Although large swaths of the Caribbean's tourism sector
remained relatively strong this past summer, a recent steep decline in hotel
RevPAR and occupancy throughout the region could signal longer-term trouble
According to data from STR, hotel occupancies across the
Caribbean began dropping in April and continued to steadily slip through the
In August, overall occupancies in the region fell 5.6% from
the same period last year, to 62.5%. Likewise, Caribbean RevPAR started
trending downward in June and July, eventually falling 5.3%, to $112.54 for
"Room supply in the Caribbean continues to grow at
around 3% [year-to-date], which is certainly healthy," said Jan Freitag,
STR's senior vice president of lodging insights. "But that growth is
happening while demand is weakening, and that then translates into occupancy
declines. And if there are occupancy declines, we normally see rate growth get
hit. Still, this is a market-by-market situation, and not everyone in the
Caribbean is being impacted the same way."
Among the destinations hit hardest by slowing demand is the
Dominican Republic, which was left reeling this summer after a spate of tourist
deaths there led to a steep drop-off in bookings. In June, following widespread
media coverage of the incidents -- which many consumer media labeled "mysterious,"
even though most were quickly found to have been due to natural causes -- STR
reported that hotel occupancies in the Dominican Republic plummeted 12.7%, to
Occupancies dropped further in July and August, down 20% and
16.2%, respectively, while August RevPAR in the D.R. dipped nearly 26%, to
Frank Comito, CEO and director general of the Caribbean
Hotel and Tourism Association (CHTA), said, "The D.R. has seen a drop in
RevPAR and ADR, which hopefully they can get back up. If one of the [market]
leaders is having to discount in order to bring back business that they've
lost, that's not good for the entire region. But typically, when we see a
destination have some unfortunate publicity like this, the impact lasts for
several months, and then it actually starts rebounding rigorously."
According to Julie Banning, a travel advisor with New
York-based Embark, the Dominican Republic is primed to bounce back, and the bad
press appears to be petering out.
"I don't think this is going to affect the D.R. in the
long term," Banning said. "Our clients feel confident when they
travel to the five-star resorts there, and we have a lot of repeat travelers
who want to continue going to the D.R. And nowadays, when you look at the news,
where did that story go? Everyone seems to have moved on. I think we'll see the
numbers going back up this winter."
A rebound in the D.R. alone, however, might not be enough to
solve the Caribbean's hotel occupancy problems. Cuba and Puerto Rico also saw
summer business slow, with the former impacted by the Trump administration's
travel restrictions and the latter facing lingering challenges following 2017's
"There's still this image out there that Puerto Rico is
recovering from the hurricane," Banning said. "Some people still
think there's devastation, when that's not true."
For August, Cuba's occupancy slipped 13.1%, to 50%, and
RevPAR in the market dropped 31.5%, to $31.77, according to STR. Concurrently,
Puerto Rico's occupancy was down 4.3%, to 68.1%, and RevPAR fell 3.3%, to
Meanwhile, the fact that traveler misconceptions continue to
plague Puerto Rico certainly doesn't bode well for the Bahamas, which just last
month was battered by Hurricane Dorian.
But while the vast majority of the Bahamas was spared any
significant damage -- with destruction largely limited to Grand Bahama and the
Abaco Islands -- both Banning and Comito expressed concern about post-storm
"Only 20% of the Bahamas has been impacted,"
Comito said, "but the rest of the country is still dealing with the
perception that they've been affected."
Threatening to further exacerbate the region's woes is the
demise of tour operator Thomas Cook, which abruptly ceased operations in late
September. Although the company's German airline, Condor, has remained in
business with the help of a government-backed loan, the group's collapse is
expected to hamper European lift to the Caribbean.
Sue Springer, director for corporate and government
relations at London-based trade and investment consultancy the Caribbean
Council, estimated that Thomas Cook accounted for 62% of all Caribbean flights
from Germany and roughly 10% of Caribbean flights from the U.K.
Comito listed Barbados, St. Lucia, Jamaica, Cancun and the
D.R. as destinations most likely to be impacted.
"We were expecting 400,000 visitors during the
remainder of the fall season and winter season via Thomas Cook, and that
includes Condor [business]," he said. "However, the German government
bailing Condor out will protect a good portion of that business, around 60% of
Comito said he is optimistic that the gap left by Thomas
Cook will soon be filled, with the CHTA working to attract tour operators and "find
alternative ways to meet" existing European demand.
He also remains optimistic about the Caribbean as a whole,
pointing to positive trends in Turks and Caicos, Aruba, Anguilla and Barbados
as well as an improving outlook for Cancun, where issues surrounding
higher-than-usual levels of sargassum appear to be subsiding.
"I wouldn't say there are any yellow flags for the
whole region yet at this point," Comito said. "Out of the 16
destinations reporting for August, nine of them were up on occupancy, and seven
were down. Assuming we don't see an acceleration of any kind of global economic
downturn, growth in demand has kept up with supply, and we're hopeful that will