Caribbean hotels had big profit growth in 2012, according to PKF Consulting USA's 2013 edition of Caribbean Trends in the Hotel Industry.
Caribbean hotels reported a 10.9% increase in net operating income in 2012, the second consecutive year with a double-digit increase and the highest annual growth since 2008.
“While this continued profit growth is encouraging, the Caribbean lodging market still is not back to pre-recession levels. Recovery in the Caribbean is occurring, but lagging behind the rates experienced in the U.S.,” said Scott Smith, PKF Consulting’s president. “This is a mixed message for a region whose economy depends primarily on the tourism industry.”
Caribbean properties had a 6.4% revenue jump in other hotel operations, meaning that guests are spending more on amenities such as golf courses, casinos and spas.
Profit growth is attracting developers. There are 17,932 rooms either under construction or planned for development, according to the Smith Travel Research June 2013 Construction Pipeline Report.
"In a market where occupancy is driving the recovery, adding too many additional rooms could potentially be detrimental. We believe lodging demand will continue to grow within the overall region, but when supply exceeds demand, complications could be created for individual hoteliers," said Smith.
The largest development to enter the region will be the 2,200-room Baha Mar complex in Nassau, when it opens in December 2014.
"Industry participants wonder whether there will be enough demand to sustain pre-existing Bahamian resorts in addition to Baha Mar, which does have the potential to expand the reach of the Bahamas and the Caribbean as a tourist destination around the world," Smith said.
According to the Caribbean Trends report, airlift continues to be a major issue.
"In order for new resorts to thrive, the Caribbean is in need of increased local and long-distance nonstop flights," he said.Follow Gay Nagle Myers on Twitter @gnmtravelweekly.