In January 2020 the Caribbean Hotel and Tourism Association conducted its fifth annual Industry Performance and Outlook survey. This was undertaken to assist the organization with gaining a better understanding of the state of the tourism economy, its outlook, and the degree to which a number of factors impact or may affect the tourism industry. Following is a summary of key findings:
Assessing Hotel Performance in 2019 vs. 2018, outlook for 2020:
• Tourism Continues to Stimulate Job Creation – nearly 49% reported employment up, 35% reported maintaining existing levels
• Sales/Revenue – 60% reported sales/rev up, down from 76% last year
• Capital Spending Up for 9th Consecutive Year – two-thirds reported an increase in CapEx (increase over last year, where 61% reported an increase)
• Most hotels reporting some increase in ADR and occupancy
• Profit expectations about the same as last year 79% expect net profit, 21% expect loss
• Outlook for 2020…Remains strong
Record ADR, RevPar and Revenue in 2019 According to STR, the region experienced a record year’s performance with ADR toping $217, up 6.9 percent from 2019 while RePar increased by 3.3 percent and overall rooms revenue was up 5.7 percent. More than half of the destinations also experienced an increase in occupancy rate.
International Arrivals to Region on Track for Record Year
Stopover visitor arrivals to the region were expected to once again top the 30 million mark. Final results from the Caribbean Tourism Organization are not expected until the first quarter 2020, but the year’s trendline points to a likely record year. As of November 2019, international tourist arrivals growth was recorded in 22 destinations, while declines were recorded in four. Three of the five reporting destinations registered increases in international tourist trips of 91.0% (St. Maarten), 7.6% (Saint Lucia) and 2.3% (Grenada). The remaining two destinations, Cuba and the Dominican Republic, registered decreases of -8.5% and -1.5%, respectively.
Airlift Continued to Grow in 2019 and Modest Growth Anticipated Early 2020
With more than 10,000 new hotel rooms added to the region’s inventory in 2019, plus an estimated 80,000 vacation home rentals, airlines tapped into the increased demand, adding new flights and increasing aircraft size. Data from OAG indicates that demand for travel to the Caribbean during the first quarter of 2019 increased in available seats by 1.2%. The region attracted 12.4 million international seats attracted to the region during this time. The fastest Q1 growth destinations for airlift were: St. Maarten, up 88.9%; the U.S. Virgin Islands, increasing by 48.7%; Puerto Rico, showing a 16% jump; St. Kitts & Nevis up by 11.8%; and Jamaica growing 9.8%.
The tracking group Forward Keys also forecasted at year’s end continued growth in airline bookings, showing an increase of 1.6 percent.
Caribbean Room Supply Growth
According to STR, as of December, 2019 the Caribbean’s tourism-grade room supply stood at 259,335 up from 256,823 in 2018. At the close of the year approximately 29,703 rooms were in various stages of development, with 13,033 room under construction and 10,380 in final planning.
Tourism Performance Impact from Recessions, Major Hurricanes and Zika
Overall, the Caribbean experienced an exceptional 2019, with air arrivals and hotel performances exceeding the global average. Downturns are cyclical and the industry must be better prepared to mitigate their impact. The chart below shows the industry’s performance over 20 years, illustrating what has happened to visitor arrivals when faced with recessions, major hurricanes and a periodic health threat like Zika.