Calm Waters or Stormy Seas Ahead? Caribbean Market Trends
Given the impact that hospitality has on the construction and development sectors in the Caribbean, we should always have one eye on the performance of the region's tourism industry, to help forecast the future outlook for resort and related development.
Words by Liam Day, Managing Director for BCQS International
Given the impact that hospitality has on the construction and development sectors in the Caribbean, we should always have one eye on the performance of the region’s tourism industry, to help forecast the future outlook for resort and related development.
While tourism across the region grew steadily from 2011 through 2016, the data points to a levelling off in 2017, with the number of stayover tourists increasing by just 1.19% over the previous year.
Key performance indicators for the industry suggest this trend was continuing in the first quarter of 2018.
Stayover tourist numbers are directly linked to the availability of hotel rooms: when the Marriott Beach Resort in Curaçao closed temporarily for renovation and expansion, stayover visitor numbers for the island went down. Conversely, in St. Lucia, Jamaica, Barbados and the Dominican Republic, an increase in room inventory means visitor numbers to these destinations have risen the most.
Despite the levelling off of growth, it is still worth noting that in 2017 there were 47 million international visitor arrivals to the Caribbean, which contributed US$57 billion to the gross domestic product (GDP) of the region and supported 2.4 million jobs.
In September 2017, hurricanes Irma and Maria caused widespread destruction across the region. Twelve out of 32 Caribbean islands were affected by the storms, causing billions of dollars worth of damage to infrastructure and property, which inevitably impacted tourism.
So what does this all mean for construction and development sectors? Good news! New hotels continue to be built across the region and the number of resort projects either in planning or under construction is unprecedented. There are currently 83 new projects in the pipeline which will create over 19,000 new hotel rooms.
The growth in stayover tourist numbers has a knock on effect for infrastructure, necessitating the expansion of airports to accommodate increased arrivals. Airport expansions have recently been completed in St. Vincent, Antigua, Bahamas and San Juan, are currently underway in Cayman, Curaçao and Sint Maarten and are planned for Aruba, the British Virgin Islands and Tobago.
Along with new resort developments and infrastructure works, there are significant re-building efforts underway in the islands affected by the hurricanes which, based on known damage and expected building timeframes, are forecast to take up to four years to complete. All this should ensure the construction and development sector remain buoyant and busy for the foreseeable future.
Despite the hurricanes, the Caribbean is recovering and, provided the region can market itself effectively and stimulate further growth, it should make for vibrant construction and development sectors. It really does looks like calmer waters ahead.
To learn more, contact BCQS:
Statistical Information provided courtesy of the Caribbean Hotel & Tourism Association (CHTA) and Smith Travel Research (STR).
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