The majority of hoteliers in the Caribbean report an ”encouraging outlook” for tourism this year after a “mixed” performance in 2016.
The result comes from a survey by the Caribbean Hotel and Tourism Association which found that 81% support the upbeat forecast for 2017.
Hoteliers reported an even split on revenue performance for last year with 47% recording an increase and a similar percentage reporting a decrease.
While expectations for the year were higher initially, the mixed performance in 2016 came after an exceptional year for Caribbean tourism the previous year.
The association’s director general and chief executive Frank Comito said: “Hoteliers entered 2016 with high performance expectations but these were tempered as a combination of unanticipated factors surfaced during the year.”
These events included a warmer than usual winter in the region’s primary feeder markets, Canadian and UK exchange rates, Brexit, the threat of Zika, and political and economic certainty in parts of the world, according to the survey respondents.
Despite this, the profitability picture improved over the previous year, with most hotels registering a net profit in 2016.
Seventy-eight per cent of respondents reported a net profit while 22% reported a net loss.
More than two-thirds (67%) anticipate an increase in revenue in 2017, and 56% expect a slight improvement in profits.
More than half (55%) of hotels also increased capital expenditures in 2016, with a quarter of those investing more than 10% over 2015 levels.
“This is a positive sign and an indication of long-term confidence by Caribbean hoteliers in the industry,” Comito said.
Although room occupancy decreased for just more than half (51%) of the reporting hotels, 29% reported an increase in occupancy.
More hoteliers are optimistic for 2017, with two-thirds expecting an improvement in occupancy.
Despite the fact that average daily room rates (ADR) were reduced by 45% of hotels, as many as 42% increased their rates.
About 55% expect to increase ADR this year while only 15% expect downward pressure on rates.
Employment levels were maintained by 55% of respondents in 2016, while 17% reduced staffing levels and 28% hired more staff. This pattern is anticipated to continue in 2017.
The poll, conducted during the first two weeks of January, included a representative sampling of hotels throughout the Caribbean of varying sizes and categories.
It covered their 2016 performance and 2017 expectations for factors in areas such as employment levels, revenue, profits, capital spending, room occupancy, and rates, each forming the basis for assessing the state of the tourism economy.