Caribbean Hotel Room Rates Are Getting Lower
It was bound to happen.
After six straight months of occupancy declines in the Caribbean, the region’s hotel room rates were down in year-over-year comparisons for the first time in 2019.
Compared with September 2018, Caribbean hotel occupancy dropped 6.2 percent as supply jumped 3.3 percent and demand fell 3.1 percent, which was likely due to the effects of Hurricane Dorian and the lingering perception following the hurricane.
During previous months this year, Caribbean hoteliers showed their pricing confidence by continuing to raise average daily rate (ADR) even with lower occupancy levels.
That changed, however, in September with a 3.0 percent decrease in ADR.
The declines in both occupancy and ADR caused RevPAR to drop 9.0 percent—the largest decrease in the metric this year, according to our analysis.
Year-to-date numbers are still positive, with ADR up 7.2 percent, offsetting a 3.2 percent decline in occupancy and resulting in a 3.7 percent increase in revenues in the Caribbean region.
In absolute values, September was the Caribbean’s lowest month of the third quarter: occupancy (46.5 percent), ADR (US$145.78) and RevPAR (US$67.76).
STR’s 2019 forecast for the region predicts a slight decrease in occupancy (-0.8 percent) but a 1.1 percent increase in ADR and a 0.3% lift in RevPAR.
With the winter season starting this month, Caribbean hotel performance should likely end the year with overall positive performance.
On the islands where STR maintains a sufficient reporting sample, Turks and Caicos experienced the highest rise in September occupancy, at 30.2 percent, which resulted in the largest jump in RevPAR (+38.0 percent).
The Cayman Islands posted the largest lift in average daily rate (+11.0 percent, significantly bucking the regional trend.
Puerto Rico saw a 16.5 percent decrease in RevPAR, due to declines in occupancy (-12.3 percent) and ADR (-4.8 percent).
On the development side of the industry, there continues to be a steady increase in the pipeline.
There are currently 61 hotels accounting for 15,204 rooms in construction in the Caribbean, according to our most recent data for the region.
Additional questions regarding hotel data reporting in the Caribbean can be directed Rico Louw at rlouw@str.com.
