Hurricane Effects on Caribbean Hotel Industry

The region and its hotel sector was significantly impacted by two, back-to-back, Category-5 hurricanes that tore through the northern Leeward Islands in September. Hurricane Irma had the greatest effect on the islands of Barbuda, St. Barth, Anguilla, St. Maarten/St. Martin, St. Thomas (USVI) and most of the BVI; while two weeks later Hurricane Maria mostly bashed Dominica, St. Croix (USVI) and Puerto Rico.

In Anguilla, it is reported that Four Seasons will re-open April, 2018, CuisinArt in the summer, and Cap Juluca in November of next year. Ce Blue and Frangipani can open as early as next month, and Zemi Beach is ready to open as soon as there is electric power.

sandels

 

 

In the BVI, damaged hotels with scheduled re-open dates include Scrub Island (February, 2018), Sebastian’s on the Beach (Q2, 2018) and Peter Island Resort (December, 2018). Other properties such as Maria’s, Village Cay and Nanny Cay are all already partially open. On the other hand, some of the major properties such as Rosewood Little Dix Bay (this resort was already closed for renovations), Long Bay Beach Resort and Bitter End Yacht Club are all closed until further notice.

In Puerto Rico there are many well-known tourist hotels already open for business or opening in early December, such as Ritz Carlton Dorado Beach, San Juan Marriott, Condado Vanderbilt and La Concha. Others with scheduled opening dates in January include Caribe Hilton, Condado Plaza, St. Regis Bahia Beach, Sheraton Old San Juan and Sheraton Puerto Rico. The Ritz Carlton San Juan is scheduled to re-pen in April. San Juan’s hotel inventory is therefore in relatively good shape compared to many smaller islands in the region. In the USVI, most of the larger hotel resorts were damaged. Those scheduled to open in 2018 include Renaissance Carambola (March), Bolongo Bay (June), Ritz Carlton (October), Marriott Frenchman’s Cove (December), and Westin St. John (November). Those that are closed indefinitely include Marriott Frenchman’s Reef, Caneel Bay and Sugar Bay.

In St. Maarten/St. Martin, all three Sonestas are closed until further notice, as is the Westin Dawn Beach, Divi Little Bay and Flamingo Beach, amongst others. St. Maarten’s hotel inventory appears to be the hardest hit overall in terms of percentage of rooms out of commission for the long term.

Conclusions and Forecasts

It appears that there will be a significant reduction in available rooms in this part of the Caribbean through the peak of tourist season 2018 due to hurricane damage, which will likely result in lower arrivals, but buoyed occupancy rates and average daily rates. We estimate approximately 5,000 rooms that were previously open will be closed throughout the primary tourist season of 2018 (at least through April) because of hurricane damage. Otherwise, the year 2017 was turning out to be relatively consistent with the prior year in terms of hotel statistics. Arrivals were continuing to grow, showing evidence if greater usage of nontraditional lodging options such as Airbnb, VRBO and other villa rental alternatives. There remains to be some concern with the growing number hotel rooms in inventory and the number of new projects being announced, and there is a significant increase in the number of rooms currently under construction (which are generally outside the hurricane affected areas). Growth in supply could result in a longer term decline in occupancy, especially if growth in arrivals begins to slow.

 

by James V. Andrews,  

Integra Realty Resources – Caribbean

Recommended Posts

No comment yet, add your voice below!


Add a Comment

Your email address will not be published. Required fields are marked *