Resorts optimistic about challenging year

‘Cautious optimism’ is the phrase du jour among Cayman’s resorts and hotels after a difficult year in the tourism industry that has affected the number of bookings across the board.

resort optimistic

Mr. Hillenbrand

Although numbers are recovering, guests are leaving it much later to finalise accommodation plans, are coming for less time, spending less, and are far more deal-conscious than ever before, say Cayman-based businesses in the run-up to the holiday season.

‘Christmas is the highest-demand time of the year and we have a very high percentage of repeat guests over the holiday period,’ said Melissa Ladley of Ritz-Carlton.

‘It’s been a more challenging year; you have to work harder for the business, but our guests aren’t just searching for the cheapest rate, the fire sale concept – it’s more about added value.’

Unique

She said Cayman had to build on its unique aspects ‘because we’re not in the market to compete for the lowest rates or the deepest discount – that’s not the product we offer. It’s about families travelling together who want all the benefits that Cayman provides.’

Ms Ladley added: ‘Being in the fortunate position of having Christmas fully-booked puts us in a state of cautious optimism compared to last year because it shows us that people are ready to travel. We’re not irrationally optimistic, but we are cautiously optimistic.’

A hotel’s performance can be calculated through a combination of room occupancy and average daily rate, or ADR, which dictate the revenue per room – a figure attained by dividing the total number of rooms sold by the average daily rate. The occupancy totals for Cayman as a whole have dropped by 4 per cent, and ADR dropped CI$24 over the last year as the hotels adjusted to the market’s demand for lower rates.

Carolina Voullieme. sales and marketing director of the Grand Cayman Marriott Beach Resort, said 2010 promises more competition in rates and room deals as people begin to recover from the shock of 2009’s economic problems.

‘We’re looking at a good December, better than last year, although there is a shorter booking window in the past – people are booking later than ever before and also not staying as long,’ she said.

For the destination in general, the length of stay is shorter than in previous years as people continue to take vacations, but are less able to spend time and money on an extensive holiday in Cayman. Promotions, such as the Marriott’s ‘fourth night free’ scheme and many similar others, are becoming the norm.

Deals

‘We will still see people trying to get good deals because they get used to it and it is not easy to go back to a higher rate level,’ Ms Voullieme said. ‘People will still travel; in particular, the leisure market and individual travel market are relatively strong. Corporate bookings are ahead of our own projections for which we budgeted at the start of the year, which is very encouraging for the year ahead.

‘Last year, people were a bit more cautious but the leisure traveller is starting to travel more again. The group bookings haven’t picked up as much yet but we have a better forecast in 2011.’

The challenge to Cayman and its hotel and stay-over industry is to face the challenges of the wider economic situation with some flexibility, continued Ms Voullieme.

‘You need to adapt with the market and adapt with the trends, otherwise you will lose out,’ she added.

Thomas Mason of Comfort Suites was guardedly hopeful about the way things are shaping up.

‘The bookings this Christmas season are on pace and we hope to have 70 per cent occupancy over the period. Although we’re not doing cartwheels down West Bay Road quite yet, it’s a little better than we had anticipated. The booking window is a lot shorter and people are shopping around a lot more looking for deals,’ he said.

Resorts are competing with lower rates that other competitive Caribbean island destinations are able to offer, said Mr. Mason, who feels that a good product will always draw visitors to the islands.

Pirates Week

‘We had a very good Pirates Week and tourists loved the Cayman Islands during that period. The feedback was exceptional; we had a group of ladies over from the police force in London and they had a fantastic stay. They loved the island, the event and the hospitality and have indicated that many of them plan to come back for future vacations,’ Mr. Mason said.

He explained that customers have a lot of choice of destinations in the Caribbean, so Cayman needs to make the most of its location and also look after people so they always want to return.

‘I have a lot of confidence in the people, the destination and the islands as a whole. Cayman is like a rubber ball – it always bounces back and that’s how we have to be,’ he said.

Over on Little Cayman, it’s a similar story. Peter Hillenbrand of Southern Cross said while 2008 was a record year for the resort, occupancy was down 20 per cent on that this year.

‘The Fall has been bad and August was particularly bad. There were even days where we were open but had no guests at all which is strange for a full resort,’ he said.

Increase

But he has seen a marked improvement in recent weeks. ‘The last eight weeks have increased by a minimum of 10 per cent each time – people are definitely booking closer to their departure time now too. Many people are playing the discount game, but that conditions people to expect a lower rate if they just wait a little longer.’

Penny Cumber of Cayman Villas noted that it’s not just bargain-hunters who are looking for deals.

‘Even the most wealthy, those with their own private planes, are looking for a discount,’ she said. ‘Other islands are offering it and you have to compete. People are booking for less time – last year we had to come down from a 14-night minimum stay for our bigger houses to a week this time, and finally, people are booking at the very last minute.’

She added: ‘I had a booking come in just the other day for Christmas. That late a booking would have been unheard-of in years gone by. Usually when 11-15 people want to come and book out a residence at such short notice finding that amount of aeroplane seats would be impossible but I guess that tells you something about the airline industry too.’

The prevailing feeling among the resorts and hotels is that things are indeed looking up for 2010 and beyond, but the onus is on the tourism sector to adapt to the new demands of a drastically-altered market.

Ms. Cumber was upbeat about the challenge ahead. ‘I feel enthusiastic about the future; we’re all re-branding and re-thinking ourselves now. We’d previously been very complacent and never had to think of ways to bring people back but now we do.

‘It’s a matter of getting together as we’re all suffering, being careful where we advertise and working harder to get the tourist dollar, but I think we will come back strongly.’

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