Caribbean Hotel sector does not expect real growth before 2012

POSTED: 09/6/11 2:10 PM

GREAT BAY, St. Maarten – The hotel sector in the Caribbean does not expect to see any significant growth until next year. More than three-quarters of hotels that took part in KPMG’s 2011 Caribbean Hotel Benchmarking Survey said that regional governments show insufficient leadership to bring about necessary changes in the tourism industry.
Hotel operators complain in particular about the lack of investments in the sector and higher costs and the availability and the price of airlift. Results were worse than in 2009 because hotel guests spent less, while the hotels were confronted with higher costs.
The sector is still losing confidence. KPMG’s confidence-meter stood at 3.52 in 2009, and dropped to 2.77 last year. Still more than 40 percent of hotels said they had plans for expansion and that they intend to find funding for this. One third of the hotels pays expansion plans from its own pocket, and another one third contracts new loans or restructures existing ones.
KPMG does the survey among hotels in the Caribbean, including establishments in St. Maarten, Aruba, Bonaire, Curacao and Suriname. More than 60 percent of the participants indicated to expect better results this year, but 45 percent says that the real growth will occur in 2012; 43 percent expects this to happen not before 2013.
To improve their results 45 percent of the hotels aim mostly for generating more revenue. Among their strategies are selling better, more expensive, and additional products. Hotels also work on improving their reservation systems.
One out of every five hotels attempts to create better results by cutting costs. Only one out of ten hotels opts for lower room prices. Last year lower prices were an important reason for dismal results: the occupancy rate was higher (4 percent above 2009) but room prices were on average 1 percent lower.
Whether the hotels will really do better this year depends mostly on the global recovery of the economy. Fifteen percent of the participants in the survey mentioned consumer confidence and employment as factors that will influence their results.
The most important stumbling blocks for growth are higher operational costs and higher costs for traveling.

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