Crisis in Paradise: Meltdown Leaves Ghost Resorts in Caribbean

The ocean glows a milky turquoise. Tiny waves lap at the powder-beige sand, in no rush to reach the line of postcard-perfect palm trees.

Hundreds of luxury villas are positioned to take in the view, but there are no guests. There are no roofs either; neatly tied bundles of red tiles are stacked outside. The wind slams doors and rustles the yellowed newspaper taped to the windows.

The paralyzed work scene at the Cap Cana resort, a development including four luxury hotels, three golf courses and a mega-yacht marina, is a victim of the global financial crisis that has hit the Caribbean’s tourism industry especially hard.

Cap Cana fired 500 workers last month after Lehman Brothers declared bankruptcy and a $250 million loan fell through. Talks to re-negotiate a $100 million short-term loan collapsed last week, and more layoffs are expected.

Construction is also paralyzed at the Ritz-Carlton Molasses Reef resort in secluded West Caicos, where 60 Chinese workers revolted last month to demand back wages. About 160 workers have been sent home to China, and it’s unclear when construction will resume at the hotel, marina and condominium project, which is three-quarters complete.

This month, the sprawling Atlantis resort in the Bahamas laid off about 800 workers, citing low occupancy rates. Baha Mar Resorts Ltd. laid off about 40 employees at its Sheraton Resort in the Bahamas and 40 more at the Wyndham Nassau Resort. The Bahamas Hotel Catering and Allied Workers Union have called a demonstration Thursday to demand government aid.

In Puerto Rico, the Caribe Hilton laid off more than 50 people this month because of rising costs and sluggish occupancy rates. The last time the hotel had to lay off workers was after the Sept. 11 attacks, General Manager Jose Campo said.

Cap Cana plans to fire another 1,000 workers in the coming months, according to a company official who spoke only on condition of anonymity because he wasn’t authorized to release the information. But Cap Cana President Ricardo Hazoury said he expects the project to go forward as the company outsources certain services.