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Most hoteliers see strong growth ahead

Optimistic: Resorts like Cambridge Beaches stand to benefit from a growth in visitor numbers over the next two years

Three-quarters of Bermuda’s hotel chiefs believe that 2015 and 2016 will see a period of “meaningful growth” in the industry — buoyed by the award of the 2017 America’s Cup to Bermuda.

And around two-thirds of the Island’s hoteliers told KPMG they had expansion plans over the next 18 months — although respondents said that finding financial backing was “very difficult” compared to the Caribbean.

The results came in the 2014 hotel benchmarking survey of hotels in Bermuda and the Caribbean, carried out by financial services firm KPMG.

The survey covers hotel results in 2013 and finds that nearly a third of hotel chiefs believed 2014 occupancy figures would turn out to be better than the previous year.

But optimism in Bermuda lags behind its Caribbean rivals, where nearly half of respondents said that 2014 would be a better year.

The survey said: “When comparing Bermuda’s results to the rest of the Caribbean region, Bermuda has a significantly lower average occupancy, but Bermuda’s average rack rates were higher than the regional average.

“Revenue per available room is lower than the rest of the Caribbean as a result of the lower occupancy Bermuda experiences.”

But the survey added: “Overall, the result give Bermuda hoteliers sufficient encouragement to believe that brighter days may be ahead, especially with recent positive news for the Island that Bermuda will host the 2017 America’s Cup.”

The report said: “While there has been healthy growth in occupancy, average daily rate and revenue per available room in the Caribbean in 2013, there was only slight growth in Bermuda occupancy, which increased from 57 per cent to 57.8 per cent.

“Bermuda did manage to increase rates more significantly, however, with average daily rate rising from $298 to $314, an increase of 5.4 per cent.

“The Caribbean increase in average daily rate, by contrast, was just two per cent.”

The survey found that major key performance indicators and good control of expenses had increased in Bermuda in 2013 — leading to modest increase in departmental profits, despite a small decline in the number of tourist stopovers in Bermuda between 2008 and 2013.

And the KPMG report said that hotel bosses were still concerned about the cost of operations, the high cost of travel to the Island and the fragile global economic recovery.

But hoteliers backed the new Bermuda Tourism Authority’s focus on the US as a key market as it provides just over half of Bermuda’s vacation guests.

Nearly 75 per cent of Caribbean competitors said they had plans to expand their businesses over the next year and a half, with more than half saying energy efficiency was a top priority.

The survey said: “Although Caribbean hoteliers are more confident about the future than at any time since 2010, when we first started the initiative, Bermuda confidence is not as high.

“Our 2013 Caribbean survey struck a note of cautious optimism and we are gratified that this has proven to be the case.

“The long anticipated improvement in the Caribbean region’s hotel sector appears to be moving closer and closer.

“While Bermuda’s hotel sector appears to have made slightly less progress along the road to recovery, we await with optimism the impact of the America’s Cup win on the confidence and profitability of the Island’s hoteliers.”