Leaders identify emerging trends at CHRIS

MIAMI — A wider range of upmarket all-inclusive products, more luxury mixed-use hotels, brand proliferation, including soft brands, along with wellness tourism were identified as the leading trends in Caribbean hotel development during the View from the Boardroom session at Monday’s opener at the Caribbean Hotel & Resort Investment Summit (CHRIS) in Miami.

Remington Hospitality CEO Sloan Dean; Club Med President and CEO of North America and the Caribbean Carolyne Doyon; Sandals Resorts Group CEO Gebhard Rainer; Playa Hotels & Resorts CEO Bruce Wardinksi; and moderator John Fareed, global chairman of Horwath HTL took to the stage at the Loews Coral Gables talking about how higher-spend customers are creating expanding levels of expectation for products and experiences, and what they are doing to deliver.

With higher spend also comes an expanding pie and new development opportunities in the Caribbean. Even better, growing demand still triples supply increases there, Dean stated. “Pent-up demand hasn’t stopped; demand has changed,” he said in reference to higher-spend consumers looking for experiences.

Rainer suggested, however, that with ongoing price inflation will come a more value-conscious consumer, starting now and into 2025. Yes, the strong demand for the Caribbean remains, but with consumers saving less and those who can afford the rate once again having more choices globally, operators have to deliver the value or they will go elsewhere.

Wardinski added that travel patterns are also reverting to old norms for the Caribbean with very active and profitable high seasons followed by more normalized summers with consumers going back to Europe and further afield during the summer.

But there is more good news for the region as Dean cited increased capacity from airlines, which he does not expect to retreat. In fact, earlier in the day at CHRIS, data suggested airline seat capacity was up 6.1% in 2023.

Looking more mid- and long-term, Club Med’s Doyon said it is incumbent among operator and developers to become pioneers of new destinations, be it greenfield development or conversions – likely more conversions due to the continued high cost of new development and the ongoing preponderance of independent operators in the Caribbean. She cited a new Club Med destination about 90 minutes from Punta Cana in the Dominican Republic called Michès Playa Esmeralda, which was more of a sleepy fishing village and now has many developers beating a path to seek out opportunities. “And I don’t have to tell you what it has done for the local community,” she said.

You can offer a top-end steakhouse, but if the service fails the experience of luxury is gone.

Gebhard Rainer

Share this quote

Finding sources of finance remains a challenge, but most of the panelists have had success. Doyon said Club Med still has the might to find investors whereas smaller developers will have a tougher time. Family-run Sandals has a strong track record with local banks and continues to source them without too much issue. Publicly-listed Playa is using free cash flow and cash on the balance sheet without having to source fresh debt. In fact, Wardinski cited a recent Playa deal in the Dominican Republic where the investor was able to competitively source banks for debt and found pension funds looking to invest.

Dean cited the branded residence aspect of development making the justification for hotel projects. “The debt market [in many Caribbean countries] with the right sponsors, the right project is better than in the U.S. right now,” he said.

It comes down to execution

After development comes execution to drive repeat business and Dean suggested at the higher end of the market it means getting F&B right – ranging from cocktails to vegan. “The experience has to be more than just a beach and bar,” he emphasized.

Then, Dean said, its experiences, ranging from pickle balls to experiences both on- and off-site. “But it starts with the kitchen and with the F&B experience because you can’t have a luxury experience if the steak is overcooked, or the wine list isn’t inspiring.”

Rainer agreed, adding that quality service delivery in an increasingly casual and experiential luxury environment is a must, as well. “You can offer a top-end steakhouse, but if the service fails the experience of luxury is gone,” he said.

Doyon added that luxury is very personal and understanding the difference in the makeup of guests also matters, explaining that the luxury markers are different for Americans and Europeans. “If you know who your clients are you can adapt your product. Those are the basics of luxury,” she said.

Wardinski added that luxury means creating services like an amazing fitness center guests simply will not find elsewhere. Or, he said, it means continually recreating concepts to creating higher levels of demand. “People want a great experience and are willing to pay for it if it’s good,” he said.