Luxury Caribbean Development Requires High-Level Plans
2016 CHICOS Speakers Encourage Governments To Take Proactive Approach
When developing luxury hotels in the Caribbean, governments, and developers need to work together to create a successful market for the property to thrive. Panelists at the 2016 Caribbean Hotel Investment Conference & Operations Summit discussed what factors developers consider when siting the location for their hotel.
Whether it be tax incentives, assistance with training programs, or ensuring safety, governments must show they are fully engaged in the long-term vision. However, panelists agreed that the Caribbean is full of opportunities because of excellent locations and a proactive approach by most of the governments.
Cuba is on the radars of every developer and brand, in large part because the luxury segment is virtually nonexistent. However, the opportunities in the upscale segments may not be as great for American companies to enter. Doug Kulig of OBMI architectural design firm, states ownership issues will take a while. “Being partners with the government … you’ll find U.S. investors shy away from that.” Andrew Miele of Four Seasons Hotels and Resorts said the industry is eager to see how the luxury hotel under development in Old Havana performs.
Developers and brands are also looking for growth in airlift for building hotels in up-and coming locations. “We’ve seen a lot of places reinventing themselves,” Kulig said. “A lot of those are places have an inherent lift.” Miele added: “There are those handful of islands you need to be on, but generally in the Caribbean, you have to be opportunistic. You must have partners who have the vision to create the destination.”
Major challenges factoring into the success of Caribbean hotels is efficient operations and construction. Basic needs such as where to draw employees take on a bigger meaning when working on an island. Kulig pulls from experience stating, “On most of these islands, it’s difficult to get staff to build that kind of luxury product. We need to get the staff that has experience—if you don’t have it, it’s going to be really, really hard (to build).”
Panelist agreed that developing in the Caribbean region thrives on satisfying consumer’s insatiable thirst for unique cultural experiences surrounding the property. Designers and architects must be creative to give guests a sense of place for their memories. Kulig says a big advantage for developers to use outside spaces to cut costs. He added: “Rooms can be smaller (if they have) bigger balconies that become an outdoor room.”