Occupancy Declines Should Not Derail Caribbean Visitor Growth

The state of travel to Caribbean destinations presents a mixed picture as 2019 winds down. Several regional nations are reporting strong 2019 visitor arrivals, even as recent data from travel research firm STR shows Caribbean hotel occupancy declined significantly this between April and August of this year.

In some cases, occupancy shortfalls were predictable. The Dominican Republic, for example, struggled to overcome intense media coverage of tourist deaths this summer. Nevertheless, the occupancy downturn created significant concern as Caribbean nations are poised to realize unprecedented tourism growth.

We spoke with Frank Comito, CEO and Director-General of the Caribbean Hotel Tourism Association (CHTA) to discuss the occupancy declines as well as the short- and long-term tourism forecast for Caribbean destinations.

TravelPulse: Travel research firm STR recently said Caribbean hotel occupancy is declining. Is this a long-term trend?

Frank Comito: It’s too early to say. We do know that there has been a slowdown in tourism activity globally over recent months, so it may be an early indication of something broader going on.

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TP: What do you attribute this to?

FC: While we saw a marginal decline in occupancy for the region in aggregate this summer, ADR and RevPar year-to-date are still running ahead of last year at a very healthy clip.

Also, when one looks at this summer’s hotel performance, more Caribbean destinations are showing positive growth in occupancy than those which are showing a decline, and most of which have declined have only done so marginally. The aggregate is affected by several destinations with large room inventory which experienced declines.

TP: Are other factors impacting the Caribbean hospitality market?

FC: We cannot discount the ongoing impact which vacation home rentals are having on hotels. While they provide consumers with added choices, we remain disappointed that not enough destination governments have moved to tax and regulate this growing sector.

This not only creates an unfair playing field, but it also is a tremendous lost opportunity for financially strapped governments to raise revenue, and to put in place standards to protect the guests and the reputation of the destinations. The hurricanes are a perfect example of why regulation is needed, as many guests in vacation home rentals are left stranded with no or little direction and are not afforded the same consideration as those staying in hotels.

TP: What Caribbean destinations have suffered the biggest recent occupancy and RevPar declines?

FC: The Dominican Republic and Cancun experienced declines this summer, largely attributed to the negative publicity, often inaccurate, that they received. With the DR, it was a barrage of negative, mainly unsubstantiated, reports on the unfortunate deaths of several guests. Cancun was faced with sargassum which affected some areas, with the unfortunate perception that it was affecting all areas.

TP: What destinations will be challenged going forward by the Thomas Cook failure?

FC: The industry is working aggressively to counter the impact and there are encouraging signs that the anticipated worst will not materialize. Those with a high level of business coming through the UK and Europe were Barbados, Jamaica, Cancun, and the Dominican Republic.

The Condor arrangement softens the impact out of the Continent where more than half the region’s arrivals through the Thomas Cook Group would’ve originated. Destinations and hotels are working aggressively to provide alternative offers. Barbados, for example, may indeed see a net increase in air passenger seats as a result of alternative arrangements and new airlift they are putting in place.

TP: What are your occupancy and RevPAR (revenue per available room) expectations for the region as a whole for 2019?

FC: It’s hard to crystal ball this. Internally, the region is positioned with more accommodations offerings and variety of offerings than it’s ever had, and we should end the year with a record number of arrivals.

We’ve received a mixed bag of reporting regarding anticipated bookings into early winter. There is still an unfortunate perception that the entire Bahamas was impacted by Hurricane Dorian, when in fact over 80 percent of its tourism product was untouched, including Nassau, Paradise Island and many of the popular Out Islands. So we expect fourth-quarter results will be down from the record-breaking pace The Bahamas has been on for the previous 18 months.

Overall, barring anything else unforeseen, we should see the region’s occupancies show a slight decline; RevPar and ADR should be slightly ahead of last year, and overall arrivals slightly ahead.