Caribbean Property & Investment Review — October 2011: Post-Irene Recovery and Tourism Season

Publication Meta: Caribbean Property & Investment Review | October 2011 | Coverage: 3 September – 2 October 2011

Morning Briefing

• Post-Irene assessment one month on: Puerto Rico and the Bahamas recovering strongly; insurance claims processing begins
• 2011-12 Caribbean tourism season opens with record forward bookings across the region
• Jamaica: PM Bruce Golding’s administration remains focused on fiscal reform and crime reduction
• Trinidad and Tobago: Energy revenues surge on higher global crude prices; government budget surplus projected
• Dominican Republic: Forward bookings for Q4 2011 exceed 2010 levels by 18 percent
• Barbados: Tourism season opens with improved hotel occupancy projections for winter months

Post-Irene Assessment and Regional Recovery

Hurricane Irene swept through the Caribbean in late August 2011, leaving significant damage across the eastern islands and Puerto Rico. One month into recovery, the region is assessing reconstruction costs and insurance claims. The Bahamas, hardest hit, reports preliminary damage estimates of USD 250 million across Nassau and the northern islands. Puerto Rico’s tourism infrastructure, concentrated in San Juan, sustained minor damage; most resorts have reopened or are nearing full operation. Insurance carriers have mobilized claims teams across the region, processing first notices of loss and deploying adjusters to assess property and business interruption claims. Preliminary indications suggest insurance will cover 60–70 percent of insured losses, with uninsured losses concentrated in small businesses and lower-income housing. The region’s property market, however, shows resilience: investment enquiries remain steady, with international buyers viewing post-disaster reconstruction as opportunity.

Tourism Season 2011–12: Record Forward Bookings

The opening of the 2011–12 tourism season in October marks the strongest booking period in five years for the Caribbean. Post-financial crisis recovery and weak US dollar relative to sterling have made Caribbean holidays more attractive to European travellers. The Dominican Republic leads the region with October–December forward bookings up 24 percent over the same period in 2010. Jamaica reports solid bookings for winter months, particularly in Montego Bay and Negril, driven by North American leisure travellers and Canadian winter escapes. Puerto Rico, despite post-Irene repairs, benefits from its status as a US territory and attracts domestic travellers seeking hurricane-affected but recoverable destinations. The Bahamas, despite post-Irene damage to Nassau-area properties, has seen forward bookings remain stable as travellers redirect to the southern islands and the Out Islands. Barbados and the Windwards report steady bookings, with the Barbados season traditionally relying on repeat winter visitors from North America and the UK. Hotel occupancy rates are projected to reach 75–80 percent during the December holiday period, the highest in three years.

Jamaica: Fiscal Reform and Political Continuity

Jamaica’s political landscape remains stable under Prime Minister Bruce Golding, who continues to drive the government’s fiscal consolidation and crime reduction agenda. Golding’s administration, in office since September 2007, maintains focus on Jamaica’s IMF agreement and infrastructure development. Property investment in Jamaica reflects cautious optimism: Kingston’s commercial real estate market shows modest leasing activity, while resort properties in Montego Bay and Negril attract North American and European investors. Jamaica’s bauxite and alumina sectors, which support foreign exchange earnings, remain under pressure from global commodity prices, but tourism and remittance flows provide economic stability. The government’s crime-reduction initiatives, particularly in Kingston and Montego Bay, have improved investor confidence in urban and resort property markets.

Energy and Commodity Dynamics: T&T and Regional Revenues

Trinidad and Tobago’s energy sector delivers strong fiscal returns in 2011, as global crude prices hover near USD 90–100 per barrel. The government, led by PM Patrick Manning, continues to benefit from LNG exports and onshore oil production. Energy revenues fund infrastructure projects and public spending, providing T&T with economic buoyancy relative to its Caribbean peers. The Central Bank projects 2011 budget surplus, a rare position for the region in the post-2008 recovery period. Neighbouring Caribbean nations, lacking T&T’s energy endowment, focus on tourism and offshore finance. The Dominican Republic’s economy, driven by tourism and remittances, shows recovery momentum. Barbados, a smaller tourism-dependent economy, faces structural fiscal challenges but maintains currency stability through tourism revenues and offshore finance.

Caribbean Leaders This Month

PM Bruce Golding (Jamaica): Continues his tenure focused on crime reduction and fiscal reform, maintaining international partnerships for security assistance and IMF compliance on Jamaica’s stabilization programme.

PM Patrick Manning (Trinidad and Tobago): Leads T&T’s energy-fuelled economy, with government projecting 2011 budget surplus on rising crude revenues and maintaining diversified natural gas and LNG exports.

PM Leonel Fernández (Dominican Republic): Oversees Caribbean’s fastest-growing tourism market, with forward bookings up 24 percent and infrastructure investment in resort and commercial real estate accelerating.

PM David Thompson (Barbados): Manages fiscal consolidation in smaller island economy, balancing tourism development and offshore finance with debt reduction efforts; passes leadership later in year.

PM Perry Christie (Bahamas): Oversees post-Irene recovery in Nassau and northern islands, coordinating international reconstruction aid and insurance claims processing while maintaining tourism promotion.

Central Bank Officials (Regional): Monitor currency stability and inflation pressures across the Caribbean as commodity prices rise and tourism revenues strengthen; coordination among regional banking authorities increases.

International Investors: Continue to view Caribbean property as recovery play post-2008, with particular focus on Dominican Republic resort development and Jamaica tourism infrastructure projects.

Looking Ahead

The remainder of October 2011 will be critical for the Caribbean tourism season. Forward bookings suggest winter months will see strong hotel occupancy, particularly in the Dominican Republic and Puerto Rico. Post-Irene reconstruction will continue through Q4, with insurance settlements accelerating and property development restarting in the Bahamas. International investors are evaluating Caribbean opportunities in light of post-disaster recovery, with the strongest demand concentrated in tourism-dependent economies with improved security and infrastructure.

Energy prices will influence regional fiscal positions through year-end. T&T’s energy windfall supports government spending, while tourism-dependent economies face structural challenges absent commodity export buffers. Jamaica’s IMF programme and fiscal reform remain critical for investment confidence. The region enters the final quarter of 2011 with cautious optimism on tourism, improved post-Irene recovery momentum, and supportive commodity prices for energy-producing nations.

Property investors should monitor Q4 2011 data on tourism bookings, forward room rates, and construction permitting in the Dominican Republic and Puerto Rico, as these will signal the strength of 2012 investment flows into Caribbean real estate.

This review represents the Caribbean property and investment landscape as of early October 2011, compiled from public market data, regional media sources, and industry reporting. Readers should consult professional advisors for property and investment decisions.

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