A little slice of paradise: foreign investors bet big on luxury tourism in the Dominican Republic.

It would seem that the Dominican Republic is more fashionable than ever. Not just because nearly 3 million tourists arrive here each year, but because some of the more recent visitors have been major foreign investors intent on coming to stay on the Caribbean island. Evidence of this is the boom in tourism mega-projects, as well as big infrastructure projects now in planning stages.

According to the government, in 2005 alone there have been public and private investments totaling US$1.8 billion in the country. Among them are the Cap Cana tourism complex, on the island's eastern side, where tourism plans over 10 years will exceed $1 billion, and Atlantica, a collection of resorts recently begun on the northern part of the island in Bahia de Luperon, where the first stage alone is expected to cost more than $150 million. Projects from U.S. hotel chains Westin and Hilton, as well as international casino operators, round out the mix of construction and investments under way.

The Cap Cana complex boasts 25 million square meters of land and eight kilometers of unspoiled beach. Developers expect to add on hotels, villas, apartments and three, 18-hole golf courses built by U.S. golfing legend Jack Nicklaus. A marina is under construction, and the company is busy selling the destination even as construction crews move earth and pour cement. "This project will raise the quality of tourism available in the Dominican Republic. It's the most important tourism project in the entire Caribbean and Latin America," says Cap Cana Executive President Victor Cabral.

In the east, too, Macao Beach & Resort--part of the Westin hotel chain--has recently broken ground on a $122 million luxury tourism investment. Why invest now in the Dominican Republic? Rick Dortch, a consultant to the Macao project, says investments of this size are a matter of confidence in the present and in the future of the nation. Also looking to capture a slice of the high net-worth market is the Westin Roco Ki Beach and Golf Resort, which will include a 296-room luxury hotel and an 18-hole golf course designed by Nick Faldo.

Foreign investors are not betting solely on the east, home to Punta Cana-Bavaro and Uvero Alto, an area three hours from Santo Domingo on the eastern coast with its own international airport, and a model for high-end tourism development on the island. They have taken Dominican President Leonel Fernandez up on his push to develop Samana-Las Terrenas, in the north, as the next Monte-Carlo of the Caribbean. On the strength of this idea, the U.K.'s Buy Bonus LTD will build a top-of-the-line hotel exclusively for couples, investing nearly $100 million. "These kinds of projects will promote the Dominican Republic to high-end consumers who seek peace and quiet, privacy and exclusivity," says Buy Bonus Vice President Sydney King.

Hilton International also has joined the international chains putting money into the country. In 2002, it created a domestic chain of all-inclusive beach hotels, called Coral Hotels and Resorts. Hilton's experience in the country so far has motivated it to build a hotel in the capital, Santo Domingo. "We believe that the Dominican Republic has great tourism potential" says Charles Muller, general manager at the Hilton Santo Domingo, expected to have opened at the end of May.

The hotel, a $40 million investment by Hilton, is directed toward business travelers and will be the highest toward quality offering of its kind in the city. The 21-story building has 228 rooms, most of which face the ocean. Another attraction of the hotel will be the Caribbean's biggest casino. Cirsa, a multinational casino operator, will open a 3,000-square-meter operation here.

Incentive. Tourism Minister Felix Jimenez says the current administration and his ministry in particular will focus heavily on developing infrastructure. Highways will be improved and new ones built, tourism areas will be revamped, new aqueducts built, as well as water treatment plants and beach renourishment projects, among others. The country needs to follow through on providing tourists with roads and clean water to make sure that the hotels keep on coming--and keep generating jobs.

"This year we're going to invest $300 million on these projects, because we recognize that they increase the value of the Dominican Republic's tourism product," says Jimenez. "We have to invest in these kinds of projects, and by doing so create incentives for private investment."

YANIRIS FELIPE, SANTO DOMINGO