But what about the impact of the opening of Cuba?
Caribbean hotel rates are continuing push towards the peak seen before the global recession, mainly due to a lack of new builds, according to research presented at the Caribbean Hotels and Tourism Association Marketplace in Puerto Rico.
Average daily rates in December 2014 reached $195, compared with the peak of $201 in January 2008, US research firm STR Analytics revealed. STR, which receives data from a third of all of the Caribbean’s properties, found average occupancy was 68%, compared with 70.4% at the pre-recession peak.
“We are seeing a lot of demand in the marketplace,” STR Director Steve Hennis said, adding that the supply of rooms was growing at only 0.8%, compared with around 2% in the US. “It’s less than half the norm and that’s pushing the bar.”
He warned that occupancy was “hitting a threshold” that would means rates would only increase. “If you assume that 69-70% occupancy is your peak, given the seasonality, the next part of growing your hotel business is to raise your room rate.”
STR estimates that the Caribbean has only 15 firm hotel construction projects, although another 25 are at the planning stage. Significant openings include the Baha Mar in The Bahamas with 981 rooms and the Grand Hyatt Baha Mar with around 800 rooms, plus Jamaica’s Grand Palladium with 850 rooms. Such large properties will need an increase in airlift to fill them, Hennis said.
The effect on the region of the opening of Cuba to more US tourism is difficult to assess, he admitted.
“It would be nice if something had happened elsewhere to compare, but nothing with that proximity to the US has happened.”
A lot of hotel brands have been in touch asking for information about the destination, he said. “It could be that a lot of hotel companies will lobby the government to open it more quickly.”
[pictured: Sandals Royal Caribbean Resort; courtesy Sandals Resorts International]