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’
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.