Four years of double-digit NOI growth for Caribbean hotels.

Caribbean hotels are continuing their run of double-digit net operating income (NOI) growth, according to the 2015 edition of Trends in the Caribbean Hotel Industry by PKF Consulting, a CBRE Company. The average Caribbean hotel saw a 17.3 percent rise in NOI in 2014, marking the fourth year in a row that NOI has increased by double digits in the Caribbean. qatar property

Revenues and expenses at the hotel

The Caribbean hotel industry is made up of a large number of exclusive resort properties in different destinations, which allows for a range of facilities and amenities to be offered.

Room sales continue to be the most important source of revenue for Caribbean hotels (57.6% of total revenue in 2014). Room sales increased 7.4% last year at hotels in the Trends survey sample, owing to a 5.1 percent rise in average daily rate (ADR).

"Hotels in the Caribbean with an ADR of more than US$300 were able to increase their prices without affecting occupancy in 2014. The types of travelers who frequent these establishments are less price sensitive and can afford to pay more "PKFC's managing director, Scott Smith, said. "The more modestly priced houses, on the other hand, had a harder time raising their prices. All-inclusive resorts, which offer a good price-value proposition to rate-sensitive travelers, are the competition for these properties."

In the survey sample, the average Caribbean hotel was able to convert a 5.0 percent rise in sales into a 17.3 percent increase in profit. "The ability of Caribbean hotel operators to restrict expense growth to just 2.2 percent was the primary reason for this increased flow-through. In the area of labor costs, particularly significant progress was made "Smith stated his opinion.

Total labor costs rose by 1.6 percent in the country, compared to 3.7 percent in comparable U.S. resorts. "Available labor is plentiful in most Caribbean countries, and wages are modest. The Caribbean area has yet to see the same levels of job growth that has pushed up salaries in the United States "Smith continued.

In comparison to the rest of the country, utility prices in the region have traditionally been high. However, study participants reported lower utility costs at their hotels for the second year in a row. "For both financial and ethical reasons, Caribbean resorts have been at the forefront of green and sustainable practices. They are now reaping the benefits of these energy-saving activities "Smith made a point.

Despite good cost management in 2014, Caribbean resorts are still losing money compared to comparable U.S. resorts. In 2014, the average Caribbean resort in the study made a profit margin of 19.7%, compared to 29.0% for their American counterparts.

 

Cuba is a country in the Caribbean.

While most people around the world have had access to the newly opened Cuban tourism market for decades, the revived opportunity for U.S. citizens to visit the country has sparked a lot of interest.

"The news that Cuba and the United States are once again on friendly terms has caused some confusion among the other Caribbean countries. These countries are concerned that American tourists will flock to Cuba, resulting in a loss of airlift and cruise lines "Smith clarified. There are currently twelve types of travel to Cuba that are allowed for US residents, but leisure travel is not one of them.

The 2015 edition of Caribbean Trends delves further into the current events surrounding Cuban tourism and presents data on tourist arrivals in 2014.

 

Mixed Messages

The Caribbean's overall outlook is bright, with occupancy, ADR, and income all set to rise. "It will be 'crisp,' as the locals claim, and the Caribbean hotel market will continue to rise at a healthy pace, according to financial data. While their direct effect will not be a problem for some time, new lodging developments in the area have sparked some concern about over-building "Smith came to a conclusion.