Editorial for 20 March: Hotels need our support

The Cayman Islands suffered yet another tourism black eye
last week as the territory’s best hotel, The Ritz-Carlton, Grand Cayman, was
placed in receivership.

The action continued a disturbing trend of financial trouble
for Grand Cayman’s hotels. The Westin Casuarina Resort was placed in
receivership last year. The Marriott Beach Resort struggled through financial
troubles before it was sold last year. During the last decade, several other
hotels have faced difficulties leading to the closure or sale of the
properties. Treasure Island Resort was sold after going into receivership and
is no longer a hotel. The Sleep Inn hotel was sold and is no longer a hotel. The
Holiday Inn became the Courtyard Marriott and has been sold twice in the past
five years. It has sat empty since November 2008. The Hyatt Regency has sat
empty since Hurricane Ivan caused major damage in September 2004.

But the Ritz situation is most troubling. Despite having
great occupancy rates, developer Mike Ryan, couldn’t make the hotel financially
viable. He warned government more than a year ago what would happen if he
didn’t get some concessions. Whether the government didn’t believe him or they just
decided not to assist, the result is a serious blow to the Cayman Islands’
reputation.

Part of the reason hotels like the Ritz face financial
difficulties here is the extremely high costs of electricity and water. In
addition, Cayman’s immigration policy puts hotel operations at a disadvantage
because foreign workers are generally not allowed to multi-task, something that
could help reduce operating costs.

Our Caribbean tourism competitors see the benefit of having
major hotels and gladly give various kinds of concessions to hotel operators
and developers. Here, concessions are made begrudgingly with strong public
disapproval. If the Cayman Islands doesn’t start accepting the idea that hotel
developers and operators need concessions in today’s world, then Cayman is
simply not going to have sufficient hotels, which will negatively impact the
tourism product. Since tourism is one of our only industries, we need to
support our hotels better.

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1 COMMENT

  1. With due respect to the writer I think the problem is far more complex than just simple finances.

    I have just spent a very enjoyable week on Grand Cayman in one of the few reasonably priced accommodations left on the islands. However, with my air fares that week is still going to cost more for one person than two of us would pay to fly from the UK to Cuba or the Red Sea for 14 days on an all-inclusive vacation. In fact the total is not far short of the cost of a similar two weeks in the Maldives. When I first came to the Cayman Islands 20 years ago flights were a lot cheaper and that kind of competition did not exist. In fact most of the hotels now being filled with European travellers in the ever-expanding AI (all inclusive) market have been built in the last 12-15 years.

    The problem seems to be that the world tourism industry has moved on (as an example one major UK tour operator now only offers all-inclusive packages) but the people running things in the Cayman Islands are still working to what looks a plan stuck in the 1990s. While prices in the Cayman Islands have risen and hotels have closed, everywhere else has got cheaper and that has been achieved by determined expansion on the part of hotel chains backed by tour operators and governments who recognise the value of tourism.

    So maybe people should be asking why hasn’t this happened in the Cayman Islands? Can you really find space for Camana Bay and the Shetty hospital plus hundreds of currently vacant building plots but not for a Sofitel or Blau joint venture hotel?

    And it’s not about extending the airport for direct flights either. UK and European sheduled charters operate into Cuba, Jamaica, the Dominican Republic and Mexico just about every day so all you need are connecting flights. Operating into JFK, Chicago and Washington may look good on paper but might it make more sense to leave these routes to other operators and use the CAL aircraft to shuttle in UK tourists on a joint venture with someone like First Choice Holidays?

    If you want to stop the rot the game plan is going to have to change and I just cannot see the willingness to do that. In fact I suspect that the Cayman islands has missed the proverbial boat and will never join the tourist destinations now cashing in the current market for all inclusive holidays.

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