Tourism in Puerto Rico: Surpassing National Trends

Specifically, the rental market saw a 9% increase in revenue, reaching $84 million. On the other hand, hotel revenue was $99 million, less than expected due to a slowdown in demand caused by a temporary drop in group and business travelers. 

Year-to-date lodging revenue totaled $1.28 billion, an 8% increase compared to last year. Hotel revenue contributed $790 million, representing 62% of the total revenue share. 

According to its CEO, Airbnb's second-quarter earnings indicated a slowdown in overall growth in several key areas, with signs of a decline in demand from American guests. However, AirDNA reports show that Puerto Rico continues to see significant growth in rental revenue so far this year, reaching $491 million, representing a 13% increase compared to last year. 

According to San Juan Cruise Port reports, more than 932,000 cruise passengers have arrived at the Port of San Juan this year through July. Although the local cruise market has not fully recovered from the impact caused by the pandemic, year-to-date results reflect a steady recovery, now reaching 88% of the record year of 2019. Renovation plans for San Juan’s cruise piers, including modernization of the port experience, improvements to terminal buildings, the Old San Juan pier promenade, and other infrastructure repairs, are scheduled to begin soon. 

According to Tourism Economics, overall demand for cruise travel is on the rise, with total passenger days up 7% through June. Travel from the U.S. to all regions saw a 2% increase in the first six months of 2024 compared to the first half of 2019. 

In July, the lodging industry showed a 2.6% increase in total demand compared to the previous year. However, demand for hotel nights has not seen any increase since the second quarter, according to the STR firm. This is not the case for short-term rentals, where booked nights increased by 10% in the same period.

Hotel demand was impacted, in part, by a temporary decline in group and business travel bookings. Despite these challenges, hotels maintained a record average room rate of $273, representing a 1.2% increase over last year.

So far this year, total demand for accommodations reached 712,000 room nights, a 7% increase compared to last year. Hotels account for 56% of the lodging market, with an average room rate of $310. Although hotel demand increased 2% over last year, short-term rental nights were up 13%, with an average room rate of $243 per night.

Contrary to the local industry, U.S. hotel demand got off to a slow start in 2024 but rebounded in the second quarter with 1.4% growth over 2023, according to STR. Tourism Economics and STR report that luxury hotels continue to outperform economy and midscale properties, reflecting the effects of inflation and higher interest rates on household budgets. Year-to-date, U.S. lodging demand is showing minimal growth of 0.1% compared to last year, with the Mid-Atlantic and Northeast regions performing better. 

GDP growth accelerated to 2.8% in the second quarter, which is a good sign for the economy, indicating strength and reinforcing Tourism Economics’ early 2024 forecast for a mild economic stabilization. Consumer spending increased at a solid pace in June, and this is expected to continue through the second half of 2024 as real income growth persists amid strong household balance sheets, even amid a slightly higher U.S. unemployment rate. 

Puerto Rico continues to outpace the U.S. average in job growth in the leisure travel and hospitality sectors. The Bureau of Labor Statistics’ June estimates report 99,900 jobs in these sectors, an 8% year-over-year increase compared to the U.S. average of 2.5%. 

Source: Discover Puerto Rico.