CHRIS Day 1: Leaders share optimism, realities

As the industry gathered in Miami on Monday to consider the investment landscape in the Caribbean, leaders pointed to a tourism recovery that is outpacing much of the world. While performance has broadly returned to 100% of record 2019 levels, the region is not without its challenges, such as the high cost of air travel and the shadow of a potential economic slowdown.

Led by Horwath HTL's Global Chairman John Fareed, the leaders on the first “View from the Boardroom” at the Caribbean Hotel & Resort Investment Summit (CHRIS) brought the numbers to life with their perspective, addressing the challenges and opportunities by sharing their realities and approaches to driving profitibility.

Remington Hotels President and CEO Sloan Dean suggested the pandemic represented an inflection point with more being spent on travel and less on consumables. He said it set up nicely for the Caribbean as it attracted vacationers looking for outdoor spaces as well as a more mobile workforce. “It’s here to stay,” Dean said, adding that group and incentive group is back in the Caribbean in a big way at 20-25% over 2019 levels for Remington hotels in the region.

Adding further perspective was Rob Smith, division president, full service for Aimbridge Hospitality. “I don’t like the term revenge travel. “People have realized they value their time more than money,” he said. “They want the best experiences when travel and our suites and rooms with views selling out first. I don’t see that trend slowing down.”

On the development side, Playa Hotels & Resorts President and CEO Bruce Wardinski noted that a lot has changed in the past 10, especially when it comes to the white-hot all-inclusive sector. “No one talked about all-inclusive then,” he said. “The quality level has gone up and up and you see more institutional owners like you see in the rest of the global hotel industry.”

The other boardroom panelist has been an all-inclusive specialist for its entirety and Club Med’s North America and Caribbean President and CEO Carolyne Doyon said they try to retain their differentiation by finding emerging destinations, building low-density spaces integrated into the landscape and staying ahead of the curve when it comes to consumer expectations. “Personalization, experience and freedom of choice is what we focus on to make us different,” Doyon said.

Smith said Aimbridge has been in the all-inclusive space for some 15 years and said based on the experiential movement they are including local dine-around tours to get guests off property.

For Playa, an increased focus on quality F&B to improve the customer experience is working very well, adding that delivering better service mean charigng higher prices. “Offer more, charge more, and charge more, make more,” Wardinski said. “We doubled down during the pandemic on F&B, wellness and entertainment. People laughed when all-inclusive focused on wellness. But it’s a very different world and much better than before.”

Doyon agreed, stating that wellness in the all-inclusive space will continue to grow. “The consumer has changed,” she said.

Development in the Caribbean

Higher interest rates and continuing inflation are slowing the deal pace in the Caribbean, said Smith, whose Aimbridge Hospitality is about to reopen Frenchman’s Reef in St. Thomas after a $450 repositioning.

Wardinski said that higher interest rates and projects slowing is a good thing. He also pointed to political instability as an issue. “There are good years and bad depending on your market,” he said. “Addressing problems like energy, natural catastrophes depend on the strength of the local government and it’s a challenge and overarching threat. If have governments are pro-tourism and collaborate with hotel associations, it is amazing how different things can be. For example, the current administration in the Dominican Republic has been very positive about supporting hotels. It can improve life for everyone who lives there.”

Dean added that debt maturities will be a catalyst for transactions, adding that Remington’s model suggests rates will come down and lead to more details. “But supply is dampened for several years, which is good for operators,” he added.

When development does happen, Wardinski said multi-generational travel needs to be considered. “There should be more connecting rooms, and there are too many kings. Wi-Fi bandwidth is another huge area to consider.”

To close the panel, each leader was asked about a takeaway from the pandemic.

Dean said he learned people [staff] can handle bad news but can’t handle surprises. “The human element of talking and level of transparency goes very far,” he said.

Doyon said she developed more perspective. “I don’t believe we will go through this again, but when things happen, I will step back and take perspective, think things over before making decisions.”

Smith said the industry learned it can handle the very worst shock to its system. More personally, he talked about his daughter being offered a job where she could work from home or the office. He told her about how if he didn’t have an office he would have never had his great career. “I don’t think working remotely is a long-term trend,” he said, adding that his daughter decided to work from home.

Wardinski closed the session by saying the pandemic taught him to expect the unexpected and the need to prepare for anything – exactly what that might be he does not know.