By Rico Louw
Similar to the opening month of 2018, February hotel performance was sluggish when compared with historical trends in the Caribbean, according to the latest data from STR.
As noted in our article last month, Q1 months are typically the high-performance time period in the Caribbean.
This February, however, occupancy fell 2.7% year over year, and the absolute level (73.4%) was the lowest for the month since 2010. Regardless of the occupancy drop, average daily rate (ADR) stayed almost flat (-0.2%), while the absolute level ($245.52), was the lowest for a February since 2014. As a result, revenue per available room (RevPAR) fell 2.8% to its lowest absolute level for a February ($180.28) since 2013. Overall, this was the Caribbean’s fourth consecutive month of year-over-year demand and occupancy declines.
The performance decreases are especially notable considering that the Caribbean reported a 0.3% decrease in supply from last February—only the second supply decrease since October 2012 (November 2017 was the other). A drop in supply is usually uncommon for a large region, unless a major event, such as a hurricane, causes damage and forces a number of property closures. Supply decreases probably will not become a trend throughout 2018, however, as there are currently 35 projects in construction in the region, accounting for 9,460 rooms. As more time passes, more properties may come back online as well.
February performance decreases were not consistent for every island, however. When examining performance of the islands where STR maintains a sufficient reporting sample, the Cayman Islands experienced the largest year-over-year increases in occupancy (+12.1%), ADR (+16.0%) and RevPAR (+30.0%).
It’s good to see the absolute ADR in Puerto Rico (US$225.58) was the highest for any month in the country since March 2016, while its absolute RevPAR level (US$177.77) was the highest for any month since February 2016. What was different about Puerto Rico in February was that hotel demand actually fell 8.4% from last February, but a steep drop in supply (-15.2%) kept the pressure off of occupancy and rate levels.
Among other select islands, Trinidad and Tobago saw the only other double-digit rise in occupancy (+10.4%), while Curacao posted the second-largest increases in ADR (+15.3%) and RevPAR (+17.6%).
On the other hand, the steepest year-over-year occupancy decline was seen in Cuba (-13.8%).
Post-hurricane regions showed the largest ADR decreases, mainly due to reporting properties being closed for renovation, which means less of a sample was available.
For questions regarding hotel data reporting in the Caribbean, please contact Rico Louw, Client Account Manager—STR, at rlouw@str.com.