Summer bookings seem to be going well at tourist properties for the traditionally slow period of summer, despite the economic slowdown in the US.
While many properties are reporting more bookings than last year, some properties are feeling a pinch from what is happening with the US economy – where at least 80 per cent of Cayman’s stayover tourists come from – and from higher operating costs.
General Manger of Comfort Suites Ken Thompson said he is cautiously optimistic about the summer, but voiced concern about operating costs and said he is watching pricing with the airlines.
This June, occupancy has been in the mid 70 per cent, which is fairly good and a little up over last year.
‘July and August are looking a little soft, but there’s still time to do pick-up there,’ he said.
January through April occupancy was in the 90 per cent range while in May it was in the mid to upper 80s.
The 110-room Seven Mile Beach hotel has exceeded its budget in terms of occupancy and revenue for January through to June. ‘We’re pleased with that, although we’ve having to work very hard to make it happen,’ he said.
Mr. Thompson explained that when the budgets were done, costs such as electricity were not at the high levels they are at, which makes turning a profit more difficult.
At the 365-room Ritz-Carlton, Grand Cayman, June and July are outperforming last year and August is picking up nicely, according to spokesperson Melissa Ladley. ‘The island’s Summer Splash programme is just hitting its stride too, so we are still seeing more bookings daily.’
The hotel is not yet directly impacted from the US economic conditions but that is something management is watching closely along with airfares.
At the 295-room Grand Cayman Marriott Beach Resort the summer is looking good following a good year in general, according to Director of Sales and Marketing Carolina Voullieme.
‘We’re very positive in general with good growth compared to 2007,’ she said.
June is looking like it will be about five per cent ahead of last year in occupancy. Compared to last year the booking pace for July is 11 per cent ahead, the booking pace for August is 13 per cent ahead while the booking pace for September is four per cent ahead of last year.
Despite the downturn in the US economy, Ms Voullieme said it does not appear to be hindering travel to the Cayman islands, although it appears visitors are perhaps more conscious of spending money while they are here, such as on food and beverages. ‘But they’re still coming,’ she said.
Director at The Reef Resort in East End, Tom McCallum said occupancy rates are up 25 per cent on last year for the year to date, up 40 per cent for the summer and June alone was up 44 per cent on last year’s June. Forward bookings are also looking good. ‘We’re having a killer year,’ he said.
The June holiday weekend was sold out, he said, although this was mostly with locals. A new trend is emerging with residents booking to stay out at the resort for five to seven nights, rather than just for a weekend.
Manager of Grandview Condominiums Max Hillier, who also represents the Condo/Villa sector on the Cayman Islands Tourism Association’s Board of Directors, noted that Grandview is working hard to increase the revenue for its owners for summer, generally a weak period for the accommodations sector.
While summer is looking slightly better than last year, it is still relatively flat for the 17 units in their short term rental pool, he said.
One of the problems this year is the increase in power bills, which, he estimates have gone up as much as 30 per cent to 40 per cent in a year.
And although revenues are greater this year, more money has to be paid out on bills and this has happened disproportionately, he said. ‘It’s very hard to continue to do business,’ he said.
General Manager with Plantana Condominiums Carlene Alexander said she is fairly pleased with how summer bookings are going, even though they are down on last year.
June has been running at 45 per cent to 50 per cent occupancy, with July looking to be about the same for the 35 units in the short term rental pool.
But in comparison to last year, the May through September period appears to be down a significant amount, both in terms of reservations and the number of nights people are staying, although she would not give out figures.
She attributes this to the US economy and the sub-prime crisis.
‘The crisis is not only hitting the middle class,’ she said. ‘It’s also hitting the high-end property owners.’
But last year was a record-breaking year at Plantana in terms of occupancy, she noted. ‘It was the highest summer season since Hurricane Ivan (in 2004), so this year is probably more in line with the norm,’ she said, explaining that it was more similar to 2006.
At Villas of the Galleon, General Manager Lisa Ebanks reports that summer business there has doubled over last year for their 60 units in short term rental. It is running lots of deals and has repeat guests. ‘Things are not super, but considering everything, they are going pretty well, much better than we thought,’ she said.
Not only are they doing better than last year, but they are beating pre-Ivan figures – for March, April May and June of 2004.
‘I’m so happy – we seem to be back on track, but we don’t know for how long,’ she said, referring to the US economy, high food and fuel costs, all of which could hinder travel going forward.
After Hurricane Ivan a lot of condo owners moved their condos from short to long term rentals within the condo sector in general.
CITA Board member Mr. Hillier said more condos need to return to the short term rental pool in Grand Cayman in order to increase room-stock, which ensures a certain level of airline service to the island, although airlift is good, he said. A new focus has been created on this issue by the CITA going forward.
The CITA along with the Department of Tourism and the Ministry of Tourism is also developing a web based booking engine for condos, villas and small hotel properties. The aim is to open up room stock and give the smaller properties more ability to sell their product.
‘This is a very exciting initiative,’ said Mr. Hillier.