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Caribbean Hotels & Resorts:
The Seasonality Issue

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By Petr Kulic, February 17, 2004 

HVS International has performed a number of appraisals and consulting assignments in the Caribbean in the past several years. In the process, we have inspected several hotels and resorts, and have spoken with hotel operators as well as officials on islands throughout the region. While each of the 32 countries forming the Caribbean is unique, they all share one characteristic: the seasonality of demand. This article highlights some of the seasonality issues, and illustrates how various parts of the region, as well as a few properties, manage the seasonality problem.

Location

Extending from the Yucatan Peninsula to the coast of Venezuela, the Caribbean Islands separate the Atlantic Ocean from the Gulf of Mexico and the Caribbean Sea. Three main groups of islands comprising 32 countries form the Caribbean: the Bahamas in the north, the Greater Antilles (including Cuba, Hispaniola, Jamaica, and Puerto Rico) in the middle, and the Lesser Antilles to the southeast.

Historically, location has been vital to the islands. Assuming that he reached the coast of India, Christopher Columbus mistakenly named the islands the Indies. Subsequently, the islands were renamed as the West Indies, to distinguish them from the East Indies in southeast Asia. Owing to their strategic location along important trade routes, the trade sector was one of the major economic components of the region in the 17th century. Agriculture was another important driver of the Caribbean economy during that era, primarily as a result of an extensive sugarcane plantation originally introduced by Columbus. Today, the islands'  location is more important than ever, as the economy of the region is predominantly driven by tourism, and thousands of tourists, mainly from North America and Europe, pursue their dreams of a warm escape, particularly during the winter months.

Over the past several years, tourism in the Caribbean Islands has fluctuated, corresponding directly to fluctuations in the U.S. economy and the threat of hurricanes, which contributed to substantial declines in those years. This correlation illustrates two primary characteristics of the Caribbean tourism industry: its strong dependence upon the United States for tourist trade and its close relationship to discretionary income levels. The World Tourism Organization estimates the total number of international arrivals at 16.1 million in 2002, down from its peak in 2000 at 17.2 million. It is estimated that in 2002, U.S. tourists accounted for roundly 54% of all arrivals. The United Kingdom and Continental Europe represented 23% of all arrivals.

Overall, and as explained later in more detail, the market suffered from the September 11, 2001 terrorist attacks. The effect, however, was relatively short-lived. More importantly, the region suffered from the softening U.S. economy and decreased demand from Europe, where the long-haul travel has been the hardest-hit segment. Additionally, the Caribbean has been facing more aggressive competition from other warm-weather destinations in Florida, the Pacific, and Hawaii.

Seasonality

It is a popular belief that the weather conditions in the Caribbean are extremely seasonal. In reality, the climate in the Caribbean does not vary significantly during the year, with a majority of the islands achieving year-round temperatures of between 75 and 85 degrees, and relatively low humidity. Although the months of June through November are warmer and more humid, some of these months do exhibit a high level of tourism activity in the region. The following table presents hotel performance in the region, as compiled by Smith Travel Research (STR). STR is an independent research firm that compiles data on the lodging industry; its published data is routinely used by typical hotel buyers. The table shows the marketwide occupancy, average rate, and rooms revenue per available room (RevPAR). RevPAR is calculated by multiplying occupancy by average rate, and provides an indication of how well rooms revenue is being maximized.
 
Caribbean Hotels & Resorts: Historical Trends (STR)
 
2000
2001
2002
Month Occupancy ADR RevPar Occupancy ADR RevPar Occupancy ADR RevPar
January 69.1 % $159.35 $110.11 70.3 % $191.83 $134.86 60.7 % $177.27 $107.60
February 76.6 % $171.20 $131.14 75.5 % $206.67 $156.04 69.2 % $188.57 $130.49
March 79.9 % $172.84 $138.10 76.5 % $191.20 $146.27 68.9 % $187.70 $129.33
April 76.0 % $160.73 $122.15 72.4 % $168.26 $121.82 67.2 % $158.12 $106.26
May 68.8 % $130.83 $90.01 65.9 % $135.37 $89.21 60.7 % $130.40 $79.15
June 64.8 % $122.46 $79.35 64.1 % $122.22 $78.34 62.7 % $121.96 $76.47
July 69.6 % $120.77 $84.06 67.5 % $116.11 $78.37 69.3 % $199.50 $82.81
August 70.4 % $116.81 $82.23 65.4 % $118.97 $77.81 70.1 % $117.97 $82.70
September 53.9 % $108.45 $58.45 46.8 % $99.63 $46.63 51.9 % $102.64 $53.27
October 56.8 % $100.07 $57.24 49.0 % $108.59 $53.21 57.6 % $112.55 $64.83
November 66.7 % $120.86 $80.61 58.1 % $118.78 $69.01 63.8 % $125.06 $79.79
December 62.1 % $183.81 $114.15 55.1 % $180.73 $99.58 60.7 % $183.61 $111.45
Annual
Averages
67.7 % $140.69 $95.25 63.8 % $149.79 $95.57 63.5 % $144.50 $91.76
Source: Smith Travel Search

As in many markets in the continental United States, the year 2000 in the Caribbean is considered the "home-run year" in terms of occupancies. Since its peak at 67.7% in 2000, the overall occupancy in the Caribbean declined to 63.5% in 2002. The September 11, 2001 terrorist attacks have had a significant impact on tourism in the Caribbean, as seen in the fourth quarter results of 2001. According to discussions with local hotel operators, a number of travelers canceled their travel plans following the terrorist attacks, which had a negative impact on the coming 2002 winter season. A closer look at the STR data, however, indicates that occupancies in the region recorded notable declines prior to September 11; in fact, occupancies were down each month with the exception of January, 2001. As such, it is believed that these declines can be primarily attributed to the softening U.S. economy.

Despite the declining occupancies, local hotel operators seem to have maintained their rate integrity. Although occupancy dropped in 2001, average rate recorded a notable growth of nearly 6.5%, which was well above the underlying level of inflation. Consequently, RevPAR for the year 2001 was nearly identical to that of 2000. A certain level of rate discounting followed in the 2002 winter season; however, the discounts did not help occupancies as the primary problem was the fear of traveling rather than anything else. The Caribbean hotel and resort market seems to have bottomed out in June of 2002.

Regardless of the fairly stable climate, tourism to the Caribbean exhibits a highly seasonal pattern. The demand seasonality is further exacerbated by the volatility of the average rate throughout the year. Consequently, marketwide RevPAR fluctuates intensely throughout the year. The following graph shows marketwide monthly RevPAR fluctuations during the period 2000 to 2002.

Caribbean Hotels & Resorts: RevPAR by Month (2000 to 2002)

As shown in the preceding graph, the seasonal pattern in the Caribbean was very similar in each of the past three years. Certain fluctuations occurred in 2001, a year that started very strongly through April; the softening U.S. economy drove RevPAR down to 2000 levels between April and August, and the September 11, 2001 terrorist attacks skewed RevPAR in the fourth quarter.

The Caribbean market records the highest occupancy levels in the months of February, March, and April. At its peak in 2000, occupancies in this three-month period ranged in the high 70% range. At its low point in 2002, these occupancies reached the high 60% range. The demand compression recorded in these months also enables hoteliers to achieve high average rates; in 2002, the average rate among all hotels in the Caribbean in February and March amounted to nearly $190.00.

After the peak season, marketwide RevPAR declines sharply, by approximately 40%, and reaches a plateau between June and August. This decline is primarily driven by a significant drop in average rate, coupled with a modest decline in occupancy. The lowest occupancies and average rates are recorded in September, when the risk of hurricanes increases significantly. Additionally, September is typically the least popular month for leisure travel. The RevPAR achieved in September is roundly 60% below that achieved in February. October’s results are slightly better than those of September; however, it is not until November when marketwide occupancy and average rate starts to grow. Furthermore, many hotels and resorts in the region close during the slow season for annual renovations.

Why?

Why does the Caribbean hotel and resort market fluctuate so significantly throughout the year? Although the "hurricane season" undoubtedly contributes to the seasonal demand pattern, it is the region's dependence on leisure demand that influences the seasonality to the greatest degree.

While hotel supply is relatively fixed throughout the year, tourism demand in the region varies significantly. The volatile average rate fluctuation throughout the year can be explained by the market segmentation.

In the Caribbean, most demand is generated by three market segments. First, there is the FIT (free independent traveler) segment, which consists of parties who purchase their accommodations on an individual basis, either directly from the hotel or through a travel agent. Because these purchases are made on an individual basis, no discount is offered by the hotel. A typical resort in the Caribbean derives as much as 50% of its demand from the FIT segment. The other 50% are typically split between the Group and Wholesale segments. The Caribbean region is one of the top off-shore destinations for association meetings; incentive groups form another strong sub-segment of group business. Owing to the expense involved in holding a meeting in the Caribbean, including relatively high air fares, accommodations, and food and beverage costs, it is generally only the more affluent groups that are able to consider and select the islands as a destination. The group segment helps to smooth the occupancy seasonality, as April, May, September, and October represent the strongest months for this segment. While groups provide hotels and resorts with rooms during the slow periods, room rates for groups are often heavily discounted.

The wholesale segment consists of individuals who purchase their accommodations through a wholesale tour operator. Generally, this segment consists of individual tourists who select a predetermined vacation package from among those offered by the tour operator. The wholesale component of resort guests generally represents the most rate sensitive and volatile of all individual travelers accommodated. Although the wholesale segment is often heavily discounted, it makes it possible for hotels and resorts to fill otherwise vacant rooms during the slow season.

The dependence of the region on the group and wholesale segments helps to explain the seasonality of the Caribbean hotels and resorts. Although these segments help to level the seasonality of demand, a significant portion of room nights are sold at a discount, which results in the aforementioned fluctuations in average rate, and consequently, in RevPAR. The lack of commercial demand in the region as a whole results in the fact that in September and October, despite heavy discounting, local hotels and resorts remain half empty.

It is a rule of thumb that in highly seasonal markets, a 70% occupancy is as good as it gets. Historically, only a few Caribbean submarkets achieved occupancies above 70%. Puerto Rico is a good example of such a market; the island's higher occupancies, compared to the rest of the region come partly as a result of a solid base of commercial demand present in the market. As such, it can be concluded that it is primarily the leisure orientation of the market that results in the region's seasonality.

Upscale and Luxury Hotels and Resorts - Are They Different?

The following is a review of composite operating data of six upscale or luxury resorts located in the region. These hotels are the Four Seasons Nevis (located on St. Kitts), the Ritz-Carlton Resort, the Wyndham Sugar Bay, the Renaissance Grand Beach Resort (all located on St. Thomas, U.S. Virgin Islands), and the Caneel Bay Resort and the Westin Resort (both located on St. John, U.S. Virgin Islands). These resorts are primarily leisure-oriented, with the incentive group segment exhibiting dominance at a few of these properties, especially the Four Seasons and the Ritz-Carlton. A review of these hotels' operating performance shows a similar pattern in terms of seasonality.
 
Selected Resorts: Historical Trends (STR)
  1997 1998 1999 2000* 2001* 2002
Annual Occupancy 52.7 % 56.3 % 61.4 % 68.1 % 67.1 % 68.2 %
Annual Average Rate $254.34 $272.72 $260.69 $221.23 $266.46 $253.87
Annual RevPAR $133.94 $153.58 $160.16 $150.70 $178.91 $173.02
High Season (Dec. - Apr.)            
Occupancy 56.2 % 63.0 % 71.6 % 72.7 % 74.6 % 74.7 %
Average Rate $336.17 $359.31 $333.39 $299.82 $362.31 $338.12
RevPAR $188.80 $226.32 $238.59 $217.97 $270.38 $252.45
Shoulder Season (May - Aug., Nov.)            
Occupancy 55.5 % 55.8 % 63.0 % 75.8 % 73.4 % 71.4 %
Average Rate $194.01 $207.88 $197.50 $160.39 $190.37 $190.34
RevPAR $107.66 $116.02 $124.35 $121.61 $139.81 $135.96
Low Season (Sept. - Oct.)            
Occupancy 36.9 % 41.1 % 32.5 % 37.5 % 32.8 % 43.7 %
Average Rate $173.60 $164.97 $171.55 $152.57 $154.02 $155.49
RevPAR $64.05 $67.73 $55.80 $57.18 $50.58 $67.96
Source: Smith Travel Search
* The volatile changes in 2000 and 2001 came as a direct result of the closing and reopening of the Four Seasons Nevis. Hit hard by Hurricane Lenny in 1999, the resort was forced to close for repairs for almost a year. The closing was not recorded by STR. As the Four Seasons features one of the highest average rates, its closure and reopening had a dramatic impact on the marketwide average rate.

While occupancy at these resorts remains fairly stable with the exception of September and October, the rise and fall of average rate throughout the season is spectacular. In terms of RevPAR, the difference between the high and low seasons is roughly 73%.

The profound seasonality in the Caribbean has another important implication. A market that experiences such a degree of seasonality is extremely vulnerable to new supply, as with the increased supply, hotels and resorts often discount their rates to compete with each other. While rate discounting can be an effective tool to increase the hotel’s off-season occupancy, this technique can become very dangerous when applied in the high season. In general, the profitability of hotels and resorts in the Caribbean is fairly low, given their high level of fixed costs, and relatively low annual occupancies. Rates, therefore, and those in the high season especially, are considered the most important indicator of health within the different Caribbean submarkets.

So what?

While the STR statistics are useful in providing market dynamics, the hotel business is influenced by local supply and demand characteristics more than anything else. In other words, who really cares that the overall occupancy in the Caribbean reached only 63.5%? It was also stated that seasonality dictates a maximum occupancy of 70%. As with any rule, there are exceptions to the seasonality rule. Even in a seasonal market, some hotels manage to break the 70% occupancy range. 

In the search for a hotel or resort that has continually managed to break the 70% rule, one property in particular stood out: the 2,317-room Atlantis Resort in the Bahamas. This ocean-themed resort is situated around a seven-acre lagoon, and features 38 restaurants and bars, as well as a casino. As this resort is primarily leisure-driven, this hotel’s performance was analyzed (as published in the company’s annual reports and letters to the shareholders) to see whether the seasonality issue does apply to this property.
 

Atlantis Resort, Paradise Island, Bahamas
 
Atlantis Resort
Year Occupancy Average Rate RevPAR
1999 81.0 % $210.00 $170.00
2000 83.0 % $242.00 $201.00
2001 77.0 % $252.00 $194.00
2002 81.0 % $245.00 $198.00
Year-to-date Through Third Quarter of:      
2002 84.0 % $253.00 $213.00
2003 82.0 % $260.00 $215.00
Source: Kerzner International Resorts, Inc.

As indicated in the preceding table, with the exception of 2001 (a year that was negatively affected by the September 11th terrorist attacks), the Atlantis achieved occupancies above 80%. A review of quarterly performance, however, shows that even this property is affected by seasonality.
 
Atlantis Resort - Seasonal Analysis
 
2001
2002
2003
  Occupancy Avg. Rate RevPar Occupancy Avg. Rate RevPar Occupancy Avg. Rate RevPar
Annual 77.0 % $252.00 $194.00 81.0 % $245.00 $198.00 N/A N/A N/A
1st Quarter 90.0 % $284.00 $256.00 85.0 % $284.00 $241.00 83.0 % $289.00 $240.00
2nd Quarter 89.0 % $261.00 $232.00 86.0 % $262.00 $225.00 85.0 % $268.00 $228.00
3rd Quarter 74.0 % $224.00 $166.00 82.0 % $214.00 $175.00 79.0 % $225.00 $178.00
4th Quarter* 55.0 % $226.00 $124.00 71.0 % $215.00 $153.00 N/A N/A N/A
* Estimated
Source: Kerzner International Resorts, Inc.

As indicated in the preceding table, the first quarter has historically been the strongest for the Atlantis, closely followed by the second quarter. Despite discounted rates in the third and fourth quarter (ADR is roughly 25% below that of the first quarter) the resort’s occupancy typically declines during this period. Consequently, the difference between the resort’s first quarter RevPAR and fourth quarter RevPAR was roughly 37% in 2002 (the 2001 comparison was not considered appropriate due to the impact of the September 11th terrorist attacks on the third and fourth quarters).

It must be noted that at this property, the difference between the high and low seasons is smaller than the Caribbean market as a whole and the previously analyzed sample of hotels and resorts. However, the difference is considerable enough to confirm that even this property has to face significant seasonal patterns. 

The Atlantis, however, is a prime example of a hotel that has managed the issue of seasonality extremely well by offering a variety of services, including a casino, and an 18-hole golf course. Additionally, the property’s owner, Kernzer International, invests significant resources into marketing the hotel, and as such, the hotel has become a destination of its own. 

There are several reasons why the Atlantis performs so well. First, the proximity of the Bahamas to Florida is compelling chiefly due to the ease of access. The presence of excellent airlift and the short flying distance is recognized as one of the key advantages of the Bahamas in general, and the Atlantis in particular. Additionally, due to its array of facilities and its brand recognition, the resort is fairly unique in the Caribbean. Consequently, the resort is a very popular destination for families, and achieves extremely strong occupancies from December through August. Discussions with the hotel’s management representatives revealed that due to the decrease in demand in leisure visitation in September and October, the hotel’s occupancy suffers significantly during those months. The group business (primarily corporate incentive groups) represents approximately 30% of the hotel’s demand, and while it helps to smooth the resort’s seasonality, the segment is just not large enough to fill the 2,317 rooms in the fall.

Caribbean vs. Hawaii

In order to further analyze the seasonality in the Caribbean, monthly occupancies in Hawaii were reviewed. Hawaii consists of eight major islands and 124 minor islands, which form a chain extending more than 1,600 miles across the mid-Pacific Ocean. Like the Caribbean, Hawaii has been a very popular vacation destination primarily as a result of its year-round temperate climate, warm ocean water, and numerous interesting sights and geography. The following table presents monthly occupancies of the reporting properties in Hawaii.
 
Seasonal Analysis - Hawaii
 
2000
2001
2002
Month Occupancy ADR RevPar Occupancy ADR RevPar Occupancy ADR RevPar
January 68.2 % $145.09 $98.95 76.3 % $150.53 $114.85 64.4 % $145.48 $93.69
February 85.2 % $142.25 $121.20 86.2 % $153.23 $132.08 75.9 % $148.41 $112.64
March 81.2 % $143.51 $116.53 78.5 % $150.62 $118.24 72.1 % $150.33 $108.39
April 73.5 % $140.65 $103.38 69.4 % $151.25 $104.97 64.8 % $143.94 $93.27
May 71.9 % $135.62 $97.51 67.2 % $140.90 $94.68 65.4 % $134.29 $87.83
June 78.1 % $131.56 $102.75 71.8 % $142.57 $102.37 72.2 % $138.15 $99.74
July 80.5 % $140.98 $113.49 76.0 % $148.58 $112.92 74.8 % $144.72 $108.25
August 79.4 % $142.75 $113.34 78.1 % $153.03 $119.52 78.0 % $149.73 $116.79
September 74.1 % $129.47 $95.94 56.7 % $129.06 $73.18 64.3 % $130.40 $83.85
October 76.1 % $132.39 $100.75 56.9 % $131.58 $74.87 68.5 % $132.58 $90.82
November 74.7 % $134.53 $100.49 57.5 % $128.54 $73.91 65.5 % $130.70 $85.61
December 67.7 % $151.92 $102.85 57.2 % $149.30 $85.40 66.4 % $153.90 $102.19
Annual
Averages
76.0 % $139.42 $105.96 69.2 % $144.88 $100.26 69.3 % $141.06 $97.75
Source: The Department of Business, Economic Development & Tourism, State of Hawaii

The Hawaiian hotel market registered solid growth in the 1990s and peaked in 2000, with an overall occupancy of 76% and an average rate of $139.42. When compared to the Caribbean hotel market, Hawaii’s occupancy was roughly eight percentage points above that of the Caribbean in 2000. Average rate, however, was almost identical. By 2002, the difference in occupancy moderated to roughly six percentage points, while average rate in the Caribbean increased at a faster rate, compared to that of Hawaii. However, the overall trends in the two destinations were comparable between 2000 and 2002. A review of monthly occupancies and average rates in Hawaii reveals that although the destination experiences seasonal characteristics, these are much less volatile, compared to the Caribbean, as shown in the following graph.
 

Comparison: Hawaii vs. Caribbean
 
Occupancy
Average Rate
Year Hawaii Caribbean Hawaii Caribbean
2000 76.0 % 67.7 % $139.42 $140.69
2001 69.2 % 63.8 % $144.88 $149.79
2002 69.3 % 63.5 % $141.06 $144.50

Hawaii vs. Caribbean: RevPAR by Month (2000 to 2002)

 




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The preceding comparison clearly shows the difference in seasonality of the two destinations. While September through November are slow months in Hawaii as well, the destination is far less seasonal, compared to the Caribbean. It should be noted that the impact of the September 11 terrorist attacks was significantly more profound on occupancy and average rate in the fourth quarter of 2001 in Hawaii than in the Caribbean.

There are several differences between the two destinations that help to explain why Hawaii is less seasonal than the Caribbean.

  • Hawaii, the Aloha State, was admitted to the union as the nation's 50th state in 1959. The fact that Hawaii is a U.S. state helps to attract more visitors from the U.S. mainland; Hawaii’s Department of Economic Development and Tourism estimates that approximately 71% of all visitors to Hawaii arrived from the U.S. mainland in 2002. In comparison, and as mentioned earlier, U.S. visitors accounted for “only” 54% of all arrivals to the Caribbean.
  • Although primarily leisure-oriented, the meeting and group segment is a significant contributor to hotel occupancies in Hawaii. While the Caribbean derives approximately 25% to 30% of its demand from the meeting and group segment, this segment typically generates approximately 40% to 45% of demand for Hawaii’s hotels. Hawaii has been more successful in attracting meeting and group business partly for the aforementioned reason of being located in the U.S. The impact of the U.S. location for groups is twofold. First, similar to the Caribbean, Hawaii is considered a “paradise destination,” but without the need of a passport, therefore, traveling to Hawaii is generally considered less cumbersome, especially for groups. Secondly, there is the tax issue, as explained below.
The IRS' Point of View...

According to Section 274(h) of the Internal Revenue Code, a company generally cannot deduct expenses incurred in connection with a convention, seminar, or similar meeting held outside the "North American area". As such, this disallowance severely impacts the Caribbean islands outside of this area. The following table indicates which Caribbean islands are located in the "North American area" as defined by the IRS, and which ones are not. For the purposes of this analysis, each area's weight, in terms of a percentage of total visitors, has been included.

List of Geographical Areas within the Caribbean included in the "North American area"
 

Caribbean Islands
Included in the
North American Area
Percentage of
Total Arrivals**
Not Included in the
North American Area
Percentage of
Total Arrivals**
Puerto Rico 18.0 % Cuba 8.9 %
Dominican Republic 14.4 % Bahamas 7.8 %
Cancun 10.9 % Guadaloupe 3.9 %
Jamaica 6.4 % Aruba 3.5 %
U.S. Virgin Islands 3.0 % Martinique 2.3 %
Barbados 2.5 % St. Maarten 2.0 %
Trinidad & Tobago 1.9 % Cayman Islands 1.7 %
Bermuda 1.4 % British Virgin Islands 1.5 %
Saint Lucia 1.2 % Belize 1.0 %
Conzumel 1.2 % Curacao 1.0 %
Antigua & Barbuda* 1.1 % Turks & Caicos 0.8 %
Grenada 0.6 % Haiti 0.7 %
Guyana 0.5 % St. Kitts/Nevis 0.4 %
Dominica 0.3 % St. Vincent & the Grenadines 0.4 %
    Suriname 0.3 %
    Bonaire 0.3 %
    Anguilla 0.2 %
    Saba & St. Eustatius 0.1 %
    Montserrat 0.0 %
Total 63.3 % Total 36.7 %
* Included as of February 2003
** Source: The Caribbean Tourism Organization
** Source: Internal Revenue Service, Department of Treasury

As indicated in the preceding table, the IRS revenue ruling notably limits areas where a deduction for expenses incurred in connection with a convention or a meeting cannot be made. As islands such as the Bahamas, Guadeloupe, Aruba, and Martinique are not included in the "North American area", their competitiveness for U.S. convention and group demand is limited. 

Conclusion

Despite the fairly stable climate, the Caribbean hotel and resort market shows a significant level of seasonality throughout the year. The seasonality is represented by strong occupancies and average rates throughout the winter season, which are offset by extremely low occupancies and highly discounted rates in the months of September and October. Overall, after a decline from its peak of 67.7% in 2000, the Caribbean hotel market recorded an occupancy of 63.5% in 2002, according to Smith Travel Research.

The profound seasonality pattern of the Caribbean comes primarily as a result of the region's dependence on leisure travel. When compared to other destinations such as Florida or Hawaii, the Caribbean has been less successful in attracting group demand, which typically helps to smooth the seasonality of demand. As discussed, this can be attributed to the "need of a passport”, as well as the fact that meeting and group trips to some of the Caribbean islands are not tax deductible.

The underlying seasonality pattern in the region dictates a maximum occupancy of 70%. It does not mean that properties cannot achieve a higher level of occupancy. In order to do so, however, the hotel or resort needs to feature relatively easy access and must address the seasonality issue by marketing the property accordingly, and offering an array of services and activities that attract customers even even during the slow periods.

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Petr Kulic is an Senior Associate with HVS Consulting and Valuation Services, a service that specializes in the valuation of accommodation facilities, feasibility studies, and other consulting assignments. Petr graduated with honors from Ecole Hôtelière de Lausanne (Lausanne Hotel Business School), Switzerland with a Bachelor of Science in International Hospitality Management, and has been with the firm since September 2002.

 
Contact:

Petr Kulic
Senior Associate
HVS International
372 Willis Avenue
Mineola, New York 11501
PKulic@hvsinternational.com
www.hvsinternational.com

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Also See: Hotel Development Cost Survey 2003 / Elaine Sahlins, HVS / December 2003
An Investment Driven Breakeven Analysis for Hotels; The Investment Driven (ID) RevPAR and GOPPAR / Elie Younes and Russell Kett HVS / October 2003


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