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Contributed by Bruce Serlen
Amid Puerto Rico ’ s US $ 72 billion debt crisis , developers on the Caribbean island have been weighing the effect of the economic distress on attracting and retaining investment capital for hotel and resort projects .
On June 29 , the U . S . Senate passed a much-debated rescue bill that put in place a mechanism to force a compromise between Puerto Rico and its bondholders to resolve the crisis . A day later , President Barack Obama signed the measure into law . But that wasn ’ t enough to prevent the island from missing a nearly $ 800 million debt payment due on July 1 . Puerto Rico thus became the first U . S . state or territory to default on paying general obligation bonds since 1933 .
Add to the two-anda-half-year-old crisis the threat posed by the Zika virus , and developers face another potential crisis as travelers , especially leisure and corporate group customers , steer clear of the U . S . commonwealth .
To counter fears of the virus , the island ’ s convention and visitors bureau has focused on eliminating
mosquito breeding grounds and training health professionals , among other steps .
In the meantime , analysts and consultants are cautioning developers and investors not to overreact to the debt problem . “ The issue is not whether the financial troubles have had an impact , but whether the media coverage has been fair and balanced ,” says
" The issue is noT wheTher The financial Troubles have had an impacT , buT wheTher The media coverage has been fair and balanced ."
JoSe Joaquin Villamil , chairman and ceo , eStudioS-technicoS
Jose Joaquin Villamil , chairman and CEO of Estudios-Technicos , an economic and planning consulting firm , and former chairman of PonceBank . “ There is no humanitarian crisis of the scale that some news reports have described .”
Puerto Rico ’ s worst days may be behind it , says Daniel Lesser , LW Hospitality Advisors , New York . “ While the island ’ s economy has been in recession for a decade , at this point it can hardly get any worse . Consequently , it ’ s not a matter of if , but when , the island ’ s solvency problems are finally dealt with ,” he says .
Consistent with this , Lesser has not seen a spike recently in single lodging asset sales in Puerto Rico .
Villamil , meanwhile ,
10 hotelsmag . com July / August 2016