Caribbean hotels opened 2020 with the region’s lowest January occupancy level since 2011, according to data from STR.
For the month, occupancy was down 3.7% year over year to 66.5%. Average daily rate (ADR) also fell 1.5% to US$253.09, and revenue per available room (RevPAR) dropped 5.1% to US$168.34. Continued supply growth coupled with softer demand pressured occupancy levels and appeared to shake hotelier pricing confidence.
The month showed 211,048 more room nights available compared with last year and 60,381 fewer room nights sold.
On the islands where STR maintains a sufficient reporting sample, Trinidad & Tobago experienced the only double-digit rise in occupancy (+12.4%).
The U.S. Virgin Islands recorded the largest increases in ADR (+44.1%) and RevPAR (+50.7%).
The Dominican Republic, on the other hand, reported the only double-digit drop in occupancy (-12.0%), which resulted in the largest drop in RevPAR (-19.6%). New inventory growth, along with negative press around safety in the country, has affected performance levels.
Curaçao posted the steepest decline in ADR (-9.4%).
When looking at Puerto Rico, occupancy increased 2.5% thanks to a 6.4% jump in demand.
Hoteliers were not able to maintain rates (-7.1%), however, which resulted in a decline in RevPAR (-4.8%).
As we noted last month, according to our forecast partner, Tourism Economics, overnight arrivals to the Caribbean showed an 8 percent increase over 2018.
A good sign for the Caribbean moving forward, U.S. outbound travel spending is also growing at a rapid pace, an average growth rate of 7.6% over the past five years.
Whether or not that outbound travel spend dips amid concerns over the recent coronavirus outbreak remains to be seen.
Without any impact from the coronavirus outbreak being factored in the equation, we are projecting occupancy growth in the range of +1% to +3% for 2020, with ADR in the -1.5% to +0.5% range and RevPAR in the -1.5% to +3.5% range.
We will release updated forecasts throughout the year.
Investment and development will continue in 2020, with the Dominican Republic leading in both construction activity (15 hotels, 6,356 rooms) and projected openings for 2020 (9 hotels, 2,658 rooms), according to STR’s AM:PM platform.
As for brands, Wyndham Grand leads in 2020 projected room openings with a pair of projects accounting for 618 rooms.
Additional questions regarding hotel data reporting in the Caribbean can be directed to Rico Louw, client account manager at STR at rlouw@str.com.
— CJ