Cayman’s accommodation sector seemed to be on track for another profitable year at the start of 2020, but this came to a screeching halt with the advent of the COVID-19 pandemic.
In the last three months, those within the industry say they have refunded millions of dollars in rental bookings.
“That’s been very, very hard when you see all of that money going back out the door,” said Juliet Cumber-Forget, managing director of Cayman Villas, in a Zoom interview with the Cayman Compass this week.
She works at one of several condo and villa businesses that have lost revenue due to the border closures and lockdown triggered by the coronavirus crisis.
It has also been tough for Jim Leavitt, principal general manager of Grand Cayman Villas and Condos.
“We’ve had to refund over a million and a half dollars of rent to guests so far. We’re still refunding. We will probably refund over $2 million of rent. By the time this is all over, it may be closer to $3 million,” Leavitt said in a Zoom interview on Tuesday.
He said Grand Cayman Villas and Condos also lost bookings that are normally done at the last minute.
“Our company will do, on average, over $10 million of rent a year. And we do probably three-quarters of that from December to July. So you can just imagine how expensive this has been for us,” he said.
Based on the Department of Tourism’s room stock statistics for April, condos and villas collectively account for close to 62% of Cayman’s available accommodations. In Grand Cayman alone, the room stock for condos and villas totals 4,174.
When the borders closed in March, both Cumber-Forget and Leavitt said the refunds had kicked in immediately.
Leavitt said there was no hesitation in giving customers a positive experience through refunds, since that will be key to helping Cayman’s tourism product bounce back.
“I think that will pay dividends in the long run,” he said.
“From the living standards standpoint, [Cayman] is gold standard in [the] Caribbean. Other islands don’t really have as good of a Department of Tourism that provides a guidance as ours that we have. That Caymankind theme runs deep all the way through all of the hotel, condo and villa sectors and the guests appreciate that,” Leavitt added.
COVID challenges and the road ahead
Cayman’s border reopening, tentatively set for 1 Sept., is dependent on the results of the expanded coronavirus-testing programme, Premier Alden McLaughlin has said.
For accommodation industry members, the longer the delays continue, the harder it gets for businesses to keep its workers employed.
Cumber-Forget said the industry needs to be unlocked, so that staycations can help boost the domestic economy.
“We understand [the borders are] probably going to be closed longer, but we’re drowning here. You know, we’ve got these properties ready to go. We’ve got people desperate for holidays and staycations because they can’t leave the island,” she said.
The premier has suggested that staycations could be an avenue for revenue generation, but there is no indication when the accommodation industry will be released from restrictions to start that process.
The situation for Cumber-Forget is getting dire. She has already cut salaries to stay afloat.
“I’ve got five housekeepers that have done nothing for three months and if they don’t start working by the end of June, I’m going to have to let them go,” she said, adding her staff are all Caymanian, with 12 employed full-time.
Molly Thomas, director/founder of Luxury Cayman Villas, is also feeling the strain. She said she has refunded hundreds of thousands of dollars and, because of COVID-19, her plans for expansion have been put on hold.
“We are hoping to recoup a tiny portion of that with staycations. We’re really looking forward to… an announcement from the government of exactly when they may be allowed. We know that everyone’s thinking that’s going to happen soon, so we’re anxiously awaiting a firm date,” she said.
Leavitt and Thomas said the staycations will not really move the needle forward in terms of recouping their losses, but it will have a positive effect on the local economy and the community.
“It will be a tiny drop in the bucket to recoup some of that revenue… and we’re really focussing on our local community here as our main target demographic, probably for the next six months, the remainder of 2020 to a large extent,” Thomas said.
Leavitt said McLaughlin and the government have done well in managing Cayman’s COVID-19 crisis and he believes staycations can help in the economic-rebuilding process.
“[Staycations are] all part of just getting the entire Cayman economy going. It is an opportunity for the Cayman residents themselves to have a stake in restarting their own economy,” he said, adding that it does not help the economy for everyone to stay inside and not get out and increase the gross domestic product.
“Government’s done a great job. If they will allow the staycations to occur soon, that’ll be self-stimulus right there, with no out-of-pocket costs for the government,” Leavitt said.
Cumber-Forget said 2020 marks 50 years since her mother started their family business and while it was hard to see the losses they incurred, she is optimistic that Cayman will thrive.
“We have had money coming in,” she said. “I do reports weekly as to what new bookings we’ve had and, obviously compared to last year, it doesn’t compare at all. In the last month, we’ve probably done about 80 new bookings for next year. We do have [bookings] next year from January onwards.”
However, she said the main concern is for the rest of 2020.
Leavitt believes Cayman can recover.
“I think it’s going to take off,” he said.
“We have already seen in the United States a four-time increase in the inquiries for beach house rentals on the east coast of North Carolina, South Carolina and Georgia. It’s four times larger than it was last year this time and there are very few vacancies available. I predict the same thing’s going to happen in Grand Cayman. As soon as there’s an official word, our phones are going to ring.”