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    16ª Edición de el Soul Beach Music Festival en Aruba
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    Aruba passes unprecedented law to foster healthy balance of on-island accommodations

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    Aruba passes unprecedented law to foster healthy balance of on-island accommodations
    Aruba Accommodations

    Aruba has modified The Permit Law to regulate all-inclusive activities on-island – an unprecedented action in the Caribbean and significant move in the tourism industry globally. Following the local Government’s proposal in May to foster a balanced portfolio of accommodations, the island will cap the share of representation of all-inclusive accommodations at a maximum of 40 percent of the total transient hotel rooms.

    Also as of August 2016, the Government will place an annual 20 percent cap on all-inclusive room nights sold by European plan hotels. The new law defines seven accommodations concepts* and all are subjected to a permit system with a 20-year duration.

    “Given Aruba’s high level of dependence on the tourism industry, which according to the World Travel & Tourism Council ranks No. 1 in the Caribbean and No. 2 in the world relative to size, we believed it was imperative to formulate policy that best meets the island’s general interest and to re-address policy in respect to accommodation providers on island,” said Otmar Oduber, Aruba Minister of Tourism, Transportation, Primary Sector and Culture. “The new regulation will ensure all actors remain active in the tourism industry and will allow for a healthy contribution to Aruba’s GDP, currently 91 percent reliant on tourism and travel.”

    As part of the “Grandfather Right” – hotels that prior to May 9, 2016, have been operating as all-inclusive resorts are automatically granted the permit for 20 years. Additionally, a hotel that has not offered more than 20 percent of its inventory to the all-inclusive segment will remain with the permit to continue operation. And hotels that are not exclusively all-inclusive resorts but have allocated more than 20 percent of their inventory for all-inclusive packages will have two years to scale down to the maximum 20 percent.

    The Law’s Ministerial Decree grants the Minister authority to give exemption from the 20 percent rule in certain cases – for instance when a hotel is hosting a large conference as part of the MICE segment or when a hotel or accommodation can prove that overall room nights will decrease compared to the previous year if an exemption is not granted.

    “Aruba’s goal is not to completely eliminate all-inclusive resorts, as we understand this market is considered to be the fastest growing segment of the leisure travel industry in the next 10 years,” said Ronella Tjin Asjoe-Croes, CEO of Aruba Tourism Authority. “Rather, our goal is to remain competitive and create balance, while re-evaluating the policy every five years to ensure Aruba’s best interests continue to be met. Ultimately, a healthy mix of on-island accommodations is crucial to the success of Aruba.”

    Alternative accommodations are also a key component to this balance.

    “Aruba embraces the concept of ‘sharing economy’ and is exploring areas where the sharing economy will add value to the community as well as the visitor,” said Tjin Asjoe-Croes. “As part of this proactive approach, we have entered into discussions with AirBnB Inc. to formalize a relationship with the online community. Our goal is to work together to drive more sustainable and unique tourism to the island, help make Aruba a regional leader in the sharing economy and continue to position Aruba as a world-class tourist destination.”

    Of the 5,540+ transient rooms on-island currently, 66 percent are in European plan hotels, whereas 32 percent are in all-inclusive resorts. This mix has effectively served as the foundation of Aruba’s overall tourism industry development.

    Aruba’s government and tourism officials conducted the necessary analyses and formulated actions that specifically impacted the future of the destination’s all-inclusive sector. The vision for a balanced mix of accommodations stemmed from research derived from more than 13 publications, suggesting a correlation between all-inclusive resorts and a decreased effect on local spending and immersion in local culture.

    Aruba Tourism Authority (ATA) also conducted consumer research to measure Aruba’s brand health and equity among both the U.S. and Canadian international travelers who have visited at least one Caribbean destination and/or Mexico in the past five years. As a key takeaway, the offering of all-inclusive accommodations is significantly less relevant to travelers than the quality of Aruba’s beaches, natural features and local culinary experiences.

    “As a destination proactively seeking an increased share of affluent visitors, who will enjoy Aruba’s dynamic culture and culinary scene influenced by more than 90 on-island nationalities, we had a responsibility to analyze and apply this research to Aruba’s policy,” said Oduber. “These measures ensure Aruba’s continued fruition.”

    Following a record-setting year of 1.07 million stay-over visitors in 2014, ATA reported total arrivals in 2015 increased by an additional 14.3 percent, totaling 1.22 annual stay-over visitors. Most Caribbean islands saw a 3-10 percent increase in annual stay-over arrivals from 2014 to 2015.

    Aruba’s hotel sector also showed growth last year. Total visitor nights grew by 8.3 percent in 2015, while ADR increased by 2.7 percent to $237.39. Aruba’s RevPar has steadily increased over recent years, from the No. 8 overall Caribbean ranking in 2011/2012 to No. 7 in 2013 and No. 6 in 2014/2015 – and specifically in 2015, it increased by 1 percent to $191.10, which according to STR is higher than the Caribbean average of $158. 

    In addition to receiving more visitors, Aruba saw an increase in their spending in 2015. Tourism receipts increased in 2015 by 2.8% as compared to 2014.

    *Seven accommodations concepts include: timesharing; accommodation (room usage vs. payment); accommodation night (one-night stay-over visit); all-inclusive accommodation (stay includes food and non-alcoholic beverages with/without full access to one or more recreational activities); all-inclusive hotel (exclusively offering all-inclusive accommodations); all-inclusive inn (establishment of maximum 10 rooms offering all-inclusive amenities); all-inclusive permit.