DevelopmentPipelineCaribbean Hotels Trending Upward

Caribbean Hotels Trending Upward

According to PKFC’s Caribbean Trends® report, airlift continues to be a major consideration for the Caribbean hotel industry. Local hoteliers always have stressed the importance of reliable and stable airlift to the region, and in light of recent developments, such as the upcoming opening of Baha Mar and increasing levels of occupancy in the region, this has become even more important. “In order for new resorts in the area to thrive, the Caribbean is in need of increased local and long-distance, non-stop flights,” said Smith. “Many Caribbean nations still have high airport arrival taxes. However, some Caribbean nations, such as Antigua, Jamaica and the Bahamas, are working diligently to improve air travel and, as such, have recently expanded their airports.”

Another area of concern for hoteliers is the European Union’s proposed carbon tax. Under this proposal, all miles covered by international flights entering and exiting European airports would be taxed, including those originating and arriving in the Caribbean. Since Europeans account for 18 percent of inbound travel to the Caribbean, this potential increase in airfares could negatively impact overall visitation. Fortunately, the International Civil Aviation Organization meets this autumn, at which point the E.U. and other countries hopefully will come to an agreement that works for all parties.

Positive Outlook
The overall outlook in the Caribbean is a positive one, with occupancy, ADR and profits all increasing. While growth is welcome news, hotels in the region still lag pre-recession levels of performance. There also are issues, such as airlift, rising expenses, and increased competition from newly constructed properties. “The challenges that Caribbean hoteliers will face in the future are multi-faceted. If handled poorly, the recovery could be extended. However, if handled properly, all participants in the region should enjoy continued healthy increases in performance,” concluded Smith.