Caribbean hotel industry a “comeback kid”

Led by a robust leisure market, the Caribbean experienced strong hotel performance in 2022 as almost all travel restrictions were lifted after being a large hindrance for some countries throughout 2021.

Full-year occupancy came in at 60.7%, which was up 36.7% year over year, and down just slightly from 2019 (-3.2%). The region’s lowest occupancy occurred in September (48.9%)—a typical calendar occurrence in the midst of Hurricane season—but peaked recently in December (66.1%) because of holiday travel.

Among key countries in the region, Curacao (70.7%), Turks & Caicos (70.3%), and Puerto Rico (69%) led in occupancy for the year. Turks & Caicos also saw the strongest occupancy recovery in the region, +12.3% over 2019.

Bottom performers, St. Kitts & Nevis (26.3%), Anguilla (37.3%) and the Cayman Islands (46.4%), continued to struggle due to travel restrictions that persisted for most of 2022. The Cayman Islands, for example, started the year with an occupancy level of just 15.4% in January 2022 before reaching 76.5% in December 2022. St. Kitts & Nevis was the least recovered in terms of occupancy, as the metric sat 39.5% below the pre-pandemic comparable.

The Caribbean's hotel industry showed full recovery in both average daily rate (ADR) and revenue per available room (RevPAR) (in US$), which were up 27.4% and 31.6%, respectively, in nominal terms. Without adjusting for inflation, those increases were actually the largest among the STR-defined Americas subcontinents. Top RevPAR performers included the Bahamas (+53.7% over 2019), followed by Saint Lucia (+46.6%) and Saint-Barthelemy (+42.7%). Saint-Barthelemy also boasted the highest ADR at $2,299.23, which was a 49.4% increase over 2019 and was second to Saint Lucia’s 54% increase in ADR over the pre-pandemic comparable.

Among resort-heavy markets across the globe, Nassau was among the top in terms of performance. Resort supply continues to grow across the Caribbean, with roughly 14,300 total rooms in construction. Of those rooms in construction, 9,035 are set to open in 2023. Among the countries with rooms in construction, the Dominican Republic comes in on top with 3,618 rooms across 17 properties, followed by Jamaica with 2,303 rooms across four properties.

When looking at month-to-date data through 28 January 2023, the region is already off to strong start to the new year, as occupancy (69.8%) was higher than both 2022 (53.6%) and 2019 (69.5%). ADR and RevPAR have also made a big splash in January, coming in at roughly US$350 and US$245, respectively.

With most restrictions off the table, Caribbean hotels can expect to sustain the recovery seen in 2022. While the region benefits greatly from neighboring U.S., international travel from other countries will be one to watch throughout the year as the segment lacked in 2022.