Caribbean destinations in for a great winter season

[George]

Caribbean destinations in for a great winter season
 
Observer Reporter
Friday, December 09, 2005

With Cancun still recovering from the recent spate of hurricanes, there is now a shortage of available rooms in warm weather destinations, particularly the Caribbean. It really is a case of what was Cancun's loss is the Caribbean's gain.

The Mexican tourist hotspot has 27,700 rooms and about 15,000 of those are not expected to be ready for visitors until the end of next week. This means that mostly American visitors are now scrambling for alternatives and the Caribbean has become a particularly attractive proposition.

According to Avery Johnson of the Wall Street Journal, Martineau Bay Resort & Spa on the island of Vieques in Puerto Rico, has seen a 20 per cent increase in bookings after Hurricane Wilma hit in October. The Atlantis Paradise Island Resort in the Bahamas has picked up several large groups that were displaced from Cancun and now has 10 per cent more leisure traffic than usual this December. However, prices are up about 4 per cent.

Travelocity, the online travel agency arm of Sabre Holdings has seen a surge in Christmas season bookings to destinations that rival Cancun - including 30 per cent more to Maui compared to last year, and over 50 per cent more to Jamaica.

But the Cancun factor is not the sole determinant of this fortuitous phenomenon. Over the last two months winter luxury travel bookings have never been busier and room rates for the coveted spots are approaching all-time highs.
Resort rates are up by between 5 per cent and 8 per cent this winter, says Scott Berman, a partner in PricewaterhouseCoopers Hospitality and Leisure Advisory Group.

According to the Wall Street Journal, higher operating costs at hotels, particularly for utilities, are also pushing prices higher. Furthermore, only 81 per cent of Grand Cayman's hotel rooms have reopened following the trail of devastation wrought by Hurricane Ivan.

Avery Johnson notes that some of the Cancun-area resorts are offering discounts to try to lure travellers back to the beleaguered region. Ikal del Mar is reopening next week and will offer a rate of US$2,399 for five nights that includes snorkeling, a dinner and a spa treatment through December.
21 (This is 20 per cent off the regular rate.) - after that, it's filled up. Cendant Corp.'s Orbitz has specials for Christmas in Cancun such as a flight from Chicago and five nights in the Le Meridien Resort & Spa from December 28 to January 2 from US$1,615.

Although price cuts serve as an incentive to visit Cancun the supporting infrastructure is far from ready. The Cancun airport has reopened, but airlines continue to fly reduced schedules and United Airlines service is completely suspended through mid-December. Cruise ships are calling on Cozumel again but passengers need to be ferried to land because the docks remain under construction. Electricity is back and some beaches actually gained sand, but there is scattered debris and some palm trees are down.

The Wall Street Journal says The Cancun Convention and Visitors Bureau estimates that two-thirds of Cancun's rooms will reopen by the summer. Most hotel rooms in the Mayan Riviera have already reopened, and most of Cozumel's rooms are expected to be ready for visitors by February.
Overall, the area has some 60,000 hotel rooms, making it one of the Caribbean's largest destinations (Jamaica, by contrast, has about 17,000 rooms).

Part of the problem for this year's late bookers is that the same groups reserve the Caribbean's high-end resorts year after year, and getting into that list requires advance planning and often special connections.

Johnson observes that top-end spots like Jumby Bay, a Rosewood Resort in Antigua, are running 10 per cent ahead of last year in rates and occupancy, which means that even before Hurricane Wilma there would have been little hope of scoring a room. The Buccaneer on St Croix in the US Virgin Islands has been full for months with generations of the same family who return year after year; it also gives returning guests a 5 per cent discount.

The Wall Street Journal staffer went on to say in his article entitled Finding a room at the beach that it is the destinations known for bigger resorts and lower room rates that are picking up the overspill including places such as Florida, Puerto Rico, Jamaica, the Dominican Republic, Puerto Vallarta and Hawaii. That means last-minute planners used to being able to score spots at large all-inclusive properties are in for a shock. The Westin Grand Bahama at Our Lucaya has booked four large groups from Cancun after Christmas that are worth US$2 million in revenues. It's now full for Christmas, but its sister property, the Sheraton, has some 80 rooms left. Little Dix Bay, a Rosewood Resort on Virgin Gorda in the British Virgin Islands, got a wedding in early January that was to have taken place in Cancun. At the four Couples resorts in Jamaica, during the week of Nov 14, bookings paced 14 per cent ahead of last year; Christmas is sold out at two of the properties.

Still, there are some rooms to be had in the Caribbean.
Although most warm-weather spots are full, there are some odd exceptions. St Lucia has had a hotel- building spree, with 900 new hotel rooms by the spring in addition to the existing 4,335. Marriott International has recently opened a 626-room property on the island of St Kitt's, which still has some availability for Christmas. Two Starwood Hotels & Resorts. properties in Puerto Rico have room left; The Four Points by Sheraton Caguas is US$175 and the Four Points by Sheraton Palmas del Mar is US$195.

Aruba, which has suffered some public-relations fallout from the Natalee Holloway disappearance, also has availability. And in Abaco in the Bahamas, where boating rather than beaching draws tourists, the Christmas-New Year's week is only 80 per cent full at the Abaco Beach Resort and Boat Harbour. The resort launched a special after Thanksgiving to fill the extra rooms: Book three nights and get the fourth night free.

Speaking with Caribbean Business Report this week, Chairman of Sandals and Beaches Resorts (the largest all-inclusive hotel chain in the English-speaking Caribbean) Gordon "Butch" Stewart said: "Sandals has had its best year and the windfall from Cancun has topped it up nicely. The Caribbean has benefited- more so Jamaica because it has the largest airlift and number of rooms. This year we re-structured our marketing and spent large sums upgrading our hotels particularly Sandals Grande Ocho Rios and Grande St Lucia. We are still experiencing difficulties with Sandals Whitehouse and the government has not seen fit to complete its part of the job leaving the hotel incomplete. With Whitehouse we have lost US$28.5 million in operations."

The Sandals boss said it was continuing with its expansion into the Caribbean and was looking at the Far East. Work is taking place on a Beaches Resort in Grenada and an expansion exercise is underway at Beaches Turks & Caicos.
Its property in Antigua is presently undergoing expansion.
"I have heard talk of Riu leading the Spanish Invasion of Jamaica. Well, Sandals is leading the Jamaican invasion of the Caribbean. We have established the ultimate all-inclusive hotel chain in the Caribbean and we are not catering to a blue-collar clientele, rather we seek upscale visitors. We market up not down, that's why we don't consider Riu our direct competition."

Stewart said that the high levels of crime in Jamaica are proving detrimental to the local tourism industry and are driving away upscale visitors. He said first world visitors are comfortable with Jamaica's hotels and beaches but do not accept harassment and crime. Crime he says makes it very difficult to maintain yields.

He called on the Jamaican government to look at tax-free imports for hotels that would help to bolster the sector. He said Caribbean governments must guard against overtaxing the hotel sector thus rendering it uncompetitive and susceptible to competition from the cruise ships.

Stewart cited Turks &Caicos and St Lucia as Caribbean destinations that have done admirable work with their tourism product. He sees both Antigua and Barbados attracting and getting the more high-end visitor. He made it clear that once the wave of euphoria brought on by Cancun's misfortune had passed with that destination re-establishing itself, Jamaica and other Caribbean destinations had real work to do in making its tourism product even more appealing.

[CoralReef]

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