way to do it,” Conte said.
The project also calls for the construction of a Ciudad Palace for hospitality workers, with 1,800 apartments, a school, a hospital and other facilities that will eventually house and serve more than 12,000 people.
“One of the biggest problems in Punta Cana right now is that[resort employees]have to travel hours to get to work and then hours to get home, or sometimes have to live far away from their families,” Conte said. “We offer people the opportunity to live with their families right next to the property.”
Other brands are also planning premium expansions in Punta Cana.
Nobu Hotels has announced plans to open the 200-room Nobu Hotel Punta Cana, while Palladium Hotel Group is debuting two all-inclusive concepts in December, Grand Palladium Select Bavaro and Grand Palladium Select Bavaro Family Selection, in addition to its existing resort complex in Punta Cana.
Simon Suarez, Vice President of Grupo Punta Cana and Honorary Director of the Executive Committee of the Caribbean Hotel and Tourism Association, acknowledged the government’s investment in new areas in the country in terms of infrastructure development such as roads, water, sewage and electricity. “Every element is important,” he said.
Signs of hotel softness
Despite the expansion, hotel performance metrics are showing some softening, even though DR’s international visitor numbers of 5 million from January to August increased by about 1% year-on-year.
When you look at cruise’s track record in terms of passenger numbers and fare growth, it’s been phenomenal. And perhaps more leisure and value-oriented travelers are being siphoned off from hotel stays to cruises.
Jan Freitag
The country’s Hotel and Tourism Association reported that the average hotel occupancy rate from January to August 2025 was 77.7%, 1.5 percentage points lower than the same period in 2024. The occupancy rate in August was 69.5%, down 3.7 points from the same period last year.
Occupancy in September fell to 49.3% from 53.4% a year ago, and average daily rate (ADR) fell 5.5% to $167.92, according to CoStar data. Jan Freitag, National Director of Hospitality Analytics at CoStar Group, characterized the decline as a potential sharp decline related to the calendar change, but he also said DR occupancy had declined for five straight months through August, with ADR remaining flat at around $220.
Freitag cited cruise ship competition as a potential factor.
“If you look at cruise’s track record in terms of passenger numbers and fare growth, it’s been phenomenal,” he said. “And I think that’s probably where leisure, value-oriented travelers are being siphoned off from hotel stays to cruises.”
Note: This article first appeared on Travel Weekly.
