Caribbean Hotels Can Overcome Challenges, Experts Say

Caribbean Hotels Can Overcome Challenges, Experts Say

Although the Caribbean hotel marketplace is benefitting from a recent resurgence in travel and tourism, about one-third of hotels in the market—particularly independent hotels in secondary and tertiary cities—continue to struggle with revenue deficits.

A study performed by Ypartnership and the U.S. Travel Association found the Caribbean region should expect 7.4 million travelers to the region during the next 10 years. “There is no way the current capacity can handle that, so it’s encouraging,” said Adam Sacks, managing director of Tourism Economics. “The U.S. and Canada will lead (inbound) growth markets. Latin America offers significant progress, particularly Brazil. The longer-term outlook for Caribbean, as we see it, is encouraging.”

But near-term challenges remain in many forms, even for the mainstream hotels in tourist hotspots, hoteliers said during day two of the Caribbean Hotel & Tourism Investment Conference. These challenges on the ground lead to cautious optimism for developers looking to invest in the region.

“Only well-capitalized projects with unique selling points are likely to be successful,” said Raymond Campbell, partner, advisory services with KPMG. “Gone are the days when you can just put a hotel on the beach and sell sun, sea and sand.

Hugh Riley, secretary general of the Caribbean Tourism Organization, said there are less airlines looking for destinations but more regions looking for airlines to bring people. “So when you go talk to airlines you have to have money and investment figures to talk about,” he said.

Hotels in the region face increasing competition, not just from boosts in supply but also from the cruise industry. More hotel supply gives the consumer additional options at similar price points. This has hoteliers in the region scrambling for either uniqueness or brand recognition.

Instead of looking at the cruise industry as a detriment, Riley suggested understanding its benefits. He told hoteliers to look at what the cruise industry has done well and see if there are things they can mimic.