The Caribbean: Trending Issues and Challenges Facing Hospitality Development

By Parris Jordan Managing Director, HVS - Caribbean | August 30, 2015

The Caribbean hospitality industry continues to strengthen as hotel operating fundamentals have exhibited continuous growth following the global economic downturn that began in the last decade. The Caribbean hotel market has shown steady improvements in average rate, occupancy and RevPAR since 2010. As STR shares, Caribbean-wide average daily rate increased every year since 2011 and notably by 4.3% year to date through June 2015, compared to same period last year. And Caribbean-wide RevPAR improved every year since 2011. These trends are driven mainly be the increases in average daily rate. Moreover, with limited new supply scheduled to enter the market coupled with a favorable forecast for higher levels of tourist arrivals, the overall market is expected to continue to strengthen even further. However, the one major challenge still facing the region is the limited amount of financing available for new construction, which in turn limits opportunities for developers to build new hotels.

The Re-Emergence of the All-Inclusive

The re-emergence of all-inclusive hotels is taking great strides, as it is a fast growing sector. It seemed to fall a little under the radar, as independents and brands now have their own vacation club programs. But the all-inclusive hotel is back and better than ever with their creation of ultimate loyalty programs. Neil Kolton, Director of Resort Sales & Service for the Caribbean and Florida at Interval International, sees the all-inclusive ultimate loyalty programs to be appealing to the same demographic attracted to timeshares.

When the all-inclusive segment saw its lull, the emergence of such programs occurred in the traditional, timeshare resort; these were usually residential with the home away from home feel. Developers began selling such programs as an alternative to vacation purchases. All-inclusives have now joined in, and as Kolton has noted, it has become a very popular product offering. The all-inclusive product is similar, but it is not real estate. Rather it offers distinct amenities to customers such as special VIP privileges, early check-in and late checkout, good locations throughout the property, and at times a discount on the all-inclusive fee.

Javier Coll, Executive Vice-President & Chief Strategic Officer (CSO) of Apple Leisure Group believes that the all-inclusive hotel has long since been a trend, but is definitely now on the rise. The emergence of the high-end, all-inclusive hotel is a catalyst in such a rise. Apple Leisure Group is a vertically integrated business made up of tour operation companies, travel agencies and resort brands. Coll remarks that 99% percent of his customers chose to stay in all-inclusive resorts. Fifteen years ago, there would be a mixture between the all-inclusive and the traditional hotel, but that trend has in fact slowly faded.

Also 15 years ago, Apple Leisure Group developed the first set of high-end all-inclusives. “We believe that we are pioneers when it comes to that sector,” remarks Coll. Most of Apple Leisure Group’s all-inclusive properties are located in Cancun, Riviera Maya, Montego Bay, and Punta Cana. Interval International’s Neil Kolton also sees most all-inclusive properties in Mexico, Jamaica, and the Dominican Republic. He also sees more space for those all-inclusives to grow in areas such as Aruba and St. Maarten.

Choose a Social Network!

The social network you are looking for is not available.

Close

Hotel Newswire Headlines Feed  

Coming up in August 2018...

Food & Beverage: Millennials Rule

The Millennial Generation has surpassed the Baby Boomers to become the largest living generation in America, and their tastes and preferences are being reflected in the Food & Beverage industry. In general, Millennials insist on more natural, healthier, less-processed food and beverage sources, and in part, this inspired the farm-to-table movement. However, now the trend is becoming even more pronounced and hyper-local. Millennials no longer simply want to know their food is farm-to-table, they want to know which farm, and where it's located relative to the community. As a result, hotel F&B directors are redesigning entire menus to feature area brewers, wineries, and family farms. Not only is this a proven way to satisfy Millennial tastes but it also opens the door for hotel guests to enjoy immersive experiences such as tours and excursions to local farms and breweries. Also, thanks in no small part to Millennials, coffee consumption is at an all-time high. In response, F&B directors are creating innovative ways to enhance the coffee experience for guests. Nitro-brewed coffee, cold brew, lattes on draft, and the introduction of unique milk options are part of this trend, as are locally sourced coffee beans where available. Millennial influences can also be found in the Craft and Artisan Cocktail movement where the same preferences for locally sourced and high-quality ingredients apply. One leading hotel even offers a drink menu featuring liquors infused with herbs recommended by experts for their health and well-being benefits. The August issue of the Hotel Business Review will document the trends and challenges in the food and beverage sector, and report on what some leading hotels are doing to enhance this area of their business.