By Rico Louw
CJ Contributor
July marked the Caribbean’s fourth-straight month with a decline in hotel occupancy, and for the second month in a row, we saw a rather steep decline because of lower demand and a rise in new inventory.
In a year-over-year comparison with July 2018, occupancy fell 6.5% as supply rose 3.1% and demand fell 3.6%. Fortunately, hoteliers maintained pricing confidence with a 4.8% lift in average daily rate (ADR)–the ninth consecutive monthly increase in the metric. However, that gain in ADR was not enough to push positive comparisons in revenue per available room (RevPAR), which was down 2.1%. That key industry metric has now fallen year over year for two straight months.
Year-to-date numbers look more promising, as RevPAR rose 6.2% through the first seven months of the year. STR’s 2019 forecast for the region predicts a slight decrease in occupancy (-0.8%) but a 1.1% increase in ADR and a 0.3% lift in RevPAR.
With the winter season starting in November, Caribbean hotel performance should end on the positive side of the spectrum.
Of course, the unpredictability of tropical storm and hurricane season can also throw fluctuations into performance. This week we saw Tropical Storm Dorian track through Puerto Rico and the Virgins Islands. Early reports would indicate minimal damage, but we will keep a close eye on how demand moved when we process August data next month.
In destinations where STR maintains a sufficient reporting sample, Barbados experienced the highest rise in July occupancy (+12.4%). Dominica posted the largest jumps in ADR (+36.5%) and RevPAR (+25.3%).
Puerto Rico saw a 5.4% decrease in occupancy, resulting in a 1.9% drop in RevPAR. ADR in Puerto Rico was up 3.7%.
On the development side of the industry, we don’t expect to see much of a slowing in the pace of new supply entering the marketplace. There are currently 57 hotels accounting for 14,085 rooms in construction in the Caribbean.
Additional questions regarding hotel data reporting in the Caribbean can be directed Rico Louw at rlouw@str.com.