Publication Date: 3 October 2011 | Coverage Period: 3 September – 2 October 2011
Morning Briefing
- Puerto Rico enters post-Hurricane Irene recovery phase one month after August 21 landfall, with tourism sector facilities substantially restored to operational status, property damage claims processing at advanced stages, and property rehabilitation and reconstruction activities accelerating throughout September-October 2011 period supporting economic recovery momentum.
- Bahamas post-Irene recovery initiatives progress steadily through October, with hurricane-affected Nassau and Out Islands tourism properties undergoing repair and restoration, insurance claims processing enabling reconstruction capital deployment, and Bahamas positioning for strong 2011-12 winter tourism season recovery beginning November 2011.
- 2011-12 Caribbean tourism season opening strongly with North American travelers booking accommodations through December 2011 and January-March 2012 peak periods, hotel advance booking windows showing 20-30 percent year-over-year increases for key destinations, signaling robust regional tourism performance following summer 2011 hurricane season uncertainties.
- Jamaica economy performing strongly as prime minister Bruce Golding leads tourism and infrastructure initiatives, with forward hotel bookings and property investment inquiry accelerating as North American leisure travelers and international business executives respond to Jamaica’s tourism marketing campaigns and infrastructure modernization progress.
- Trinidad and Tobago energy sector sustaining strong financial performance, with crude oil prices elevated near $85-90 per barrel through October 2011 and LNG export revenues supporting government budgets and enabling continued infrastructure investment and commercial real estate development across Port-of-Spain and regional markets.
- Dominican Republic maintains steady momentum in tourism and commercial property development, with Punta Cana and Santiago resort and commercial markets reporting accelerated leasing, sales transactions, and construction commencement for projects financed through private developer and government investment channels throughout October 2011.
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Post-Hurricane Irene Recovery and Regional Resilience
One month following Hurricane Irene’s August 21 landfall on Puerto Rico and August 22-24 passage near the Bahamas, the affected Caribbean property markets have demonstrated impressive recovery momentum and resilience. Puerto Rico’s tourism sector, historically representing 40-50 percent of the island’s foreign exchange revenues, rapidly restored hotel operations throughout September 2011, with major resort and casino facilities in San Juan, Fajardo, and outlying areas resuming full operational capacity within 3-4 weeks of hurricane landfall. This rapid recovery reflected both the relatively modest intensity of Hurricane Irene as it crossed Puerto Rico (Category 1 classification) and the robust construction standards increasingly prevalent in Puerto Rico’s tourism infrastructure, enabling properties to weather the storm with manageable damage limited largely to exterior components, landscaping, and temporary utility disruptions rather than structural compromise.
Puerto Rico’s insurance claims process has reached mature stage, with major carriers completing initial property assessments and issuing preliminary settlements to hotel operators and commercial property owners, enabling capital mobilization for reconstruction and rehabilitation projects. Property owners are leveraging insurance proceeds to upgrade damaged facilities, implement enhanced hurricane protection measures including reinforced roofing systems, storm shutter installations, and improved drainage infrastructure, and to undertake strategic property improvements that increase competitive positioning for 2011-12 winter tourism season premium pricing environment. Real estate investors have recognized post-Irene pricing opportunities, acquiring damaged but structurally sound properties at discounted valuations with intention to rehabilitate and either retain as rental properties or resell to operators seeking Puerto Rico tourism market participation.
Bahamas post-Irene recovery follows similar trajectory, with Nassau and Freeport tourism properties completing repairs and restoration activities throughout September-October 2011. The Bahamas, as archipelago nation with more dispersed development patterns compared to Puerto Rico’s concentrated tourism zones, sustained geographically distributed damage rather than concentrated impact corridor, enabling property owners to prioritize critical tourism infrastructure restoration while addressing residential and commercial property damage on extended timeframe. Bahamas government disaster recovery programs have mobilized technical assistance and financial support for small business and property owners unable to fund recovery from personal resources, leveraging development bank credits and donor country assistance programs to accelerate property sector reconstruction.
Caribbean Tourism Season 2011-12 Opening Strong
The 2011-12 Caribbean tourism season, commencing October 2011 and extending through April 2012, is opening with particularly robust booking momentum reflecting accumulated pent-up demand from North American travelers and European visitors seeking Caribbean leisure destinations following summer 2011 Eurozone debt crisis uncertainties and Atlantic hurricane season concerns. Hotel occupancy booking windows for December 2011 peak holiday period are showing 20-30 percent year-over-year increases across major destinations, indicating strong international demand for Caribbean accommodations and confirming that Hurricane Irene, while locally destructive in Puerto Rico and Bahamas, did not materially impair broader regional tourism demand from major source markets.
Commercial airline capacity across Caribbean routes remains strong through 2011-12 season, with major carriers maintaining robust flight schedules to Jamaica, Dominican Republic, Puerto Rico, and Bahamas, while managing incremental capacity deployment to other regional destinations based on demand patterns and route profitability. Cruise line operators are similarly maintaining peak-season schedules, with increased focus on homeport operations in Caribbean ports seeking incremental revenue from pre-positioning operations and turnaround passenger services. The convergence of strong leisure travel demand, robust airline and cruise capacity, and accelerated property development and hospitality infrastructure expansion throughout major Caribbean destinations creates favorable conditions for sustained tourism sector performance throughout 2011-12 season.
Caribbean Leaders This Month
Prime Minister Bruce Golding (Jamaica) — Leading Jamaica’s tourism and investment initiatives through October 2011, directing Jamaica Tourist Board marketing campaigns targeting North American leisure travelers and business investors, overseeing infrastructure modernization including cruise terminal expansions at Montego Bay and Kingston, and coordinating private sector hospitality development partnerships supporting pipeline expansion for 2012-2013 completion. Golding’s administration emphasizes Jamaica’s competitive positioning relative to hurricane-affected Puerto Rico and Bahamas, promoting Jamaica as safer, more accessible Caribbean destination for North American travelers concerned about tropical storm risk.
Prime Minister Kamla Persad-Bissessar (Trinidad and Tobago) — Consolidating energy sector development strategies through October 2011, maintaining LNG export operations at full capacity, overseeing government budget execution utilizing robust energy revenues, and directing commercial real estate development throughout Port-of-Spain and regional markets. Persad-Bissessar’s government continues pro-investment policy framework supporting international pension fund deployment and diaspora property acquisition in T&T residential and commercial markets.
President Leonel Fernández (Dominican Republic) — Completing final year of presidential term through end of 2012, maintaining strong economic management of Dominican economy with 3-4 percent GDP growth trajectory, robust tourism revenues, and accelerated property development activity. Fernández’s administration advances special economic zone framework and infrastructure modernization supporting sustained foreign direct investment and tourism market expansion.
Prime Minister Hubert Ingraham (Bahamas) — Directing post-Irene recovery and reconstruction initiatives throughout October 2011, coordinating property rehabilitation support programs, overseeing government budget allocation for disaster recovery assistance, and positioning Bahamas for strong tourism season commencement in November 2011. Ingraham’s administration emphasizes Bahamas’ rapid recovery capabilities and resilience to international investors and travelers.
Governor Luis Fortuño (Puerto Rico) — Managing Puerto Rico’s post-Irene recovery through October 2011, celebrating successful tourism sector reopening and rapid economic recovery from hurricane disruption, positioning Puerto Rico to capture significant share of 2011-12 Caribbean tourism demand, and overseeing property rehabilitation and reconstruction projects supported by insurance proceeds and federal disaster assistance resources.
Prime Minister David Thompson (Barbados) — Leading Barbados’ positioning as premier Caribbean luxury destination escaping hurricane-season impacts entirely, promoting Barbados’ safety and storm-protection advantages in tourism and property marketing campaigns targeting high-net-worth travelers and investors concerned about tropical storm risk throughout northern and central Caribbean islands.
Looking Ahead
November 2011 will mark the full transition into Caribbean tourism high season, with international airline bookings solidifying for Thanksgiving holiday week (November 24-27, 2011) and Christmas-New Year holiday period (December 24, 2011 – January 2, 2012). Hotel properties throughout major Caribbean destinations will operate at or near full occupancy capacity throughout peak tourism months of December 2011 and January-February 2012, driving premium pricing power and maximizing annual operating revenues for hospitality operators. Puerto Rico and Bahamas will benefit disproportionately from pent-up demand among travelers previously uncertain about hurricane season risk, capturing market share diverted from other destinations during September-October 2011 uncertainty period.
Commercial real estate development activities will continue accelerating through November-December 2011, as construction financing secured throughout 2011 enables project commencement and as developers target 2012-2013 project completion timeframes. Financing environment remains favorable for Caribbean real estate developers, with commercial banks maintaining accommodative lending standards and international institutional investors continuing deployment of capital into Caribbean hospitality, residential, and commercial property platforms.
Caribbean property insurance markets will continue adjusting rate structures and coverage terms based on 2011 hurricane season experience through November 30 seasonal conclusion, with final assessments incorporating any additional tropical systems developing in late October-November 2011 period. Property owners should anticipate renewal rate increases averaging 15-25 percent for coastal properties and should implement hurricane protection measures to mitigate future damage risk and potentially reduce insurance costs through demonstration of enhanced property resilience infrastructure.
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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