More tourists are traveling to the Caribbean’s major vacation destinations this year, but stayover numbers for the first three quarters of 2015 show that Cayman’s numbers are flat following a record-breaking year in 2014.
Average daily room rates in Cayman are up by about 13 percent so far this year, and that means that while the number of visitors to the islands remains the same, hotels are making more money, according to a new market report from Integra Realty Resources.
“A 13-percent increase in [average daily rates] over the past 12 months is a significant increase,” said IRR’s James Andrews. “Even though they’ve sacrificed some room nights, they’re still increasing their revenue.”
Cayman’s hotels have the highest daily rate in the region, at an average of almost US$400 a night. The average daily rate for the Caribbean’s top destinations is about US$225, according to the analysis.
In Cayman, Mr. Andrews said, “Hoteliers are trying to push rates higher and higher” to maximize profits.
“People may be choosing to go elsewhere for a better deal,” he said.
Rosa Harris, director for the Department of Tourism, said, “The hotels test the market for what rates they can charge.” Since the economic downturn in the last decade, she said, the numbers of tourists visiting the Cayman Islands has rebounded and rates and increased along with the additional demand.
She said fewer people have come to Cayman this year than expected from the northeast United States and Canada.
The marketing from the Department of Tourism, Ms. Harris said, targets wealthier families. For high season, she said, the target customer has a household income of at least US$300,000 a year. For the rest of the year the marketing is geared towards families making at least US$175,000 a year.
Of the dozen top markets analyzed in the new quarterly report, the Cayman Islands and Martinique were the only two vacation spots that did not have an increase in stay-over visitors. Cuba’s arrivals grew by more than 17 percent in the first nine months of the year, followed by a 15 percent increase in Barbados and almost another 15 percent in Aruba.
Martinique was the only market to shrink, recording almost a 3 percent drop in arrivals.
Air arrivals in Cayman hit a 15-year high last year, with more than 382,000 tourists flying to the islands. At the beginning of 2015, the arrivals statistics from the Department of Tourism pointed to an even stronger year, but the numbers fell back for the summer. The air arrival numbers started going up again in September and October, and the numbers could end up with a slight increase for the year.
A year ago, Cayman tourism officials predicted a 5 percent increase for 2015. Tourism Minister Moses Kirkconnell last month attributed the lower-than-expected stay-over tourist numbers to the cancellation of the under-15 CONCACAF tournament that was expected to bring 36 teams along with families, friends and supporters.
New rooms needed
Over the past year, Cayman’s hotels have had an average of about 68 percent occupancy, but there have been no new rooms added to the islands’ market in several years.
“It’s unlikely we will get an increase until the Kimpton comes online and some other new product,” Mr. Andrews said. The new Kimpton hotel, named the Seafire Resort and Spa on Seven Mile Beach, is slated to open next year with 266 new rooms.
Mr. Andrews said he thinks the new resort on the northern end of Seven Mile Beach will attract a higher-spending crowd.
“There’s not much competition at the upper end of the market,” he said. “The Ritz is the only real five-star hotel on the island,” he said, and the new Kimpton will add a new option for visitors looking for that level of service.