Caribbean Hospitality Summit Draws Record Numbers

Bisnow Caribbean Hospitality

 

Investor Sentiment For Rebuilding The Caribbean Region Remains Strong

 

Miami, Florida – The Bisnow Caribbean Hospitality and Tourism Summit held on August 1, 2019 at the Intercontinental Hotel in Miami drew over two hundred investors, developers, hotel operators and other industry professionals.  

Sponsored by the Puerto Rico Builders Association, this “not to miss” investor event celebrated its 3rd year.  Special shout out to Katya Demina for her help in making the event such a great success. Join us for more events at AG&T. 

Strong turnout at the first 2019 ULI Caribbean Roundtable Panel

Strong turnout at the first 2019 ULI Caribbean Roundtable Panel.
Presentations by Emilio Colon Zavala, President of the Builders Association of Puerto Rico, Ricardo Alvarez Diaz of AD&V, Robbie Karver of EY and chaired by Adam Greenfader of AG&T. Big Shout out to Julie Medley, Mallory Baker, Max Helden and the whole ULI Southeast Florida team for putting this amazing event together.

 

 

 

Some of the biggest takeaways:

  • Growth is forecasted at a 8.1% with growing airlifts. In spite of the tumultuous 2017 hurricane season, the occupancy rates were around 65% in 2018 and should peak back up to 70% across the region in 2019.
  • Access, Access, and Access continues to be the principal driver for hospitality. 
  • “The Caribbean region today is seen as a maturing destinations with more diversified land offerings”, quoted Robbie Karver.
  • Looming recession talks in US was downplayed for the Caribbean region as the lack of a significant of new supply (compared to 2008) should help bolster the region.
  • Caution was noted about citizenship programs (CIP) for several Caribbean governments not necessarily generating revenues as expected.
  • Smart money is looking at Puerto Rico with lots of incentives for tourism development, tax benefits for those wanting to move/start business on the island (law 20/22), and billions of dollars of recently approved US Federal grants. 95% of Puerto Rico is an Opportunity Zone. 
  • Institutional capital seeking better rates than on the US mainland although Caribbean hospitality lending is ‘cautiously optimistic’ with focus on shorter ramp up period of less than three (3) years.
  • There is strong demand for world class Marinas and for Big-Big yachts.
  • Resiliency is getting into new developments and is having very little negative effect on the IRR.

Other Events 

The roundtable conversation highlighted a series of events that will be taking place in 2019 (email adam@agandt.net for a full schedule).

  • MAY 2, ULI MEMBER APPRECIATION SOCIAL & POST TOA BAJA PANEL UPDATE (Puerto Rico).
  • AUG 1 CARIBBEAN HOSPITALITY SUMMIT – PR BUILDERS (Miami)
  • OCT 23-25 ULI Mexico – Latin America Conference (Cancun)
  • NOV 14 PUERTO RICO BUILDERS ASSOCIATION CONFERENCE (Puerto Rico)

Vision Awards

ULI will be highlighting development projects of excellence at its Annual Vision Awards Event which will be held on September 5that the JW Marriott Marquis. If anyone would like to submit a Caribbean project please contact Mallory.Barker@uli.org

Coming Next

For the next roundtable the following items were discussed as potential areas of interest:

  1. To discuss a list of hospitality projects that are getting funded in the Caribbean Region, share details on projects and the funding
  2. Bahamar project and case study
  3. Sources of hotel financing and the interplay of mezzanine financing
  4. The synergy of luxury cruise ships and private islands
  5. The business of Cannabis in the Caribbean
  6. The effect of Hurricanes on hotel supply and competition
  7. Sargassum seaweed and its adverse effects on the region

This first meeting was open to ULI members and guests.  Subsequent roundtables will require membership for participation.  Please email Max.Helden@uli.orgif you need details on joining.

Join us at the CUNY Reconstruction Conference – Puerto Rico 10.5.18

 

Reconstruction Conference Puerto Rico 

October 5, 2018, 

As of today, supplemental appropriations for disaster relief add up to a total of $136.1 billion, The Center for Puerto Rican Studies at Hunter College, CUNY, the UPR Graduate School of Planning will convene an event to discuss these opportunities. Currently, an estimated $30 billion of these funds has been distributed, allocated, or obligated for recovery efforts in Puerto Rico. In addition to funds earmarked for disaster relief, there are other federal programs that provide financial support to economic development and could be combined with disaster relief funding to make feasible economic development projects. 

Core federal programs supporting economic recovery in Puerto Rico after the catastrophic impact of Hurricanes Irma and Maria include: 

1. CDBG-DR: The Community Development Block Grant (CDBG-DR) Program may fund a broad range of recovery activities. As of today, $1.5 billion have been allocated as part of the first CDBG-DR grant. The period for public comments to the CDBG-DR Action Plan ended on May 25, 2018 and HUD will respond to public comments by August 1, 2018. A similar process will take place for the other CDBG-DR funds awarded to Puerto Rico totaling $18 billion. 

2  Opportunity Zone: Puerto Rico has been designated as an opportunity zone. Investor in Qualified opportunity funds intended to target economic development and job creation in poverty areas are offered partial exemption for short and long-term capital gains taxes, full exemption of all capital gains if investments are maintained for 10 years. 

3. HubZones: The HUBZone program, run by the Small Business Administration, allows small businesses to obtain government contracts without the “full and open competition” normally required, gives preferential consideration to those businesses in full and open competition and makes businesses eligible to compete for set-aside contracts. On a per capita basis, the total dollar value of federal contracts performed in Puerto Rico is less than in any U.S. jurisdiction, other than American Samoa. Additionally, 6 out of 10 federal contracts performed in Puerto Rico are awarded to firms outside of Puerto Rico rather than local businesses. 

4. Low Income Housing Tax Credits (LIHTC): The LIHTC program is one of the largest sources of new affordable housing in the United States. The program provides tax incentives to encourage private and nonprofit developers to create affordable housing projects. The Puerto Rico Housing Finance Authority (PRHFA) announced a total estimated annual allocation for 2018 to 2020 of $16,038,934 with set-asides of $2,353,698 for nonprofit and $13,685,035 for other projects. 

5. New Markets Tax Credit (NMTC): The NMTC program incentivizes community development through the use of tax credits to attract private investment to qualified low-income communities. Financial intermediaries such as banks, developers, and local governments can qualify to become Community Development Entities (CDE). NMTC investors receive a tax credit against their federal income tax in exchange for making an equity investment in a CDE. 91% of Puerto Rico’s census tracts are NMTC eligible, and 44% of those are also designated “Hot Zones.” However, the program is not heavily utilized in Puerto Rico. Prior to 2016, NMTC investment in Puerto Rico totaled around $110 million dollars, approximately .3% of the total NMTC investment. 

6. USDA Rural Development Programs: The US Department of Agriculture offers several programs to facilitate and fund development of rural areas. Rural communities are often affected by geographic isolation, low-density settlement, and limited investment activity from the private sector. The USDA offers grants and loans, and these could be combined with other federal programs to make rural housing and community development programs financially feasible. USDA programs are underutilized in Puerto Rico. 

Micro Apartments: Redefining Functionality

As the idea of developing micro units becomes more prevalent, we must rethink how to functionally furnish them within a limited amount of space. The size of a micro units is typically less than 350 square feet and just like any other unit, the kitchen and bathroom are permanently fixed. Due to the smaller size you can’t fit a standard, bed, couch, dining table set or even store your other belongs efficiently. So, if developers want to sell or lease micro units they must provide potential consumers with hassle free furniture and storage solutions.

Resource Furniture (https://www.resourcefurniture.com), a distribution company specializing in functional multipurpose furniture for small spaces, is committed to raising the bar when it comes to furniture functionality, quality and sustainability. Their furniture ranges from murphy style beds that transform into desk and seating area that can be used for everyday task.

Advances in technology are also assisting with the way we can furnish micro units. Powered by modular robotics, Ori (https://www.orisystems.com) is a modular system that includes a full or queen-sized bed, closet space, a desk and much more, developed by a start up from MIT’s Media Lab and designer Yves Behar. With the simple touch or voice command, this system seamlessly allows you to adapt the space in your unit for any activity. The Ori system can be installed in both existing and new buildings and can be assembled on site and can be plugged into a conventional electrical outlet.

Besides the attractiveness of space conservation, incorporating hassle free modular or transforming furniture will allow developers to charge consumers a higher premium for furnishing the unit. Both parties benefit and the consumer will be satisfied knowing that they can live comfortably and efficiently in a smaller unit…and might never have to “make the bed.”

Sustainability at the heart of hotel design in the future

Green Hotels

Sustainability has been a buzzword within the design community, and hoteliers have been latching onto the idea of the past number of years

Sustainability has long been a buzzword within the design community, and hoteliers in particular have been latching onto the idea of the past number of years. Not only is it a response to an increased awareness of climate change and the impact we as humans, especially those working in one aspect of the construction industry, have on the planet, but it is also a response to client demand, with more and more guests desiring sustainable tourism as a requirement in their holidays. An annual competition run by hotel consultancy firm the John Hardy Group called Radical Innovation Award takes submissions for innovative hotel designs that reimagine the hospitality experience, and this year’s entries and winners point to a significant upswing in sustainable hospitality that could well be the future of the industry.

The award has singled out a number of visionary projects as finalists, but many of the entries proposed radical ideas that threw out the rulebook of hospitality design. A common theme was that of sustainability, both in an environmentally friendly sense, but also in a cultural sense, where local culture and art is celebrated and promoted. This also points to recent trends in hospitality where local experiences are being sought by guests wishing to engage more with the place and people they are visiting.

Green or garden hotels were a big feature of a number of entries. Canadian firm Arno Matis Architecture proposed a project entitled the “Vertical Micro-Climate Hotel”, whose concept is to make the outdoor areas of hotels located in the harsh climates of North America habitable all year round. One of the features of this hotel was the use of heliostat technology, a mirroring system which reflects sun back into certain parts of the building as required so as to make them habitable even in colder weather conditions. EoA’s submission involved suspending hotel facilities from a treetop by using a system of cables to hold rooms in tent-form above a trampoline-like platform, giving the hotel a very small footprint above the forest floor and re-orientating the guest’s field of vision to that from the tree canopy. A Dutch architecture student submitted a project that he had built in his mother’s back garden which connects guests to nature while allowing them to sleep in a sustainably built and naturally ventilated structure.

The culturally sustainable aspect came in the form of the currently-operational Play Design Hotel in Taiwan, which champions local artists and designers by installing their creations into hotel rooms and encouraging guest to interact with them. The idea came about after the developer noticed a lot of his artist friends were having to go abroad to showcase their designs, and he thought that it would be better to not only exhibit the work locally in hotels so that international guests could see them, but also to cultivate an environment of design engagement within the hotels themselves. “I want people to experience the culture of this country and played a lot with the idea of using the hotel as a portal for people who want to learn about Taiwanese design, a space that is furnished with all of these local designers’ work. So, their work is not only shown but so it’s experienced. Design isn’t something you only put in a museum or gallery. It should be used. It’s for your everyday use,” says hotelier Ting-Han Chen.

 

Article by Hospitality.net.