Medical tourism, golf course and airport improvements also on the table
As many as five major new hotels
could come to Cayman within the next two years.
William Peguero, chairman of the
National Investment Council, told the Caymanian Compass that the council was already
talking to a number of industry players, including Hilton’s Blackstone group,
Wyndham, Park Hyatt, Renaissance, Waldorf-Astoria and Four Seasons, as reported
in this paper.
“One of the things we’re very keen
on and I’m trying to drive is that we don’t want stand-alone [projects] and we
don’t want individuals who just want to do their first hotel. We’re looking for
groups, like the Four Seasons, who have their own reservations system and are
not dependent absolutely on the Department of Tourism and Cayman Airways to
help them fill their rooms. These [hotels] have their own reservations system
that can give them 50 to 60 per cent occupancy on their own and they have their
own promotion, their own marketing,” he said.
Mr. Peguero said that dialogue
between Cayman Islands representatives, hotel chains and potential developers
had been ongoing since the Caribbean Hotel and Trade Investment Conference in
San Juan, Puerto Rico in May. The industry talking shop was attended by several
Caymanian big-hitters, including Premier McKeeva Bush, Michael Ryan, Dart
Realty, investment banks and tourism professionals.
The hotel names mentioned, Mr.
Peguero said, manage rather than build resorts, and to that end the National
Investment Council had been talking to developers interested in constructing
“We have received several
syndicates with funds willing to do the development, provided we are able to
find the management, so it’s a win-win situation. Once you can find a syndicate
that can do the project, they tailor the project toward the wishes and needs of
the management. Then, obviously, it’s a no-brainer because you get a 20- or
30-year contract that is very beneficial for the owner of the property so
“The developers are mostly
syndicates and investors from abroad, but obviously we’re looking at every type
of angle where we can pair them up with a local developer or individual with
means. That we have already done; we pair them up with individuals or groups
that are already here. We do the matchmaking, if you will, because that’s part
of the wishes of the National Investment Council – not to just bring people in
but to galvanise them with the people we already have here. And we want people
who bring not only resources but expertise as well,” he said.
Room stock lost
The chairman of the council added
that at certain times of the year there is simply not enough room stock on the
island to cope with the demand. There was a loss of approximately 800 rooms
from now defunct resorts such as Sammy’s Inn, Sleep Inn, the Hyatt and
Courtyard Marriott, a situation that needed to be addressed, said Mr. Peguero.
He observed that the condominium rental pool had moved from the $300,000 to
$500,000 range of past years into upper-end condos valued at over a million
dollars that were ‘not in the same game’.
Sports tourism was also something
that the investment council has at the forefront of its thinking, he said.
“We also would like to bring a
mega-resort that would have a golf course because obviously we have a situation
where people are looking at that type of amenity and we believe that a golf
course would play well. Golfers are good tourists, they spend a lot of funds
and are good for tourism. We want those type of clients to visit our island,
but we have to diversify and we have to give them more options than what we
have right now.
“We have several sites, as a matter
of fact, on West Bay Road, [for example the area] that the folks that own the
property of where the Courtyard is – which I believe is up for sale – [where] I
believe we will have the opportunity to do a golf course inclusive resort,
residencies and quite a large development,” he said.
Mr. Peguero added that there are
other parts of the island that are being looked at for new properties,
including Frank Sound and East End. A number of boutique hotels are also being
discussed at different locations, as well as business-oriented resorts.
“We would like to entertain one or
two business hotels because in reality that is not being served to the level
that it should be served, and there are some local entities looking at that as
well,” he revealed.
The investment council chairman
said that the projects on the table were ones that could be achieved within the
next 24 months. This is because there is a widespread view within the resort
and hotel industry that the sector will begin to pick up within two years. Experts
at the Puerto Rico conference had pegged the hospitality and hotel sector as
cyclical in its ability to rebound from macroeconomic factors, such as the
“The whole industry believes that
the preferred locations and travelling will be back out [of recession] again at
the end of 2012. I think you saw it in the Premier’s remarks at the beginning
of the budget that we’re not expecting that we’re going to come out next year.
We’d be glad to level, have the bleeding stop this year and have maybe small,
little growth and begin to get some momentum and traction. But the reality is
that everyone’s just trying to keep their market share for this year and next,
to stabilise and begin to put in place the things that will help us going down
the road,” said Mr. Peguero.
One of these imminent projects was
the delayed revitalisation of Owen Roberts International Airport, said the
chairman. By extending the runway, more options for European visitors could be
generated and current facilities need to be upgraded, particularly with the
advent of medical tourism. Implementing jetways and facilitating the movement
of people in wheelchairs or with particular medical requirements are examples
of things that could be done in the immediate future. The medical tourism
industry, noted Mr. Peguero, is known to be relatively recession-resistant.
“I know first-hand that a lot of
the American health insurance companies are now looking at, and negotiating
with, countries that can provide similar services for a fraction of the cost,
to the same standard [of health care]. [This would involve] board-certified
physicians, English-speaking professionals and joint commission-approved
physicians and facilities. We’re not talking about changing apples for oranges;
we’re talking about apples for apples, just a different jurisdiction.
“The Caribbean right now spends
approximately US$700 million on medical tourism in South Florida. That’s people
going from the Caribbean into Florida for medical services. They don’t go for a
vacation; they go there specifically to get a medical procedure done. Of
course, they may go shopping after that, but the point is that they are there
for medical reasons. I believe that if we have a medical facility here, then
the Cayman Islands can tap into that market,” he added, noting that the average
party of visitors associated with a medical procedure is comprised of 2.8
Mr. Peguero said that there is a
“will and desire” to move on with a Public Finance Initiative to achieve these improvements
at the airport.
“Going for a PFI makes the most
sense. You can get what you need and at the same time it doesn’t have to become
another expense of the current expenditure of the government,” said the
He added that it was important for
Cayman to be proactive in order to become less dependent on certain sectors.
Diversifying could bring new business, income and jobs, concluded Mr. Peguero,
who said that within the next month details of the initiatives would be made
public and sent out for corporations to bid on.