Survey notes decline in region’s hotel profits in 2009
Caribbean hotels, including those in The Bahamas, saw profitability drop by more than 50 percent in 2009 even with significant cost cutting measures in place, according to the recently-released KPMG 2010 Caribbean Hotel Benchmarking Survey.
“Profitability in 2009 fell by more than 50 percent when compared to 2008,”read the report.”Faced with cost-conscious guests and shorter booking windows, the industry actively discounted rates in an effort to maintain occupancies. Despite lowering rates in 2009, some properties still posted lower occupancies.
“As such, occupancy in 2009 was down 7 percent over 2008. Moreover, guest spending on incidents dropped as visitors sought to cut back on vacation expenses. While there was only a slight decline in 2009’s average rates, the overall result was a nearly 14 percent drop in 2009[revenue per available room]when compared to 2008.”
The good news, said the report, was that a rebound may be in sight for 2011, given rates and occupancies began to recover this year as properties implemented a number of performance improvement strategies. Properties in The Bahamas represented about 8 percent of those covered in the survey. Full service hotels across the region accounted for 80 percent of the participants.
The reported also noted that this country was not the only one in the region to cull back on workers in the industry, with the average number of full time employees declining just under 200 per property in 2009 when compared to the 2008 period.
The survey said the global economic downturn and the uncertainty that followed added to the issues the Caribbean properties were experiencing.
“Additionally, hotels continued to be challenged by escalating crime and social unrest as well as managing energy costs, increasing taxes and average employee costs, with limited ability to pass on increases to guests,”said the report.”In 2009, some properties were also affected by extended closures due to hurricane activity or the decision to conduct extensive renovations.”
Despite moves to boost visitor arrivals from outside of North America, the survey is pointing to nearly 70 percent of visitors coming from the U.S. market placing that destination as the number one source market. And while there has been much talk of diversifying The Bahamas’product offerings outside of sun, sand and sea, the survey points to the”beach”remaining the number one amenity. Nearly 60 percent of the properties listed that as the top amenity.