Faced with a tourism industry severely affected by the economic downturn, Puerto Rico is betting that luxury hotels can spur a recovery on the island.

In July, the Puerto Rican government announced that it would help finance the development of a Ritz-Carlton hotel, investing some $342 million (€262.7 million) in the six-star hotel, the island's first.

Scheduled to open at the end of 2012, the Ritz-Carlton Reserve, Dorado Beach Resort & Spa will offer 130 "ultra-deluxe" rooms and will be based on a "connection to nature" featuring LEED (Leadership in Energy And Environmental Design)-certified building standards and generating its electricity from renewable resources on site.

Starwood Hotels is another developer with its eye on the upscale market in Puerto Rico.

It's currently gearing up for the November opening of The St. Regis Bahia Beach, which it says is nearly sold out for the December holidays already.

The resort will offer 139 rooms, 26 estate home residences and an 18-hole golf course, along with a Remede spa, oceanfront swimming pools and a restaurant from French chef Jean-Georges Vongerichten.

The St Regis comes on the heels of two other recent openings from Starwood in the country - the W Vieques and the Sheraton Puerto Rico Convention Centre Hotel and Casino - with Starwood saying that it "will satisfy pent-up demand for luxury lodging on the island."

Puerto Rico government's Secretary for Economic Development and Commerce Jose R. Perez-Riera says that luxury tourism is critical to the island's recovery.

"The Government of Puerto Rico is absolutely committed to the progress of the Islands' tourism sector," he said August 5.

"With new hotels that have begun operating over the past 18 months, Puerto Rico will expand its hospitality offerings, and enter assertively in the upper luxury range."

"This combined with our exceptional cultural; culinary; nature; sports and infrastructure offerings will yield a uniquely desirable Caribbean experience for a wide range of visitors."