Publication Date: 3 July 2011 | Coverage Period: 3 June – 2 July 2011
Morning Briefing
- Caribbean summer 2011 tourism season accelerating following recovery from global financial crisis lows of 2009-2010, with regional visitor arrivals showing solid year-over-year growth across major destinations including Jamaica, Dominican Republic, Barbados, and Trinidad and Tobago.
- Eurozone debt crisis intensifying as Greece enters second phase of bailout negotiations in June and early July 2011, creating uncertainty among European leisure travelers and business investors regarding discretionary travel spending and capital deployment to Caribbean properties.
- Trinidad and Tobago energy sector momentum continuing strong, with crude oil prices remaining elevated and natural gas revenues providing robust fiscal resources, positioning T&T as region’s leading investment destination for energy-related infrastructure and diversification projects.
- Jamaica tourism sector demonstrating resilience with increased North American visitor bookings, offsetting softer European demand, while property developers accelerate coastal resort projects ahead of peak winter season commencing October 2011.
- Dominican Republic peak season characteristics emerging in early July, with high-season rates already being achieved at beachfront and mountain resort properties, signaling strong international demand for DR’s diverse accommodation portfolio.
- National Hurricane Center monitoring above-normal 2011 Atlantic hurricane season (predicted 16-21 named storms), prompting Caribbean property insurers and coastal resort operators to review and strengthen storm preparedness protocols and coverage adequacy.
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Summer Tourism Recovery and European Market Dynamics
The Caribbean tourism sector enters its peak summer season in July 2011 with palpable momentum building after two years of cyclical decline stemming from the 2008-2009 global financial crisis. Regional tourism boards report that combined visitor arrivals across major Caribbean markets are tracking favorably compared to 2010, reflecting both the normalization of leisure travel patterns in North America and selected recovery in European source markets. However, the unfolding Eurozone sovereign debt crisis—which intensified dramatically in June 2011 with Greece’s second bailout package negotiations and broader contagion fears affecting Portugal, Ireland, and Italy—has begun to weigh on forward bookings from the traditionally critical European feeder markets.
European leisure travelers, who historically account for 15-25 percent of Caribbean visitor arrivals depending on destination, are showing pronounced hesitancy in discretionary travel decisions. Banks, travel agencies, and tourism marketing organizations throughout Northern Europe report reduced commitment in group tour bookings and delayed individual reservations, as consumer confidence indices deteriorate amid political uncertainty surrounding EU bailout mechanisms and potential sovereign defaults. This European uncertainty contrasts sharply with robust North American demand, where U.S. and Canadian visitors—representing 50-65 percent of Caribbean tourist traffic—continue booking summer getaways at near-pre-crisis levels.
For Caribbean property investors, this dichotomy presents both challenge and opportunity. Hotels and resorts targeting the North American market—whether through direct bookings, international chains, or franchise arrangements—are experiencing strong June-July occupancy rates and booking windows extending into August and September. Conversely, properties positioned primarily for European group travel and high-volume tour operators face softer inquiry patterns and are increasingly implementing promotional pricing strategies to maintain occupancy targets. Forward-looking developers are recalibrating their target demographics and marketing spend, with growing emphasis on U.S. East Coast and Midwest leisure markets, where discretionary spending remains relatively insulated from Eurozone financial turmoil.
Trinidad and Tobago Energy Sector Driving Regional Investment
Trinidad and Tobago’s energy sector continues to dominate Caribbean investment narratives in July 2011, with crude oil prices sustained at $95-100 per barrel and liquefied natural gas export markets supporting consistent revenue streams. The T&T government’s fiscal position remains exceptionally strong by regional standards, enabling continued infrastructure investment, commercial real estate development, and public-private partnership initiation. This macroeconomic strength translates directly into robust property market dynamics, with commercial developers in Port-of-Spain and Arima reporting accelerated office tower, retail complex, and mixed-use development starts.
Institutional investors, particularly international pension funds and insurance companies seeking Caribbean exposure, are increasingly deploying capital in T&T commercial real estate, viewing energy sector stability and government fiscal strength as de-risking factors compared to other regional markets. The Central Bank of Trinidad and Tobago maintains accommodative monetary policy, supporting mortgage lending to property purchasers and developers financing acquisition and construction. Local developers report strong demand from expatriate workers and returning Diaspora members purchasing residential properties, driven by employment opportunities in the energy, finance, and professional services sectors.
Caribbean Leaders This Month
Prime Minister Kamla Persad-Bissessar (Trinidad and Tobago) — Takes office on 26 May 2011 as the Caribbean region’s first female prime minister, leading the People’s Partnership coalition to electoral victory. Her government immediately begins implementing aggressive energy sector development and diversification strategies, signaling pro-investment policy continuity while emphasizing expanded social services and infrastructure modernization, particularly in transportation and education sectors critical to attracting skilled talent.
Prime Minister Bruce Golding (Jamaica) — Continuing to drive Jamaica’s tourism and investment recovery initiatives, focusing on cruise ship docking facility upgrades at Montego Bay and Kingston, private sector retail and hospitality development partnerships, and special economic zone framework expansion to attract manufacturing and business processing operations seeking Caribbean locations with established English-language, skilled workforce capabilities.
Prime Minister David Thompson (Barbados) — Leading Barbados’ positioning as the Caribbean’s premier luxury destination, emphasizing sustainable tourism development, upscale residential property marketing to high-net-worth individuals from North America and Europe, and financial services sector growth through regulatory modernization and international competitiveness enhancements in banking, insurance, and fund management sectors.
Prime Minister Portia Simpson-Miller (Jamaica) — Though currently in opposition, maintains significant influence over Caribbean political discourse and positions Jamaica’s People’s National Party for 2012 electoral competition, advocating for expanded social programs, tourism sector labor protections, and infrastructure investments in urban centers and rural communities, themes that resonate with middle-class property buyers and hospitality sector entrepreneurs.
President Leonel Fernández (Dominican Republic) — Completing his second non-consecutive term and maintaining strong Dominican economy management, with GDP growth sustained at 3-4 percent annually despite global slowdown, supporting robust tourism revenues and property development activity, particularly in Punta Cana, Santiago, and Santo Domingo real estate markets where both domestic and international investors remain active.
Governor Sir Anerood Jugnauth (Mauritius — Indian Ocean) — Though outside the traditional Caribbean focus, Mauritius increasingly attracts Caribbean investment diaspora seeking Indian Ocean alternative tourism and real estate opportunities, with Jugnauth’s government supporting property development and hospitality sector expansion, positioning the island as competitor to Caribbean destinations for Asian and African source markets.
Central Bank Governor Ewart Williams (Trinidad and Tobago) — Managing T&T monetary policy during commodity price volatility, maintaining currency stability of the T&T dollar, supporting bank credit expansion for mortgage lending, and overseeing regulatory frameworks ensuring financial system stability critical to sustained property market development and commercial real estate investment confidence.
Looking Ahead
August 2011 will bring peak summer tourism season for Caribbean destinations, with school holidays across North America driving family-oriented leisure travel bookings and resort occupancy rates expected to approach or exceed 80 percent across major beach resort destinations. The continuation of above-normal Atlantic hurricane season activity should be monitored closely, as meteorological services have predicted elevated probability of major hurricane formation during August-September 2011 period, creating potential for property insurance and coastal development impacts should significant storms materialize.
European economic data releases and European Central Bank policy announcements scheduled throughout July-August 2011 will likely influence Caribbean tourism inquiry patterns from the Continent, as continued sovereign debt contagion concerns could either further dampen European travel bookings or, conversely, lead to rate adjustments and promotional strategies that re-ignite Continental interest in Caribbean leisure properties. Caribbean tourism boards and hotel associations are actively developing aggressive marketing campaigns targeting underutilized summer inventory.
Commercial real estate markets throughout the Caribbean—particularly in Jamaica, Dominican Republic, and Trinidad and Tobago—are positioned for accelerated development activity during the second half of 2011, as financing secured in early summer permits construction commencement and as regional confidence in sustained economic recovery strengthens investor appetite for hospitality, retail, and office tower projects with completion targeted for late 2012 and 2013.
The Caribbean Property & Investment Review is published monthly on the first business day of each month, providing subscribers with comprehensive analysis of tourism trends, real estate market dynamics, energy sector developments, political leadership shifts, and investment opportunity assessment across Caribbean destinations including Jamaica, Trinidad and Tobago, Dominican Republic, Barbados, Puerto Rico, and the Bahamas.
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