Puerto Rico positions itself for tourism boom

updated 3:20 p.m. ET Jan. 17, 2007

SAN JUAN, Puerto Rico - Bride-to-be Megan Ziemba was weighing two Caribbean oases for her winter wedding when the U.S. government stepped in and tipped the balance.

In Puerto Rico, the 27-year-old could get married in a colonial mansion of her dreams - and her American guests wouldn't have to worry about new U.S. passport rules that are promising headaches for the more than 70 percent of U.S. citizens without one.

Starting Jan. 23, American air travelers accustomed to visiting the islands, Mexico or Canada with only a driver's license will need a passport when they return home. The rule kicks in for cruise passengers and drivers in 2008.

"We have a lot of family coming down, and I know they don't have passports," said Ziemba, a financial analyst from New York.

So Ziemba, who had been tempted by a mountainside resort in St. Lucia, chose the cobblestone streets of Old San Juan for her wedding instead. Many of her guests plan to spend a week and take in the island's old Spanish forts, palm-lined beaches, and jungle rain forests.

FACT FILE Passport rule changes What travelers need to know about new regulations

Puerto Rico has been aggressively branding itself a no-passport destination with a $36 million advertising campaign on the U.S. mainland, and the U.S. Virgin Islands has labeled itself "America's Caribbean."

But while those U.S.-administered islands are expecting a windfall from weddings and impulse travelers, their tourism-dependent neighbors are sweating.

The new passport rules, designed to increase U.S. border security, have conjured fears of economic ruin in the island nations. Their governments have lobbied Washington for a deadline extension, and their tourism boards have launched campaigns encouraging Americans to apply for passports and keep them up to date.

Analysts say Puerto Rico will likely experience a jump in bookings, at least initially, with losses expected elsewhere.

A 2005 study commissioned by the Caribbean Hotel Association found the passport rule change jeopardized as much as $2.6 billion in tourism revenue and 188,000 jobs in the region.

Those prospects - and Puerto Rico's and the U.S. Virgin Islands' campaigns - have also aggravated rivalries in the region's $23 billion tourism industry.

"The technical term is breaking ranks," said Basil Smith, director of Jamaica's tourism board. "I do recognize their tremendous competitive advantage, and frankly I wish Jamaica had such a competitive advantage."

The staggered implementation of the passport rule is good news for Americans planning cruises this year and those within driving distance of Canada or Mexico, but it's galling to island governments.

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