Posted by: Editor on Jul 24, 2006 – 02:19 PM
newsandinfo Caribbean hotels for the most part continued to rake in high profits last year despite the high operating costs facing properties across the region from The Bahamas to islands in the east, according to a newly released study conducted by a hospitality research consulting firm.
The review was based on the financial statements submitted from 35 countries, including Antigua, Aruba, The Bahamas, Jamaica and the British Virgin Islands for 2005, it was reported.
The study by PKF Consulting found that Caribbean hotels earned an average of $111,414 per available room representing a profit of $25,541 per room.
However, while the average room earnings of these hotels was lower than that for properties in the United States – which was reported to be $125,200 – the margin of profit for the Caribbean was almost 30 percent higher than the U.S. profit margin of slightly over 20 percent.
Researchers correlated information from full service, limited service, convention, resort and suite hotels weighing the risks as well.
“There are some obstacles to operating a property in the region in terms of getting in products and services and the availability of labour, but the Caribbean is such a popular destination with more airlift and more competitive prices that despite the operational challenges, the increased demand is offsetting the high operational costs,” said Robert Maldenbaum, PKF’s director of research and information services.
The Caribbean is the most dependent region in the world on tourism, employing one in every four people.
A recent analysis of the full economic value of tourism activity revealed that the total contribution was $2.8 billion in 2003, comprising 51 percent of The Bahamas Gross Economic Product [GDP]. This generated $1.6 billion in local wages or 62 percent of all wages in the country, according to the tourism satellite report.
That report found that if a hotel spends $1 million on imports, 30 percent or more of that may remain in the local economy as taxes which is calculated by taking the sector’s tourism imports as a share of total imports and multiplying this ratio by total imports.
Five percent of tourism generated taxes comes from hotel occupancy taxes which was calculated at $22.3 million in 2003.
Hotel room revenues increased by 9.6 percent to $159.1 million during the first four months of 2006, the Central Bank of the Bahamas reported in its monthly review of economic developments for May which said that hotel room revenues in the period were bolstered by “appreciated pricing and boosted occupancy levels” in the industry.
On New Providence, hotel room revenues increased by 6.3 percent in the period to April 2006, with average daily room rates up by 3 percent and occupied room nights rising by 3.2 percent.
Elsewhere, room revenues on the Family Islands were up by 11.7 percent, due to a 13.7 percent rise in average daily room rates. The Central Bank indicated that occupied room nights were either flat or below 2005’s comparatives.
Research from the World Travel and Tourism Council shows that total visitor exports earnings in the Caribbean region are estimated at around $21 billion.
The council has also reported that the visitor market share from the United States to the Caribbean and the percentage of visitors who do not use a valid US passport will decline dramatically as a result of the new rule which would require those tourists to produce a passport upon re-entry into the U.S.
The balance sheets for hotels are also being affected by high food import and energy bills, researchers have found.
In The Bahamas, visitor arrivals and expenditure have exceeded the mid-1990 levels, an encouraging sign for the staple industry.
Source: The Bahama Journal