Insights from the Caribbean Hotel & Resort Investment Summit (CHRIS)

30.04.2024 Author: Katherine Wyles

The Caribbean Hotel & Resort Investment Summit (CHRIS), held last week in Florida, brought together industry leaders from around the world, including our very own Andrea Shaw and Dan Akhtar, to discuss the evolving landscape of the Caribbean hospitality sector.  

Drawing from their experience of attending, we’re pleased to share our insights and takeaways into the current trends, investment dynamics, and strategic shifts affecting the region’s hotel industry.  

Evolution of All-Inclusive Resorts
One of the standout themes of CHRIS was the transformation of the all-inclusive resort model. Historically viewed through a perception of attracting a mass market and delivering a low-quality experience, all-inclusive resorts in the Caribbean are reinventing themselves.  

Dan and Andrea were delighted to reconnect with Gebhard Rainer, CEO of Sandals, during the conference. HPG has partnered with Gebhard for many years, and placed Gebhard in his current role at Sandals. We were delighted to hear his thoughts on the luxury all-inclusive sector that Sandals have dominated for so long.  

Gebhard emphasised that continuing to create emotional, and more personalised experiences, becoming more essential to today’s customers. He also noted that luxury properties will need to continue to innovate and evolve in order to inspire and capture the attention of luxury consumers. 

Dan Akhtar notes there is a significant shift in how these properties are perceived and operated: “All-inclusive used to have a bit of a bad reputation… it was encouraging to hear a lot of talk about elevating that reputation, with big-name global brands, using an authentic experiential-led approach, currently building a pipeline to becoming more active in the all-inclusive space.“  

This shift has partly been driven by the changing demographics of travellers, particularly younger generations who prioritise wellness and quality experiences over traditional vacation excesses. 

The new all-inclusive resorts are focusing on wellness, adventure, and quality services. Andrea Shaw elaborates, “This more wellness-conscious, health-conscious client coming through doesn’t want to gorge all day; actually, they want to look at different adventures and experience-led breaks.” Luxury within these settings is being redefined—luxury can mean sustainable cocktails on the beach or sports like pickleball (there was a lot of talk about the pickleball revolution), complete with high-end amenities like fresh towels, water, and fruit drinks, even at the game courts. 

The Rise of Branded Residences
Another significant trend discussed at the summit was the emergence of branded residences. These developments, where hotel brands offer residential properties, combine the comfort of private homes with the luxury services of hotels. Dan notes the prevalence of this trend, highlighting its benefits for funding hotel projects while providing the security and consistency of a quality well-known brand for its residents. This model not only enhances the allure of the properties but also provides a stable financial model through the sale of residences.  

Market Dynamics and Investment Opportunities
The discussions at CHRIS also shed light on the primary markets and investment opportunities in the Caribbean. Andrea notes statistics indicating robust engagement from U.S. travellers, with about 16 million stayovers recorded last year. The summit also addressed the significant potential of the Spanish-speaking market, which remains largely untapped in the Eastern Caribbean due to language preferences. Andrea shared insights into market preferences: “The Spanish-speaking market is huge, but understandably, they have a strong preference to go to where Spanish-speaking people are.” 

This comfort of language and familiarity plays a crucial role in attracting tourists, making regions where Spanish or English are spoken more attractive to respective demographics. This understanding is vital for developers looking to maximise the appeal of new projects. 

Sustainability – Untapped Opportunity?
The topic of sustainability at this conference revealed a stark contrast to its European counterparts in recent years. The discussions around environmentally responsible tourism were notably subdued, with little emphasis on the ESG (Environmental, Social, and Governance) principles that have become pervasive at European conferences.  

As global travellers become increasingly environmentally conscious, the demand for eco-friendly accommodations is likely to rise, providing a competitive edge to those who proactively embrace sustainability. This seemingly lack of focus on sustainability in the Caribbean at present indicates a significant opportunity for the future.  

As a major brand in the region, Club Med has a well-established ESG-focused approach, so there is a clear pathway for other brands and resorts to follow suit.  It will be interesting to see how this unfolds over the next decade, as more properties may seek to differentiate themselves by integrating sustainable practices into their operations which will also likely have a significant impact on the investment landscape. 

Financial Strategies and Consumer Behaviour
Financial strategies and consumer behaviour were also key discussion points, particularly in light of the changing economic landscape post-pandemic.  

Andrea relays the various perspectives on payment options that emerged during one panel, including the growing availability of instalment payments: “Some companies are offering these options because they can better forecast cash flow, yet others prefer to be paid upfront.” Dan adds “The regional hoteliers acknowledge they are competing on the global stage and the need to deliver value to customers, or otherwise risk losing business to other regions”. 

Ultimately, this reflects a broader trend towards accommodating consumer preferences for more flexible payment methods, aligning with global shifts towards financial inclusivity as well as personalising experiences to individual needs. 

These personalised experiences and individual needs have been well catered for at the luxury Sandals Resorts International, the homegrown trailblazer in this region for luxury all-inclusive offerings that now boasts 20 properties across 10 islands in the Caribbean.  

Challenges in Recruitment and Retention
Like in much of the global hospitality industry, recruitment and retention are also a critical area for the Caribbean hospitality industry. The summit included discussions on training and developing employees from within, indicating a high-level focus on enhancing employee engagement and loyalty. However, Andrea highlighted the need for more substantial efforts in this area: “Despite the massive challenges and direct impact this can have on the customer experiences, it wasn’t a huge talking point and it was kept very high level.” 

Local Collaboration and Infrastructure Challenges
A significant portion of the summit was dedicated to addressing operational challenges, such as airlift accessibility and local procurement. Dan reports that there was the importance of collaboration among local businesses to improve efficiency and sustainability: “Managing utilities and food, working with local growers, and trying to get the companies to work together to create a more collaborative community will help secure a more stable and resilient local economy 

These discussions underscore the necessity of integrated approaches to tourism development, where infrastructure and hotel operations are cohesively managed. This in turn may also help impact some of the challenges in terms of recruitment and retention. 

Political Stability as an Investment Attractor
Finally, the political neutrality of the Caribbean was emphasised as a key factor in its appeal as an investment destination. While the region is always at risk during hurricane season, in a world where geopolitical is affecting travel decisions, the Caribbean’s political stability makes it a safe choice for investors. Andrea articulates this advantage: “Whatever’s happening in the world politically, people will still travel to the Caribbean because they’re not likely to be hindered by what’s happening in world politics.” 

The CHRIS summit offered rich insights into the Caribbean hotel investment landscape, highlighted by the evolving all-inclusive model, the rise of branded residences, and the increasing opportunities for political sustainability.  

As the Caribbean hospitality sector continues to adapt to global trends and regional specifics, its potential for growth and innovation remains significant, making it an attractive arena for both seasoned and new investors.  

We hope that Andrea and Dan’s observations from the summit provide valuable perspectives for stakeholders considering investment in the region. If you would like to discuss any of the points raised, or indeed any element of your people strategy, please get in touch. 

Dan Akhtar, Managing Director – HPG Advisory Services 
+44 208 600 1166 / +44 7808 157796 

Andrea Shaw, Director – FM Recruitment 
+44 20 8 600 1160 / +44 7714 236469