Caribbean Hotels Put Good Numbers, Profits on the Board

In its first-ever report on the Caribbean hotel industry, PKF Hospitality Research finds that Caribbean hotels continue to be profitable for owners and operators due to increasing rates of travel to the region spurred by a strong U.S. economy.

In 2005, Caribbean hotels averaged $111,414 per available room (PAR) and $25,541 PAR in profits. The net result was a 22.9 percent profit margin.

These observations come from the recently released 2006 edition of Caribbean Trends in the Hotel Industry published by PKF Hospitality Research (PKF-HR), an affiliate of PKF Consulting.

A substantial portion of this profitability can be credited to the tremendous growth in Caribbean travel. Over a three-year period, from 2003 through 2005, the number of visitors to the Caribbean has grown by a total of 19 percent.

The 2006 Caribbean Trends in the Hotel Industry report marks the first annual review of Caribbean hotel operations conducted by PKF-HR.

Room´s revenue represents 51.4 percent of the total revenue earned by the sample of Caribbean hotels. The relatively low contribution of rooms revenue is attributable to the high representation of resort properties in the Caribbean.

The unusually high revenue from Other Operated Departments, which is 18.7 percent of total revenue, reflects the extensive recreational and retail services offered at resorts in the Caribbean.

In 2005, the cost of utilities was 6.3 percent of total revenue, nearly two percentage points higher than that of similar United States resort hotels.

PKF Hospitality Research indicated that there continues to be an ample supply of money available for hotel lending and equity investment.

PKF Hospitality Research (PKF-HR), headquartered in Atlanta, is the research affiliate of PKF Consulting, a consulting and real estate firm specializing in the hospitality industry.