Since I've highlighted travel in the Dominican Republic today, I thought I would also provide some resources and information about the Samana Peninsula, the area that I believe holds the most promise for real estate investors. I think from a due diligence standpoint, it's important to be aware of the whole country and what is happening there, which is the reason for posting the previous articles.
The market we are focusing on, Las Terrenas, is currently quite different from what is described in the New York Times articles. There are some all inclusive resorts in Las Terrenas; however, none yet that approach the price points you would find in Punta Cana. Instead, Las Terrenas has a good supply of smaller hotels and resorts that are mostly comprised of apartments (condos owned mostly by investors) as well as villas and bungalows that sleep as many as eight to ten people. Because Las Terrenas is not only a vacation destination–it is home to over 4,000 Europeans who have taken residency in the Dominican Republic–there are markets, shops, bakeries, and other resources that preclude the need for all inclusive resorts as the only option.
One of the best resources for information about Las Terrenas and the Samana Peninsula is Samana.Net. This site lists many of the accommodations available in Las Terrenas, Las Galeras, and Samana, the three major towns on the Samana Peninsula as well as a lot of other useful information.
dr1.com is about news and travel in the Dominican Republic. This site has a wealth of information and is worth exploring. There are several blogs associated with dr1.com, including the Green Team, a blog focused on sustainable tourism and preserving the environment.
Here's another article about travel and vacationing in the DR published by the New York Times and reprinted in local papers. Again, the article focuses on the highest-end destinations. As the article indicates, there are in fact still bargains in the DR. The author mentions the improved access to the Samana Peninsula (see bold below). Vacation rental rates in the town of Las Terrenas, just 30 minutes from the newly opened El Catey International Airport, range from about $60 for a one-bedroom apartment, in an older, but still very pleasant resort, to $400 or so nightly for a 4-bedroom villa directly on the beach.
October 29, 2006 The Dominican Republic Offers a New Place in the Sun By SETH KUGEL
Correction Appended
I WAKE up in my golden-yellow Oscar de la Renta-decorated, $650-a-night villa, throw off the 350-thread-count sheets, and pad over to open the balcony doors. In floods the Caribbean sunlight, nothing but a long-fronded palm and a patch of manicured grass between me and the sugary sand beach, which gives way to water a shade of aquamarine that I thought had existed only in Crayola boxes. It’s as if I had woken up in a travel brochure ... or a Corona commercial. But really, it’s just morning in Tortuga Bay, the new luxury resort on the eastern tip of the Dominican Republic.
My old friend Jon is also up, already fantasizing about his golf game on the P. B. Dye-designed oceanfront course (and, yes, there’s the seventh hole, jutting out into the sea just to my left). It’s a significant change from his dusty jaunts through the public courses of eastern Massachusetts.
Meanwhile, I am preparing myself for the salt-scrubbing, Oriental-massaging experience of a $247 Energizing Day Package at the Six Senses Spa, the high-end Asian chain previously only available at destinations like Phuket and the Maldives, where it takes a $247 massage just to recover from your 20-plus hour flight. (Tortuga Bay is just a three-and-a-half-hour flight from John F. Kennedy Airport in New York).
But first, breakfast. Sure, just pressing “2” on our direct-to-butler cell phone would summon a feast to the aforementioned balcony, but we’re guys who prefer the high-end gluttony of the breakfast buffet combined with made-to-order omelets and pancakes at the poolside Bamboo Restaurant. It’s just a two-minute walk away. (Still, we take our golf cart.)
Just another day in paradise.
But great as Tortuga Bay might sound (and some service glitches over the course of our stay made me question just how great it was), this resort, with 50 suites in 15 villas, is just one of a number of high-end getaways that are beginning to call the Dominican Republic home. The Sanctuary Cap Cana, a boutique hotel with eight restaurants within a larger $500 million development, has a low-key opening scheduled for Feb. 1; before then, Jack Nicklaus will be flying in to open one of his Signature golf courses, with nine of the holes on the water. Farther up the east coast, through picturesque hills and small towns, the Sivory resort, with its 55 terra-cotta-colored suites built into jungle-worthy vegetation (lushness reduced near the suites to avoid bugs) — some right on the beach with their own private plunge pools — is gearing up for its first full winter season.
Time was the Dominican Republic was famous for its bargain getaways: $1,000 for a flight-included, all-inclusive resort where the food was passable, the drinks strong and the merengue music festive. (Actually, that time was only a year or two ago, and the bargains are still there.) But the country is increasingly becoming the five-star playground of the Caribbean, pulling in tourists that might otherwise have gone to Jamaica, Puerto Rico or St. Thomas and gearing up to give the glamour spots of Anguilla, St. Bart’s and Turks and Caicos a run for their money.
As the winter season approaches, the Dominican Republic has all but been anointed with “it-destination” status by celebrities, travel magazines and tour operators. It’s estimated that four million people will visit the country this year. That’s more than double the 1.9 million that came in 1996. And though Canadians and Europeans were the traditional visitors, Americans are fast taking over.
With thousands of pricey hotel rooms and luxury second homes planned for the next decade, and paparazzi-drawing celebrities like the Clintons, Mikhail Baryshnikov, Julio Iglesias, Vin Diesel and Brad Pitt popping in for work or play or both, this is only the beginning. The Roco Ki real estate venture will open the Westin Roco Ki Beach and Golf Resort in Punta Cana in winter 2007, and is planning at least seven high-end hotels, in a resort that gives a nod to the Taíno Indians who lived on the island before Columbus arrived. (It financed an archaeological dig on its land before beginning construction and is considering opening a museum nearby with the findings.) It is also a residential community: there was $100 million in sales the day those homes went on the market in April 2005, according to Nick Tawil Fernandez, the chief executive officer.
Cap Cana has about 30,000 acres south of Tortuga Bay, and villas are on sale from $750,000; in addition to the Sanctuary Cap Cana, its marina, whose debut is this December, will eventually have 1,000 slips. And it’s not just on the east coast that all this action is taking place: in Samaná, the paradisiacal peninsula on the north coast visited by humpback whales, the Gran Bahía Príncipe chain is opening no less than four five-star hotels for the winter season.
And there is much near-virgin beach still being scoured: Fernando Rainieri, a former tourism secretary and the brother of the Punta Cana pioneer Frank Rainieri, is part of a group of Dominican investors that includes the wealthy Najri family, that bought some beachfront land in 1997 in Miches, the largely undeveloped area between the resorts of Samaná and Punta Cana. They’ve recently been negotiating with a group of American and Canadian investors. (Howard Kerzner, whose company owns the Atlantis resort in the Bahamas and many others, recently died in a helicopter crash on his way to scout out land in the north.)
How did a country that three decades ago few people considered a beach destination become such an A-list destination?
BEACHES The hundreds of miles of sandy shore, much of it seemingly typecast for the role of Paradise, beats every other Caribbean nation but Cuba for length; especially on the east end, the fine white sand and turquoise waters match up for quality as well.
GOLF Fazio, Nicklaus, Dye, they’ve all been there, designed that. (There are more than 20 designer golf courses in use or planned.)
FLIGHTS With five international airports taking in more than a dozen daily nonstop flights from New York City and direct service being offered from an ever-increasing number of other American cities, it’s easy to get there. A contributing factor: New York’s enormous Dominican immigrant community flies back and forth regularly, creating year-round demand and thus increasing options.
THE COCOON EFFECT Tourism in the Dominican Republic has long been all-inclusive. And although many of the new high-end resorts are not, they do provide the same kind of get-away-from-it-all experience travelers in escape mode are often looking for.
POOR INFRASTRUCTURE The Dominican Republic’s notoriously bad (and badly marked) roads, dysfunctional power grid and dubious water system had a hand in driving the all-inclusive culture by making it necessary for resort owners to provide a self-sustaining community and thus a huge disincentive to explore the otherwise culturally rich island, home to everything from merengue to Christopher Columbus’s first settlement in the New World.
BASEBALL As Dominican baseball superstars like Pedro Martínez, Sammy Sosa, Manny Ramírez and Albert Pujols became household names in the United States over the last decade, their country of origin did too.
CELEBRITIES It’s hard to imagine anyone who has brought more boldface names to the Dominican Republic than the designer Oscar de la Renta. To cite one prominent example, he got Hillary Clinton to visit Punta Cana in 1998, and she and Bill have been going back every since. Producing a Miss Universe, Amelia Vega, in 2003, didn’t hurt either.
GOVERNMENT EFFORTS The government played a key role in providing tax breaks and other support for the first round of all-inclusive resorts that sprouted in the 1980’s. These days, the secretary of tourism, Félix Jiménez, has a $30 million promotional budget, and through the public relations firm BVK has been blitzing New York and other cities with its Republic of Colors campaign.
TERRORISM AND ANTI-AMERICANISM The Dominican Republic doesn’t have them — or tsunamis — making it an attractive substitute for those fearful of seeking luxury in Thailand, Indonesia, Egypt and the like. “Dominicans are not anti-anything,” said Ellis Pérez, a vice president of Cap Cana and a former secretary of tourism. “We are an open, simple people.”
According to Mr. Jiménez, tourists spent $14 millon in the country in 1974; in 2005 his government placed the figure at $3.5 billion. In 1986 just over half a million people visited the country. In 1996, it was over 1.5 million. And beyond the four million expected this year, the secretary nonchalantly predicts five million for 2007.
The Dominican Republic already takes in more tourism dollars than any other country in Latin America except Mexico and Brazil, according to World Tourism Organization statistics. In the meantime, the importance of sugar, coffee, cocoa and tobacco to the economy has declined. “Tourism has been the motor of the Dominican economy for the last 20 years,” said Fernando Rainieri, the former tourism secretary and current investor in Miches. “In 1980, nobody believed in it and no one wanted to invest in it.”
The tourism industry in the Dominican Republic is focused these days on Punta Cana, which many have compared to Cancún. For better or for worse, the comparison makes sense: like Cancún, in the 1960’s Punta Cana was not on the map. Then, in 1969, a young Frank Rainieri flew with a group of American investors over the isolated, lightly inhabited east coast of the country; by the early 70’s the land was theirs. A 1972 law made investing in tourism a nearly tax-free endeavor, and the government backed the first beach resort, Playa Dorada, which opened on the north coast simultaneously with the Puerto Plata airport in 1980.
The next year Club Med opened in Punta Cana, followed closely by the Spanish hotel company Barceló. The Punta Cana Airport, privately owned and operated by Mr. Rainieri and the Punta Cana Group, opened in 1985 and in 1988 the Puntacana Resort & Club opened. More followed, and through August of this year, according to official Central Bank statistics, 1.26 million foreigners not of Dominican origin (presumably tourists) entered the country through Punta Cana. That is nearly three times as many as flew into Santo Domingo, the capital and by far the country’s biggest city.
The country has also been investing in infrastructure. There is the Tourist Boulevard between Punta Cana and Uvero Alto. Late last month, the Dominican president, Leonel Fernández, was in Punta Cana to meet with hotel owners, and Frank Rainieri suggested they begin thinking about stretching the highway beyond Uvero Alto to Miches. (Which, coincidentally or not, is where his brother Fernando owns land). A highway from Santo Domingo to the beautiful Samaná peninsula is supposed to be completed in 2008, and the airport at Samaná, El Catey International Airport, is to open next month. Not coincidentally, the Gran Bahía Principe resort chain will open about a thousand luxury hotel rooms in the next two months, in four different complexes.
With the high-end hordes bearing down upon them, though, hotel operators face a problem: quality of service. Tourism officials and hotel executives all seem to read from the same talking points: the Dominican people are the country’s biggest asset, what with their warm hearts, friendly faces and big smiles. But hand-clapping, merengue-dancing Club Med smiles are one thing; boutique hotel “Let me explain our pillow menu to you” smiles quite another.
The flaws during my two days in Tortuga Bay made that all too clear.
Sometimes, they were funny: a welcome letter left for Jon and me in our bedroom (with two separate beds, I hasten to point out), read, “Mr. Kugel, thank you again for choosing us for your honeymoon vacation.” But more often they were annoying. Repeated dial-2 calls to our butler to help us reduce the air-conditioning level from Arctic freeze to Caribbean cooldown produced fruitless advice; we would have shivered through two nights if the comforters Oscar de la Renta chose for us weren’t so cozy. Jon got charged the outside guest rate for a round of golf ($50 extra) even though our butler had made the tee time and it had been confirmed with a letter from management. (And some things even the best of service couldn’t have helped. That pristine view from our balcony covered up a secret: just beyond the shoreline, the precious sand gave way to a bottom so rocky and slippery as to make taking a dip genuinely unpleasant.)
Haydée Palmieri, the vice president of hospitality and human resources at Punta Cana (and Frank Rainieri’s wife), acknowledged the flaws in service, though she did point out that Leading Hotels of the World had approved their application in September, making them the second member from the Dominican Republic (along with the Paradisus Palma Real).
André Gerondeau, executive vice president for Sol Meliá, which owns the Paradisus, acknowledges that raising the level of service will take time. “Anywhere in the world,” he said, “especially in Latin America, there is a huge gap between people that have resources and those who don’t,” which makes high-end service a problem. The Dominican Republic is quickly catching up, he said. But still, “if someone has been to Bali, Seychelles, St. Bart’s and then comes to the D.R.,” he said, “they will certainly see a difference. You need to connect with your team members. The overall perception of us versus them is a killer.”
Will the Dominican Republic dominate the Caribbean for years to come? Puerto Rico is feeling the heat, having fallen behind it in tourism receipts, if not absolute numbers, in 2004, and is fighting back with a new Tourism and Transportation Strategic Plan. And the stress on beaches, golf, beaches and golf — the themes that dominate the Web site, godominicanrepublic.com and its Republic of Colors campaign, may leave the country open to competition with places like Jamaica, whose advertising and Web site (visitjamaica.com) also stresses people, culture, art, music, food and ecotourism.
This much is safe to say: The secretary of tourism’s prediction of five million visitors in 2007 will very likely come true. Or there will be a lot of really expensive hotel rooms, villas and bungalows lying empty.
VISITOR INFORMATION
The rates are for double occupancy in mid-January, including a 16 percent tax and 10 percent service charge. All in the Punta Cana area unless otherwise noted.
Tortuga Bay, (888) 442-2262; puntacana.com. From $773 per night.
Sivory Punta Cana, (809) 552-0500; sivorypuntacana.com. From $617 per night or $995 per night all-inclusive.
Sanctuary Cap Cana, (809) 562-7555; capcana.com. Opening Feb. 1.; rooms from $347.
Paradisus Palma Real, (866) 436-3542; paradisuspalmareal.com. From $471 per night, all inclusive.
Gran Bahía Príncipe Cayo Levantado (in Samaná), (866) 282-2442; bahia-principe.com. From $672 per night, all inclusive.
SETH KUGEL is a frequent contributor to the Travel section.
Correction: Nov. 12, 2006
An article on Oct. 29 about new resorts in the Dominican Republic misstated the designer of the golf course at Tortuga Bay, a new resort there. It was designed by P. B. Dye — not by his father, the golfer and course designer Pete Dye.
This article about vacationing in the Dominican Republic was printed in the New York Times a year ago. The places mentioned are still the most developed tourist destinations on the island. The Dominican government is putting $5 billion into tourism development between now and 2008. Media coverage in the US, Canada and Europe is also adding to the increased interest in the DR as a vacation destination.
January 22, 2006 Family Destination of the Year: Dominican Republic By CAREN OSTEN GERSZBERG
THE variables involved in planning a Caribbean family vacation can be daunting enough to send the weak scurrying back to a condo in Sarasota. Ideal for honeymooners or stressed-out grown-ups, many Caribbean resorts are designed for those who need to get away from it all. Yet children seem to need something to do other than lounging on sunny beaches. Picky teenage travelers need something to do other than sneaking into casinos. (At least, their parents think so.) And the deal-breaker is that many remote Caribbean destinations require changing planes.
The Dominican Republic, known as the D.R., is gaining traction as a family destination. One reason is a growing number of family-centered resorts with activities ranging from windsurfing to world-class golf to snorkeling to teenage-only lounges. Another lure is that there are now numerous nonstop flights from the New York area.
Emily Greenberg, a mother of three and a nursery school teacher from Mamaroneck, N.Y., just spent her fifth consecutive winter holiday in the Dominican Republic and finds it the ideal place for a yearly family reunion. "Our extended family includes 16 children, ranging in age from 7 to 25, and we've found that the Dominican Republic has something for everyone. The younger kids enjoy a busy day of sports and beach activities and for the older kids, the night life of nearby casinos and discos is most important," Ms. Greenberg said.
At 19,000 square miles, the Dominican Republic is not a pipsqueak island with one airport, so picking the right spot takes some thought. Most of the Dominican Republic's resorts and white sandy beaches lie along the southern coast to the east of the capital, Santo Domingo, and stretch to the country's eastern tip at Punta Cana.
For families who like to stay put, there is an array of all-inclusive resorts to choose from. Largest among them, the 7,000-acre Casa de Campo resort in La Romana, www.casadecampo.com.do, 809-523-3333, is the site of the famous Teeth of the Dog golf course and two additional courses. An elaborate equestrian center, 13 tennis courts (with lights for night play), skeet shooting, water sports, children's programs for all ages and a marina with shops and restaurants are among the amenities here. Double rooms start at $353 a night in the winter season (packages including meals and activities are additional). Two-bedroom villas start at $840 a night; three-and four-bedroom villas come with breakfast and maid and butler service and start at $1,057 and $1,253, respectively.
Teenagers are catered to at the recently renovated Club Med Punta Cana, 809-686-5500, www.clubmed.com. There are programs for children aged 2 to 13, to be sure, but only guests between the ages of 14 and 17 are allowed entry into the Ramp, a new two-story open-air lounge (to make sure, each is given a special red bracelet upon check-in). The Ramp has an area for inline skating, skateboarding and playing foosball, telescopes for star gazing and plenty of places to just hang out. Seven-night all-inclusive rates start at $840 an adult, $385 a child ages 4 to 15, and $231 a child ages 2 to 3.
There is plenty of space to wander at the brand-new Paradisus Palma Real in Playa de Bavaro, Punta Cana, 809-686-7499, www.solmelia.com, a 554-room all-suite, all-inclusive resort that opened last month and provides a family concierge to coordinate activities, a children's camp for ages 5 to 12, six restaurants, and three swimming pools. All-inclusive rates for two start at $1,100 and at $337 for children ages 4 to 12 in the winter high season. And for the child who dreams of becoming the next Sammy Sosa, an action park with batting cages, archery and a climbing wall awaits at the nearby sister resort, Paradisus Punta Cana, Playa de Bavaro, Higüey, 809-687-9923, www.solmelia.com. All-inclusive rates for two start at $750; $187 for children ages 4 to 12.
Plans are under way for the new 315-room Westin Roco Ki Beach and Golf Resort, Punta Macao, 305-792-1500, on the Web at www.westin.com/rocoki , set to open in 2007. Aside from its 18-hole championship golf course, two-mile beach and Westin Kids Club, the draw here is likely to be the 20 Jungle Luxe Bungalows, which will look as if they are floating over man-made lakes and will have panoramic views of the ocean.
Families seeking smaller hotels and closer access to adventure may prefer the northern coast near Puerto Plata. Also known as the Amber Coast because of its large amber deposits, the north attracts avid mountain bikers and is one of the world's top windsurfing destinations. Set at the base of a mountain range on a private beach, Casa Colonial Beach and Spa, Playa Dorada, Puerto Plata; 809-320-3232; www.slh.com, is an all-suite hotel with Spanish colonial architecture. Hotel guests have access to the Playa Dorada Golf Course, ranked in 2005 by Golf Digest as one of the best 100 courses outside the United States. Although there are no organized programs, children are welcome. Doubles from $350.
Perched on a cliff above Sosua Bay and recently renovated, the 190-room, all-inclusive Victoria Resort Golf and Beach Resort, also on Playa Dorada, Puerto Plata, 809-320-1200, www.vhhr.com, looks like a Victorian gingerbread house. Mountain biking, kayaking, snorkeling, windsurfing and fishing are just some of the activities offered, and there is a children's program for ages 4 to 12. All-inclusive winter rates start at $110 an adult and $55 a child from age 2 to 12.
If the desire to touch, pet and feed a shark strikes, take the family to Ocean World, Cofresi, 809-291-1000; www.oceanworld.net. Just minutes from Puerto Plata, this park has interactive dolphin programs, sea lions, snorkel reef tours, and swimming tigers. Call ahead to reserve for various activities.
There are five airports in the Dominican Republic, four of which can be reached by nonstop flights from the New York area. If you are traveling to the eastern tip, fly nonstop into the Punta Cana International Airport on American or Continental; rates start at $148. To get to the north, Puerto Plata International is a 15-minute drive from the Playa Dorada resorts and has nonstop flights on American and Continental starting at $208. Travelers going to the south coast can fly into Santo Domingo, served by American, Continental and Delta; high season rates start at $174. La Romana has its own airport on Casa de Campo's property, and American Airlines flies there with a change of planes in Miami or San Juan; rates start at $308. Jet Blue, American, Delta and Continental fly nonstop into Santiago, a 90-minute drive to Puerto Plata; rates start at $158. Fares do not include taxes and fees, which come to about $100 more.
It takes between 3 and 7 hours to fly to Costa Rica from most U.S. cities, and as Costa Rica becomes more popular with North American travelers, more flights are available into San José's JuanSantamariaInternationalAirport. In addition, Delta, American, U.S. Airways, United, and Continental all have regular nonstop commercial flights to the International Airpot in Liberia from their hubs in Atlanta, Miami, Charlotte, Chicago, Los Angeles and Houston, respectively. Liberia is the gateway to the beaches of the Guanacaste region and the NicoyaPeninsula, and a direct flight here eliminates the need for a separate commuter flight in a small aircraft or roughly 5 hours in a car or bus.
The Major Airlines--There are numerous airlines flying into Costa Rica. Be warned that the smaller Latin American carriers tend to make several stops (sometimes unscheduled) en route to San José, thus increasing flying time.
The following airlines currently serve Costa Rica from the United States, using the gateway cities listed. American Airlines (tel. 800/433-7300 in the U.S. and Canada or tel. 248-9010 in Costa Rica; www.aa.com) has daily flights from Los Angeles, Miami, JFK in New York, and Dallas-Fort Worth. America West (tel. 800/363-2957; www.americawest.com) has one daily direct flight from Phoenix. Continental (tel. 800/525-0280; www.continental.com) offers flights daily from Houston and Newark. Delta (tel. 800/241-4141; www.delta.com) offers two daily flights from Atlanta. Mexicana (tel. 800/531-7921; www.mexicana.com) offers flights from numerous North American cities, most connecting through the hub in Mexico City. United Airlines (tel. 800/538-2929; www.united.com) has daily flights direct from Washington, D.C., and from Los Angeles, and biweekly flights from Chicago O'Hare to Liberia. US Airways (tel. 800/622-1015; www.usairways.com) has direct flights from Charlotte. Grupo Taca (tel. 800/535-8780; www.grupotaca.com) is a conglomeration of the Central American airlines, with direct flights or connections to and from Boston, Chicago, Los Angeles, San Francisco, Houston, New Orleans, New York, Miami, and Washington.
From Europe, you can take any major carrier to a hub city such as Miami or New York and then make connections to Costa Rica. Alternately, Air Canada (www.aircanada.com) from Toronto, Iberia (www.iberia.com) or Air Madrid (www.airmadrid.com) from Spain, and Martin Air (www.martinairusa.com) from Holland have established routes to San José, some direct and others with one connection.
By Bus
Bus service runs regularly from Panama City, Panama, and Managua, Nicaragua. If at all possible, it's worth the splurge for a deluxe or express bus. In terms of travel time and convenience, it's always better to get a direct bus rather than one that stops along the way -- and you've got a better chance of getting a working restroom in a direct/express or deluxe bus. Some even have television sets showing video movies.
There are several bus lines with regular daily departures connecting the major capital cities of Central America. Call Panaline (tel. 255-1205), Transnica (tel. 223-4242), or Tica Bus Company (tel. 221-8954; www.ticabus.com) for further information. All of these lines service Costa Rica directly from Panama City and Managua, with connections to the other principal cities of Central America. None of them will reserve a seat by telephone, and schedules change frequently according to season and demand, so buy your ticket in advance -- several days in advance, if you plan to travel on weekends or holidays. From Panama City, it's a 20-hour, 900km (558-mile) trip. The one-way fare is around $20. From Managua, it's 11 hours and 450km (279 miles) to San José, and the one-way fare is around $12.
By Car
It's possible to travel to Costa Rica by car, but it can be difficult, especially for U.S. citizens. After leaving Mexico, the Interamerican Highway (Carretera Interamericana, also known as the Pan-American Hwy.) passes through Guatemala, El Salvador, Honduras, and Nicaragua before reaching Costa Rica. All of these countries can be problematic for travelers for a variety of reasons, including internal violence, crime, corrupt border crossings, and visa formalities. If you do decide to undertake this adventure, take the GulfCoast route from the border crossing at Brownsville, Texas, because it involves traveling the fewest miles through Mexico. Those planning to travel this route should look through Driving the Pan-Am Highway to Mexico and Central America, by Audrey and Raymond Pritchard (Costa Rica Books, 1997), or You Can Drive to Costa Rica in 8 Days!, by Dawn Rae Lessler (Harmony Gardens Publishing, 1998).
Car Documents -- You will need a current driver's license, as well as your vehicle's registration and the original title (no photocopies), to enter the country.
By Cruise Ship
More than 150 cruise ships stop each year in Costa Rica, calling at Limón on the Caribbean coast, and at Puerto Caldera and Puntarenas on the Pacific coast. Many are part of routes that cruise through the Panama Canal. Cruise lines that offer stops in Costa Rica include Crystal Cruises (tel. 800/804-1500; www.crystalcruises.com), Celebrity Cruises (tel. 800/722-5941; www.celebritycruises.com), Holland America (tel. 877/724-5425; www.hollandamerica.com), Princess Cruises (tel. 800/421-0522; www.princess.com), Royal Caribbean (tel. 800/398-9819; www.rccl.com), and Radisson Seven Seas Cruises (tel. 877/505-5370; www.rssc.com).
It might pay off to book through a travel agency that specializes in cruises; these companies buy in bulk and stay on top of the latest specials and promotions. Try the Cruise Company (tel. 800/289-5505; www.thecruisecompany.com) or World Wide Cruises (tel. 800/882-9000; www.wwcruises.com).
A winter ride near Hacienda Pinilla in Guanacaste province in Costa Rica, where condos and villas are springing up on cattle ranches and virgin Pacific beaches.
By JANELLE BROWN
Published: February 3, 2006
THE Liberia airport, Costa Rica's new international hub, is not precisely a beacon of modern transportation. The terminal consists of an open-air warehouse with a corrugated tin roof, cooled by an enormous fan whose main effect is to stir the grasshoppers into a frenzy. In the line for customs, visitors are kept company by butterflies and the occasional blasé frog.
The New York Times
Jean and Tony Capezza of Massachusetts have a home at Reserva Conchal.
Before visitors even leave the tarmac, though, smiling representatives from the local Chamber of Tourism are there to greet their out-of-town guests, most of whom have just arrived on the new direct three-hour flights from Atlanta, Miami and Houston. They press the real estate guide "Costa Rica Traveler" into newcomers' hands. In its pages, American visitors can find ads for dozens of different developments that will happily sell them a villa with an ocean view.
For decades the remote Pacific Coast of northern Costa Rica — the Guanacaste province — was the domain of die-hard surfers and backpackers, with other visitors deterred by the grueling five-hour drive from the country's main airport in San José. But in the last few years, Guanacaste has been transformed by a collection of hotels and real estate developments aimed at America's affluent baby boomers.
All up and down the coast, bulldozers are at work. Three major developments, including a project anchored by a Four Seasons hotel, are already selling luxury condominiums for $500,000 and up, and hundreds of smaller, more speculative endeavors are also breaking ground. The airport in Liberia, the capital of Guanacaste, is at the center of the transformation. Three years ago, when the first direct flights from the United States landed, only 50,000 people a year arrived there. In 2005, 300,000 did.
In the airport lines, Americans talk in urgent tones about the money to be made, about "Wild West" opportunities. Never mind that Guanacaste is still a region of cattle ranchers and rutted roads. The new homesteaders envision a beach, golf and spa destination equal to the Puerto Vallarta corridor in Mexico or WaileaBeach on Maui — without, so far at least, the high-rise blight. The area's promoters have taken to calling it the new Gold Coast.
"It's hard for me to look at all this change — you're used to how uncluttered it was," said Chris Mailloux, a ReMax agent whose family has been selling real estate in the area for 13 years. In one abbreviated block near his office, in the tiny fishing village of Playa Hermosa, eight developments of at least 20 homes each are under construction: "Lots that were once $50,000 are now $500,000," he said. "There's not a lot left that hasn't quadrupled in value in the last three years."
Or, as Brad Schmidt, a local builder and an American expatriate in Costa Rica for 10 years, put it, "It's like fishing behind a tuna boat during a feeding frenzy."
HISTORICALLY, the smattering of vacation homes in Central America were mostly bargain-basement retirement houses built by older expats. A gradual identity shift began when the Central American peace accord of 1987 curbed regional political instabilities, and now it has accelerated. Vacation home developments, often financed by American investors, are going up not only in Costa Rica, which has led the trend, but in Panama, Honduras, Belize and Nicaragua. American buyers are drawn to the cheap prices for oceanfront real estate on previously undeveloped land.
"The image problem doesn't exist anymore," said Roger Gallo, founder of Escape Artiste , a newsletter for Americans that focuses on Central and South America. "There's more money to be made in foreign real estate because the prices are lower with more growth potential."
Costa Rica has the advantages of an active tourism board and a reputation as peaceful and environmentally friendly. It also has the longest tradition of democracy in Latin America.
Bill Royster, the developer behind the luxurious Sueños resort south of Guanacaste on the Pacific near the town of Jacó, said that because foreigners are allowed to own land directly, rather than through the bank-trust leases required in some Mexican property deals. "No one is going to expropriate your property," he said.
And what about that property? In Guanacaste, the jungle runs straight from the volcanoes to the sea, where it overlooks a warm azure ocean from 200-foot bluffs. Armadillos, howler monkeys, small raccoon-like pizote, parrots and the occasional jaguar make their homes underneath the broad leaves of the mango and palm trees. The foliage grows up to 10 feet a year, though in the "gold season" — a flattering term for the dry months of December through April — most trees lose their leaves, leaving the landscape barren.
Until the developers began arriving with suitcases of cash, Guanacaste was mostly the domain of cowboys called sabaneros, whose legacy lingers at local rodeos. Roads must be shared with herds of ambling cattle and are often so potholed that local people drive on the ground along the side. Yet strung all along them are signs, all in English, advertising million-dollar villas.
"It's fairly easy to develop in Costa Rica; you have a good work force at extremely cheap prices," said William Knickman, a New Jersey developer who, with a group of friends, snapped up land in Guanacaste, formed a company called Costa Rica Lifestyle Development and is now selling lots for up to $300,000 apiece. "And it's hot, very hot, as a place for people to buy. It's booming right now."
The boom can be traced back to the 2,300-acre, $400 million Península Papagayo project, indisputably the most luxurious development on the coast. It lies on land that was set aside for tourism by the Costa Rican government in the late 1970's but remained uninterrupted jungle until 1997, when Alan Kelso, a Costa Rican developer, got American financing and broke ground. Península Papagayo has a Four Seasons resort and is expected to include three more hotels and more than 1,000 luxury homes, although, at the moment, only 44 houses and condos have been built. (They're selling for $2 million to $12 million.)
In a Corner of Costa Rica, a Beachhead for Luxury
Published: February 3, 2006
"We put the region on the map," Mr. Kelso said as he sat in Península Papagayo's command center, a facility peppered with satellite dishes. He also plans a marina, a polo field and, of course, the requisite three brand-name golf courses. "The whole challenge is to create a luxury market in a country that doesn't have a culture of service," he said. "We're trying to make it a high-end happening.
Adriana Zehbrauskas for The New York Times
To shield their patrons from pitted roads and electrical blackouts, developers have paid for their own infrastructure. Grupo Mapache, a Costa Rican developer that is building more than 20,000 low-priced condos in the Guanacaste area, has spent $2.5 million on roads and sewers. Península Papagayo has not only paid for its roads, sewers, buses and electricity but has even set up its own paramedics and fire brigade.
"We sell 'Costa Rica Lite': all of the upside with none of the downside," said Jeff Klein, a sales agent for the Papagayo project. "We're our own municipality."
The owners of Península Papagayo and two other high-end developments, Hacienda Pinilla and Reserva Conchal, even paid for that critical airport in Liberia, putting up $3 million of their own money in 2002 as a guarantee to persuade Delta to start direct flights. Continental and American followed.
EARLIER efforts to develop Guanacaste were mostly underfinanced. On a road near the town of PlayadelCoco hulks the moldering 20-foot-tall concrete gate of Cacique del Mar, all that was built of a 500-acre development planned in the 1990's. Even this forlorn property has since had a change in fortune. Stephen M. Case, former chairman of AOL Time Warner, bought it in 2005, and Guanacaste is buzzing with rumors about what he plans to build on it.
At Hacienda Pinilla, hundreds of condominiums and villas are being built around 4,500 acres of nature preserve by the Atlanta-based owner, Hoover Gordon Pattillo, who bought the land as a family vacation homestead 30 years ago. Visitors to Mr. Pattillo's modest ranch, tucked inside a tree-lined grove, are greeted with a tequila-laced lemonade and a perch on a rocking chair overlooking the sunset.
"It was destiny," he said. "I had no idea what I was going to do with the land. We'd come down once a year and stay in the old farmhouse, which had no electricity or running water." In the late 1990's he began developing home sites. "We really had to work hard to sell those first villas," he said. Things have changed. Over two weeks last year, Hacienda Pinilla sold 43 Spanish colonial condomiums for $580,000 and up without any advertising.
The Costa Rica rush can carry hazards for the unwary. Jeff Hornberger, the international market development manager for the National Association of Realtors, cautioned that Americans buying in Costa Rica should be sure to buy title insurance and should be aware that real estate agents aren't required to be licensed there. "Ninety-five percent of the time we don't hear about people having problems," he said, but sometimes Americans "come on vacation and get overwhelmed and leave their brains at the border."
Many Americans who are buying now are looking for investments, eager to get in on the boom. But others simply love Costa Rica, with its warm seas and unspoiled jungle landscapes.
"This is my garden; look at this!" Jean Capezza, 59, said as she gazed down over the jungle to the sea from her perch at Reserva Conchal, an upscale golf-course-anchored development of 2,300 acres that will eventually have several hundred homes selling for $500,000 to $2 million each. Ms. Capezza, a retired administrator for Verizon in Boston, and her husband, Tony, 63, a retired public school administrator, bought a Mediterranean-style four bedroom condominium in early 2004 and spend seven months a year there.
Their house has already nearly doubled in value, but the downside of the real estate demand is the incessant grind of bulldozers nearby. The Capezzas fear more flights landing in Liberia, new condos up the hill, even the appearance of a Burger King in the nearby town of Tamarindo. "If we wanted the roads of Florida, we'd be in Florida," Ms. Capezza said. "We hope progress comes slowly. Very slowly."
In two weeks we will be on our way back to the Dominican Republic. We'll spend a few days in Santo Domingo, the capital city and the remaining time in Las Terrenas. Most of our days in Las Terrenas will be spent looking at sites for future development projects and accessing what's already there.
I'll be writing about our adventures in Las Terrenas once we get there, but I thought I'd give some background first.
Las Terrenas is located on the Samana Peninsula in the northeast of the Dominican Republic. Far away from the centers of mass tourism, the Samana Peninsula is one of the most beautiful parts of the country. Long, white sand beaches are lined by a thick belt of palm trees, a ridge of hills inland is covered with luxuriant tropical vegetation, and there are several quaint villages and towns in the area. Las Terrenas, Las Galeras and Samaná are the tourist and economic centers of the peninsula, where there are businesses, cafés and restaurants, bakeries, car and motorbike rental companies and diving schools.
In the 19th century, Samaná was still an island, separated from the mainland by a narrow waterway. The result is a diversity of very distinctive flora and fauna that are found nowhere else in the country. Clear water and fabulous coral reefs make Samaná a paradise for divers and snorkelers. The Samana bay is a prime whale watching area.
The peninsula is currently 4-5 hours drive by car or bus from Santo Domingo by country road. A motorway is under construction that will cut the driving time to 1 1/2 hours. There is also a regular ferry connection and a small airport in Las Terrenas, approached by air from Puerto Plata and Santo Domingo. El Catey International Airport, only a 30-minute drive from Las Terrenas, just opened in November 2006. Once the road from the airport to Las Terrenas is improved, the commute will be less than 15 minutes. The improvement in access to the area is one of the reasons we are so excited about the investment potential in this market.
Las Terrenas is a very lively town with a great deal of charm. Small shops, boutiques, restaurants and cafés are setting up in town. The once sleepy fishing village is a good example of "sustainable tourism"–there are no large hotel developments, and Dominicans and tourists are respectful in their dealings with each other. There is a three-story maximum height imposed on all buildings, which will preserve the charming character of the area. Tourism is just taking its first steps forward and thus offers a wealth of opportunities for positive development.
The town is situated on a wonderful section of the coast with 18 miles of sandy beaches, some of the finest in the Caribbean. Several diving schools have set up in Las Terrenas, and cars, motorbikes and bicycles can be rented. There are a number of very good restaurants that have been opened by European immigrants, and in the evenings the sounds of Bachata and Merengue drift out of the Dominican bars.
On our last trip, we stayed at the Hotel Playa Colibri, a very pleasant small resort of apartments owned primarily by US and European investors. There's a great casual dining restaurant affiliated with the Colibri, where we enjoyed freshly caught langoustine almost every day.
This time we will stay at a newly opened hotel called the Alisei. The Alisei was under construction last August, but when we learned it was developed by the same folks who run the Colibri, we thought we'd give this one a try.
I'll write all about our trip once we get there, but in the next two weeks I'll continue to give an overview of the DR, investing in the DR, and the opportunities in Las Terrenas.
I am so glad to be part of this forum, because I am surrounded by so many like-mided individuals. Being part of a team is a winning formula for success in life. I encourage everyone to take advantage of the resources, knowledge, and skill sets that are available in this forum.
Our goal with our eco-villages will be to create ecological and aesthetic harmony between the buildings and their surrounding natural environment. Going with more sustainable systems and materials has both aesthetic and practical value. The finishes we will be using will be beautiful to the eye and touch. The homes will look and feel wonderful.
So many times we've seen developers in Costa Rica take their bull dozers and clear the jungles only to build these huge concrete structures. These developments totally destroy what makes Costa Rica so unique and beautiful. We are planning to maintain as much of the natural jungle as possible in our villages by conserving the enviornment with minimal earth excavation. The roads will be packed gravel instead of concrete or asphalt to enhance replenishment of ground water.
Some of the ecological and energy conserving practices we will be using are:
- passive heating and cooling - green roof systems - water reclamation and use - sustainable materials - solar energy
Below is a rendering of one of our model homes called The Breeze. We recently got building permits with the local municipality in Costa Rica. We will be starting construction on the model homes in the next 30-60 days in Ruby Sky, Emerald Woods and Black Beauty. You can click on the image of the model home below to see the floor plan.
Many people who have been investing in the US real estate market ask, "Why invest internationally?" Since this blog is all about investing in international markets, I thought it might be helpful to share an article I thought was of paticular interest.
The cover for Fortune magazine’s October 2005 issue reads “The World’s Greatest Real Estate Investor (and what you can learn from him)”. The four-page cover story begins with the headline, “I’m Tom Barrack* and I’m getting out. *The world’s best real estate investor has made billions in the U.S. market. Now he’s cashing out and buying overseas. Should you cash out too?” The article details Barrack’s illustrious real estate career, and his amazing ability to predict market conditions. Barrack believes the 30% rise in construction costs will contribute to the deflation of the real estate bubble in the US, and that the bigger opportunity in real estate investment currently lies overseas. The article is posted on the CNN Money site.
It seems clear to me that as the US real estate market makes it more difficult to realize strong cash flow and appreciation, investors are looking at international markets for new opportunities. I know I am. I think for some investors, more education about what is available in international markets and what is involved regarding taxes, financing and legal issues will be the key to jumping in and joining the trend towards offshore investing. We hope that through this blog, you'lll get some of the information you need to consider taking the leap.
Today we moved into our new offices in Sherman Oaks, California. Fortunately the move was only from the 6th to the 5th floor. We were in our temporary offices for a month while the new space was getting built out. The place looks great! Our designers did a great job with the colors and finishes.
Here is a picture of some of the team setting up our new conference room. On the left is Noam Halpert, one of our design architects and sustainability specialists, giving instructions to Ami Dahan, CEO (middle) and Mati Timor, Marketing and Relations (right). Can you tell who the boss is?
If you are living in Los Angeles and want to know more about our villages in Costa Rica feel free to contact me to setup an appointment. We will be conducting presentations here daily.
Last year (2006), we visited Costa Rica, Puerto Vallarta, South Africa, and many other US destinations. Everywhere I go, I keep my eyes and ears dialed into what is happening with real estate.
The year before that (2005), I was just like most other people, working a 9-5 job and having limited time available for travel.
But that all changed, once I retired in August 2005. I now lead natural history tours around the world. In 2006, I took 17 clients to South Africa on two separate trips. My vision has always been to combine my interest with real estate with my skills as a natural history tour guide to create an irresistible value-added investors' tour.
I look forward to connecting with others who share my passion to experience everything the world has to offer.
