Monday, February 13, 2017
Monday, February 13, 2017
Caribbean tourism fared well in 2016 and industry stakeholders are generally upbeat about the year ahead.
Announcing the results of the second annual Caribbean Hotel and Tourism Association (CHTA) Industry Performance and Outlook Study, Frank Comito, director general and CEO of the private sector association, stated that “more than four out of five (81 per cent) hoteliers have an encouraging outlook for tourism in 2017.”
Comito explained that the survey, conducted by CHTA, was undertaken “to assist the organization in gaining a better understanding of the state of the tourism economy, its outlook, and the degree to which a number of factors impact or may affect the tourism industry.”
The survey, conducted during the first two weeks of this year, polled a representative sampling of hotels throughout the Caribbean of varying sizes and categories.
It looked at their 2016 performance and 2017 expectations for factors in areas such as employment levels, revenue, profits, capital spending, room occupancy, and rates, each forming the basis for assessing the state of the tourism economy.
In 2016, hoteliers reported an even split on revenue performance with 47 per cent recording an increase and a similar percentage reporting a decrease. While expectations for the year were higher initially, last year’s mixed performance came after an exceptional year for Caribbean tourism in 2015.
“Hoteliers entered 2016 with high performance expectations but these were tempered as a combination of unanticipated factors surfaced during the year,” said Comito. These events included a warmer than usual winter in the region’s primary feeder markets; Canadian and UK exchange rates; Brexit; the threat of Zika; and political and economic certainty in parts of the world, according to the survey respondents.
Despite this, the profitability picture improved over the previous year, with most hotels registering a net profit in 2016. Seventy-eight per cent of respondents reported a net profit while 22 per cent reported a net loss. Looking ahead, in 2017 more than two-thirds (67 percent) anticipate an increase in revenue, and 56 per cent expect a slight improvement in profits.
It was encouraging to note that about 55 per cent of hotels also increased capital expenditures in 2016, with a quarter of those investing more than 10 per cent over what they did in 2015. “This is a positive sign and an indication of long-term confidence by Caribbean hoteliers in the industry,” reported Comito.
Although room occupancy decreased for just more than half (51 per cent) of the reporting hotels, a notable proportion (29 per cent) reported an increase in occupancy. More hoteliers are optimistic for 2017, with two-thirds expecting an increase in occupancy.
Despite the fact that average daily room rates (ADR) were reduced by 45 per cent of hotels, as many as 42 per cent increased their rates. This year, approximately 55 per cent of hoteliers expect to increase ADR while only 15 per cent expect downward pressure on rates.
It is important to note that employment levels were maintained by 55 per cent of survey respondents in 2016, while only 17 per cent reduced staffing levels and a sizeable proportion (28 per cent) hired more staff. This pattern is anticipated to continue in 2017.