Most of us are feeling the pain of a slow economy and less income from far fewer visitors. The fall off in our stay-over and cruise ship tourism has certainly taken a toll, especially over the last year. Statistics from real estate sales to island tours indicate that anyone in tourism related businesses has been negatively impacted.
However, the cruise ship side of tourism is now showing some slow improvement, with the last four months (May through August) of this year having a slightly higher number of visitors than last year. The progress being made on moving the George Town cruise ship berthing terminal forward is a huge, long term positive for this type of tourism and will ensure a more steady and consistent revenue base for government.
Unfortunately, the same improvement is not being seen for stay-over tourism, which has been down every month for a year, since September 2008. It is critical to the survival of many businesses and our image as a tourism destination, that this trend be reversed, right now! Part of the solution needs to be new, better quality tourism accommodations, especially top international brand hotels, to gain back the business that was previously here and to expand further into the affluent traveller market.
We just cannot expect tourism to increase and prosper, when we are losing room inventory and not replacing these hotel accommodations. Below is a general overview of how many hotel rooms we have lost since 2004:
1) Hyatt Hotel (inland side of Seven Mile Beach) 235 rooms and suites
2) Treasure Island Hotel 300 rooms approximately
3) Divi Tiara Resort (Cayman Brac) 71 rooms and suites
4) Marriott Courtyard 231 rooms and suites
5) Beach Club Colony (in the next few months) 41 rooms
These hotels represent about 878 rooms out of service. With stay-over tourism spending of approximately US$198 per day, per person and occupancy rates averaging 60 per cent for hotels, the Cayman Islands are losing US$76,143,672 in revenue per year, based on double occupancy for these hotel rooms. That is an incredible amount of money not being spent on the many businesses that depend on these funds.
Every year that these hotels sit idle and are not in business, we are losing at least US$76 million dollars that could be flowing into our country. As an example, with the Hyatt Hotel not being opened for five years, the cost to this country is over US$100,000,000 in revenue lost from stay-over tourist spending, not including the multiplier effect throughout the economy. And that is just one hotel. We could sure use that money, now!
If we focus on attracting five-star international hotels, we will have access to a much broader and more shock resilient market of tourism than our condominiums, due to the locations of these hotels across the globe and their worldwide reservation systems. But, to attract this type of premium hotel, we need the tourism numbers to entice investors/developers to consider an investment of this magnitude. In order to rise to this level of tourism, we need to diversify our tourism base and be able to draw summer time business from areas of the world such as Europe.
Something needs to happen first – either we completely focus on increasing tourism, so new flights, gateways, and hotels will come forward (which we are hard pressed to do so without extending our runway) or we need to provide financial incentives to new international 5 star hotel groups to develop here and have them help to draw attention back to Cayman, so tourism increases.
It is critical that we take a comprehensive approach to tourism and look at it as a three pronged industry, comprised of:
a) Stay-over tourism arriving by flights and staying in hotels and condominiums
b) Cruise ship tourism arriving in George Town with easy access through a new port
c) Overseas yachting tourism including the mega and super yachts with a deep channel access into the North Sound
By facilitating and supporting this broader tourism base, we will have a more sustainable industry with visitors who will buy properties and use services. But… this will involve a major, dedicated commitment to improvements and these priorities cannot change with the next government. The revenue gained from stamp duty earned through real estate sales in the resort markets like Seven Mile Beach, as well as customs duty from hotel construction can fund a lot of government programmes and infrastructure improvements.
To be successful, we must commit to an extended runway and start to plan for a whole new airport that will allow proper growth and expansion for the future, a new cruise ship terminal and berthing, and a deep channel along the eastern edge of the North Sound to connect our major tourism developments like the Ritz-Carlton’s Dragon Bay and attractions like Camana Bay, to name a few.
There is no point in spending countless millions of dollars advertising for tourism, if we then make it difficult for these same tourists to get here, due to needing multiple flights or having to use tenders to get to shore or not being able to access the North Sound. Our tourism has to be a quality experience across the board, while making access to our country easy and straightforward.