Cayman can significantly increase its high-end room stock without pouring a single drop of new concrete.
There is a large number of beach front rooms that can boast full facilities, well-appointed kitchens, high-standard furnishings, several bedrooms and stunning vistas of Cayman’s natural assets. But those same rooms are often left unoccupied for the majority of the year because they are owned by developers or individuals who do not release them to rentals.
Harry Lalli, president of the Cayman Islands Tourism Association, says that these are assets that are not realised and that a priority for the association is to convince condo owners and agents to place their premises into the short term rental market.
“The interesting part about the condo market is that we do have a lot of condos along Seven Mile Beach and there was a time when investors would purchase them and put them into the short term rental contract to get a rate of return.
“Over the years I have noticed that owners have now opted to rent it out long term, monthly, but not short term. We are trying to increase the occupancy levels from their current levels so that the condo managers can go back to some of the owners and say, ‘hey listen, people in the short-term did quite well last year so maybe you should consider moving your unit [into that stock.]’ They can get it licensed by the hotel licensing board and every time another condo comes into the stock we’ve got another three bedrooms,” explained Lalli.
He said that a lot could be accomplished by the tourism association, the Department of Tourism and condo managers making presentations to the owners when they come down for annual meetings in order to show what is possible.
“A lot of the upper-end condos right now with three bedroom units are doing quite well because there is a demand. These would be condos with an average nightly rate of $1,000 and up and that is hitting the target of families that we would like to attract to the Island.”
Centralised booking
In order to market the condos, there has been a two-year work in progress called the Strategic Selling Unit.
“It was taken up by the Cayman Islands Tourism Association to create a real-time booking engine for the condos,” said Lalli, who said that the site itself would be launched to the condos probably in July.
“It is a very good product which is going to work very well for us; the idea is to centralise the process. There is no actual marketing for the condos; they seem to get overlooked with the marketing dollars that the Cayman Islands Tourism Department has, which tends to go to wholesalers. Very, very few condos have wholesaler contracts because of the commissions involve.
“What this will allow us to do is give greater exposure to the condos, private villas and smaller properties in the Cayman Islands, to offer real-time availability to potential visitors to Cayman, to make it easier for potential visitors to find and book accommodation and of course to increase the occupancy levels at each of the properties,” he said.
The increased ease of browsing and booking within the same booking system is a critical component to finding accommodation. Lalli said that for someone in New York for example, it was relatively easy to find a hotel like Ritz-Carlton, Marriott or Westin and to book through their website. However, other places are not as simple.
“Nobody knows that there is a Beachcomber, Meridian, Caribbean Club… the list goes on. These are gorgeous properties with great beaches and great locations.”
The idea for the Strategic Selling Unit had been on the table prior to Lalli’s first becoming president of the association in 2010.
“It had a slightly different focus and the government did not have the budget to move forward with it. So it was a matter of a public-private partnership to get together to develop it with no cost to the government or to the condos, which was the key to the whole thing. We needed something that would benefit all the smaller properties.
“The company doing it is a private company and the Cayman Islands Tourism Association pushed for it. We knew what the condos wanted; the original [idea] was going to fail when it was presented and it has taken all this time to develop the site properly.”
Monitoring click throughs and referrals will be helpful in knowing where people find the new website; be that through the Department of Tourism, Google or other websites.
What is needed is marketing dollars thrown behind the condo sector, said Lalli, in order to raise awareness of the sector.
“At the end of the day the condos are one of our best kept secrets,” said the president.
The tourism association anticipates that the ease of booking planned will attract new visitors to the destination.
“We are hoping for the Department of Tourism to really assist the condo and villa market – we are just providing them with somewhere to look… if you phone a hotel and they are sold out possibly they will give you a name, but what we are doing is showing you a dedicated site where you can see all the condos and their availability.”
Increasing occupancy
Whilst people are au fait with the concept of a hotel, the condo sector is at a stage whereby it needs to raise awareness of their offering.
“Something like the Caribbean Club would consider itself a boutique hotel with condos and the Meridian beside it is doing that. The problem sometimes is that with stratas, they sometimes have rules on what they can and cannot do. A lot of the new ones along Seven Mile Beach are now showing pretty good occupancy levels for the summer, which is very positive.
“When you look at [a condo] for $600 a night, three bedrooms, on the beach, a full kitchen, three bathrooms, a washer and dryer. Six people pay $200 a couple to get something of high quality whereas if you went to one of the high end hotels to get beachfront you would be paying three or four times that price and you have no kitchen, no washer/dryer but in the condo you get everything including maid service, cleaning and you are still on the beach,” said Lalli.
He said that as an example if it was possible to take the occupancy from its current roughly 48 per cent up to around 68 per cent it would make a huge difference to the economy, not least in collection of room tax.
“There’s also the restaurants, bars, watersports companies, hiring of extra staff; they all will benefit from a higher occupancy level at the condos. The condos tend to bring in more of the visitor that will spend money at the existing places on Seven Mile Beach whereas the hotels, which cater to large groups, particularly in the winter season, there tends to be less of a spillover effect to most restaurants and bars. The hotels are very good at keeping the money on their property and you cannot blame them for that but the condos do not offer bars, restaurants on their premises so everyone at those condos is going out and spending money in restaurants, buying food and groceries from the supermarkets and so on.”
He added that anything that showed the words Cayman Islands would help the destination in general because of enhanced visibility and that someone browsing the condos site may also discover that the island also has a branded hotel such as Westin or the Ritz-Carlton, as some people are more comfortable staying in a familiar brand.
“At the end of the day, anything that benefits occupancy benefits the hotels sector too.”
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