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Regional second-home market rebounding

Although evidence at this point is mainly anecdotal, experts say property inventories are going down in the region. However, the industry is staying with "tried and true" second-home destinations. 

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TheBahamasInvestor.com
Friday, November 11, 2011
Friday, November 11, 2011

The Caribbean second-home market is slowly beginning to pick up, according to international experts.

Admitting that there is not much in the way of data to support this argument, Lorne Bassel, president and chief executive officer of Crave Real Estate/Lubert Adler–a development, investment and consulting company–says anecdotal evidence would bear him out.

“Inventory is being bought up in the primary resorts and the inventory that has been replacing that is starting to disappear, so that’s a good thing,” he said. “Anecdotally, we are starting to see smaller projects come back.”

Bassel, who has over three decades of real estate development experience, says “affordable” second homes is an oxymoron.

“Owning a second home is not for the faint of heart. It is a luxury goods item,”?he said. “In smaller doses there are still people who are coming back who are buying a higher-end product.”

These potential customers are buying in “authentic” locations, he says. 

“If you have a real class product with a lot of the risk taken out of it with stable owners, there is a pent up demand of people who want a second home,”?said Bassel.

Michael Lorenz, vice president of sales and marketing for the luxury hospitality Viceroy Hotel Group, echoed Bassel’s remarks. Viceroy is a hotel management company composed of three distinct international collections–Viceroy, the Tides and Urban Retreats–in some of the world’s most sought after destinations.

“It’s becoming easier now to sell more, because the [glut in] supply is gone,”?he said.

Both men were panelists of the HVC Caribbean Hotel Investment Conference and Operations Summit (CHICOS). The two-day conference began Thursday at the Atlantis Paradise Island resort. 

The panel discussion focused on the Caribbean as a market for hotel investment. 

“When we look at opportunities [for hotel development], destinations that have strong airlift are critical,” said Mark Purcell, vice president of development for Starwood Hotels and Resorts Worldwide whose brands include the Westin, Sheraton, W Hotels and St Regis, among others.

He noted that operating costs on different islands, such as the cost of utilities, could place a tremendous strain on the operations of a project.

“At this point in time, in the current environment, we are trying to focus on tried and true destinations that have a track record for successful hotel operations rather than breaking new ground,”?said Purcell.

The HVS CHICOS 2011 brought together a cross-section of international and regional leaders in hospitality, tourism, real estate, law, investment and government officials.

Many of the conference delegates have a vested interest in the growth and sustainability of the Caribbean region. 

One of the overall goals of the conference is to create a task force to address obstacles and barriers that inhibit investment. The four areas to tackle are airlift accessibility, regulatory and legal framework, human resource development and regional marketing.

The purpose of the task force concept is to take action on the most pressing issues within the Caribbean region.

tblair@dupuch.com

Minister of Tourism and Aviation Vincent Vanderpool Wallace said that airlift is key to establishing the Caribbean brand. The Minister was speaking during a panel discussion at the HVS Caribbean Hotel Investment Conference and Operations Summit yesterday.

Representatives from The Bahamas Tourist Office will attend the prestigious "invitation only" International Luxury Travel Market event to be held in Cannes early December

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