MIAMI – Delegates attending a Caribbean Hotel & Resort Investment Summit here said that an economic recovery in the Caribbean will be a prolonged one, with the result creating a different environment for the hotel industry.
“It seems the hurricane has passed over; there’s still a little cleaning up to do,” said Simon Townend, partner with KPMG Corporate Finance. “We hope there’s not another one on the horizon.”
He said the hurricane metaphor is completely appropriate, because “a dramatic cleansing is necessary for any ecosystem to survive.
“The question in everyone’s mind is: Are we turning the corner?” Townend asked.
He said receiverships and liquidations have been prevalent on the Caribbean landscape for the past few years, adding that high-profile properties involved in such situations include: Bimini Big Game Resort and Grand Isle in the Bahamas; Temenos in Anguilla; Lambert Beach Resort in the British Virgin Islands; and Discovery at Marigot Bay Resort and Spa in St. Lucia.
Townend said many of the troubled assets have residential components, which have fallen out of favour with lenders, stating that fewer banks are lending overall.
“Many of those without a physical presence in the region have retreated entirely,” he said.
But the Toronto-based executive said all is not doom and gloom.
“The good news is that tourism appears to be on the rebound,” he said, stating that one silver lining for the region is a number of major infrastructure projects have been completed or are in the works—including an airport upgrade and a port addition in the Bahamas and big projects in Jamaica.
In addition, Townend said there are also some hotel projects that are off the ground, including: Grand Palladium in Jamaica; Albany and BahaMar in the Bahamas; Oil Nut Bay in the British Virgin Islands; a Four Seasons and a Courtyard by Marriott in Barbados; and Buccamant Bay in St. Vincent and the Grenadines.
Warrant Jestin, senior vice president and chief economist for Scotiabank, said that while the recovery is on, “it is still very incomplete.”
He said his company expects economic growth to moderate during the next year, even in places such as China, where growth will still be more robust than in the rest of the world. (CMC)
