Cautious Caribbean Sees Good Hotel News

The worst is over for the Caribbean hotel industry, panelists said during last week’s opening general session of the Caribbean Hotel & Resort Investment Summit.

Jim Burba, president of Burba Hotel Network and chairman of the annual event held at the JW Marriott Marquis Miami, told attendees there is more “positive energy coming out of the Caribbean than there has been in a long time.”

Burba said 73% of attendees who responded to a preconference survey believe revenue per available room in the region will increase during 2013; 53% said money for new construction will rise in the upcoming year.

The optimism was backed up by presenters in the opening “Outlook for the Caribbean” session. Warren Jestin, senior VP and chief economist for Scotiabank, said the driving force is the growing U.S. economy.

Amanda Hite, president of HotelNewsNow.com parent company STR, said the region’s performance data has improved across the board. According to STR, there are 1,882 hotels comprising 223,176 guestrooms in the Caribbean and the year-to-date performance (through March) was encouraging for hoteliers:

Occupancy rose 4.2% to 75.9%;
Average daily rate increased 9.7% to $223.47;
RevPAR jumped 14.4% to $169.64; and
Room revenue climbed 14% to $3.4 billion.

Hite said ADR in the Caribbean picked up sharply and turned positive in June 2010 and occupancy stayed flat until April 2011. While demand slowed slightly in 2012, rate remained steady.

STR data shows there are 47 hotels in the active pipeline in the region—including 27 that are under construction and will open during the next 18 months, according to Hite’s presentation (free registration). Leading the way is the Bahamas, which has five projects with nearly 2,300 rooms in the pipeline—including Baha Mar, the $3.5-billion, 2,200-room property scheduled to open in December 2014. The Dominican Republic has 10 projects with 2,600 rooms under construction.

The level of the construction pipeline bodes well for the individual economies of the approximately 25 countries located in the Caribbean.

David Scowsill, president and CEO of the London-based World Travel & Tourism Council, said growth is important because tourism is the primary industry for many of the island nations. He said 14% of the region’s gross domestic product is derived from travel and tourism.

Source: Hotel News Now