CJI Conversation: Mark Durliat, CEO of Grace Bay Resorts
By Joe Pike, Special Contributor
As the coronavirus (COVID-19) continues to keep the Caribbean hotel industry at a standstill, many hotel developers and investors are struggling to keep existing projects afloat, and are also uncertain about how long the recovery in lost revenue will take once the pandemic is over.
But Mark Durliat, CEO and co-founder of Grace Bay Resorts in Turks and Caicos, said there are measures hotel developers can take to protect investments both now and after the coronavirus becomes a thing of the past.
Once such practice, incentivizing buyers, is one that Durliat is already preaching.
Rock House, Grace Bay Resorts’ cliffside residential resort that is due to open next year, is “offering buyers some incentives that will provide a taste of Grace Bay Resorts’ first-class service that they will eventually experience as Rock House owners,” according to the company.
These include two, three-night stays at sister property, Grace Bay Club; a private chef experience once per stay at Grace Bay Club and complimentary gourmet meals; a signature “Rock House” couples massage at Grace Bay Club; and a luxury boating experience departing from Grace Bay Beach with a tour of the Rock House site.
In a Q&A with Caribbean Journal Invest, Durliat shared additional insight on staying proactive during the crisis and what to expect once it’s over.
Can you please provide three-to-five top tips on how real estate developers in the Caribbean can attract buyers during the pandemic?
Regular communication is critical. Inform buyers on where the project stands in this pandemic and how it is affecting you directly. Consider what the financial makeup of the project is and if it can withstand this challenge. Be transparent as to where capital is coming from and what is needed to achieve the goals of the project. Be honest.
Next, work with local governments to facilitate incentives to lower costs. Turks and Caicos, for example, implemented a 50 percent reduction on transfer duties based on recommendations from the real estate industry. This will allow buyers to enter the market for a substantially lower tax cost and will help stimulate investment in an otherwise slow period.
Finally, it is important to remind buyers about the fundamentals of a particular property or destination. Why did a buyer initially focus on that location? What economic, geographical, legal or monetary advantages attracted the buyer in the first place? Have these changed since early 2020, or are they likely to change with the pandemic? If the answer is no, and if there are newly implemented economic or tax advantages to buying, there is still a good reason to consider buying.
Buyers need to consider whether the particular developer has a track record of delivery through other crises and if he or she has the resources on the ground to facilitate long-term investment success. If so, it may be easier to see through the pandemic and see that the other side may offer some opportunity.
When the pandemic ends, do you expect development in the Caribbean to boom? Why?
Our view is that development will return very gradually and ultimately find similar footing to the past few years.
The Caribbean is one of the most popular tourist and second-home destinations in the world. People regularly dream of their times spent in the Caribbean and have for decades. There are millions still who have yet to experience it.
The reliability and reputation of the region as a place to relax, enjoy the best weather and beaches, and escape from the ordinary is indelibly planted in the minds of travelers. It is the tourism traffic that creates development activity. If we focus on what we do very well–tourism–the development will follow. It always has.
Without sounding insensitive, is the aftermath of a disaster/tragedy/pandemic the best time to buy/invest? After all, the industry tends to see this after every major Caribbean hurricane.
This is different in that many travelers who capitalize on a post-hurricane opportunity have not been hurt economically in their hometown by that same hurricane.
The more appropriate comparison would be post-9/11 or the 2008 economic collapse, when the entire world faced a downturn at the same time, in travel, investment and otherwise. The pandemic may have, or likely will have, negatively affected buyers in their own world.
In all these scenarios, destinations worldwide rapidly create incentives for new investment. This will be no different in that respect, but these incentives may be slower to create the desired effect.
There are always those who will continue to have sufficient disposable wealth to invest following the crisis and for those people, there is no question that the current crisis will offer significant long-term opportunity.
Can you share any more details about the incentives you are offering buyers?
We are offering buyers benefits like complimentary five-star vacations in our other branded properties in Turks and Caicos during the construction period.
We will also be facilitating the transfer duty benefit in working with our local counsel and government.
Once this benefit is official and ready to roll out, buyers will receive a white glove service from our teams in the processing of this for our buyers.
