High-ranking executives across the hotel industry explained why they remain optimistic about the long-term potential across Caribbean destinations.
MIAMI—Executives from some of the largest hotel companies on the globe have high hopes for the Caribbean.
Despite lingering aftereffects from a rash of hurricanes in late 2017, hoteliers speaking during the recent Caribbean Hotel & Resort Investment Summit were optimistic about traveler interest and long-term growth potential in the region.
The Caribbean as a loyalty driver
Ian Carter, president of global development for Hilton, said his company’s presence within the Caribbean is a key driver for its loyalty program, as Caribbean resorts are the types of destinations that travelers want to visit.
“Many (Hilton Honors members) look to redeem points at resort-type hotels,” he said. “So anything we can do in the region is important to us.”
He said his company in particular has significant opportunity for growth in the region through its soft-brand collections—Tapestry and Curio. He said those soft brands can be appealing to resorts that have not “performed to full potential.”
“We bring the commercial engine (of Hilton) … and that’s the kind of thing in the Caribbean that’s an opportunity for local owners,” Carter said.
Bill Stadler, chief investment officer for Aimbridge Hospitality, agreed that soft brands have potential in the region in part because of their cost structure and the flexibility they provide.
“There’s flexibility in design versus hard brands,” he noted.
An opportunity to lure travelers from Mexico
While much of the talk at CHRIS revolved around how negative, and often inaccurate, perceptions related to hurricane damage have been a drag on the Caribbean, Graeme Davis, president of Baha Mar, said destinations like his megaresort in Nassau, Bahamas, can benefit from negative perceptions in nearby Mexico.
He said worries about crime and general security issues in that country have led to a flight of group business from Mexico to places like the Bahamas.
“Many corporations have mandates for travel restrictions into Mexico,” he said. “The Caribbean as a whole should see a positive impact from that.”
He said he doesn’t believe hurricane worries will act as a drag on the region much longer.
“I’ve lived in the Caribbean for 25 years, and I know everybody has short attention spans,” Davis said.
Jamie Sabatier, CEO of Two Roads Hospitality, said his company remains interested in the region because its target audience of affluent travelers is as well. He said there’s great potential within the Caribbean to offer the type of experiential travel that those guests want. He said his company is particularly interested in properties in the region with “some residential component.”
“We’re looking at a number of higher-end developments where the developer or owner is catering to today’s customer,” he said.
Room for different products
John Issa, chairman of SuperClubs, said he’s waiting to see what the next innovation will be among Caribbean resorts. He said he “enjoys the creative side of the business” and has been willing to gamble in the past on things like the first all-inclusive resort with open bars and the first family-oriented all-inclusives.
“What I’ve noticed is (the industry) has been building more and bigger, but I haven’t seen anything revolutionary happen,” he said.
Alex Zozaya, CEO of Apple Leisure Group, agreed that the industry needs to be more innovative to keep pace.
“Look at fashion or technology and the way they’ve been evolving products faster and deeper than hospitality in general,” he said. “But with that said, all-inclusive (resorts) are completely different than they had been in the past. They’re more sophisticated and have customers we never had before.”
Xavier Mufraggi, president and CEO of Club Med North America and Caribbean, said the major move in the all-inclusive space is a push upward with a focus on experiential travel for high-end guests. He said that means defining “all-inclusive” as a package of a greater variety of experiences.
“The new cycle we’re starting to discuss is all about that experience,” he said. “If all-inclusive is just inclusive of F&B in the price, then people can do that themselves. That’s not value.”
Hope remains in Cuba
The administration of U.S. President Donald Trump threw cold water on the general sense of optimism around Cuba when it pulled back on plans to open up travel between the two countries, but executives said an expansion of U.S.-Cuba travel is still a matter of if and not when.
Zozaya said the country still sees strong demand from markets in Europe and Canada. He believes expanded presence in Cuba will pay dividends when relations with the U.S. are normalized.
“It’s going to be slow, but (travel between the U.S. and Cuba) is certainly going to open up,” he said. “There’s no other way. And it’s a huge opportunity for the overall region to grow.”