According to STR Global, the Caribbean and Mexico's total active hotel pipeline has more than doubled in the last six months as investor interest returns.
The research firm's active pipeline for June includes 131 hotels with a total of 21,957 rooms, up from 50 hotels with 9,495 rooms in the region's active pipeline in December.
According to STR, only five hotels with 354 rooms opened in the area in 2012. property for sale in qatar
"Banks are gradually regaining trust in lending on hotels," Jan Freitag, STR's senior vice president of strategic growth, told WPC News. "There are a lot of people who are trying to start projects, but they need funding."
Projects in the construction, final design, and planning phases make up the region's total active pipeline. According to STR, more than 10,000 hotel rooms are currently under construction, including 4,025 rooms in Mexico.
The Dominican Republic (2,475 rooms), Bahamas (2,271 rooms), Puerto Rico (709 rooms), Aruba (320 rooms), and Jamaica (320 rooms) are the five other countries with more than 200 rooms under construction (238 rooms).
"Bankers and owners are re-engaging in this field, and they [developers] believe the current existing properties aren't meeting the needs well enough, and they can make money by having a better property," Mr. Freitag told WPC. "Every now and then, a local developer would say, 'Oh, I can make this work.'"
Luxury rooms account for 4,000 of the total rooms under construction in the Caribbean and Mexico. In the luxury industry, the region's pipeline contains over 7,000 rooms across all phases.
"We anticipate an increase in construction in 2014 and beyond because there will be more demand and funding for new properties," Mr. Freitag said.
"When you suddenly have two or three more properties, it can definitely change the local rivalry," he said, adding that new development would often affect specific markets or submarkets.
The Caribbean is competing in a global market that is becoming more competitive. According to a recent TravelSat study on the Caribbean, Caribbean destinations must assess their attractiveness in comparison to other global destinations.
Hotels in the Caribbean are reaping the benefits of a strong revenue rebound.
The Caribbean hotel industry posted strong revenue-per-available-room rises year-to-date November 2012, according to a new study from STR.
The Caribbean saw an 11.1 percent rise in RevPAR to US$113.24 year over year, a 3.8 percent increase in average daily rate to US$170.50, and a 7.1 percent increase in occupancy to 66.4 percent. Room sales increased 9.1% to $8.4 billion in the first half of 2012.
In comparison to Mexico (+3.1%), Hawaii (+5.3%), Florida (+3.1%), and Central America (+3.1%), hotels in the Caribbean had the greatest rise in occupancy (-4.7 percent).
Demand in the area increased by 5.1 percent in November, while supply decreased by 1.9 percent.
According to STR's December 2012 pipeline survey, the region's total active pipeline includes 50 hotels with 9,495 spaces. In the year 2012, five hotels with a total of 354 rooms opened in the region.