Caribbean Tourism Boom Peaks: Summer 2022 Is the First Normal Summer Since 2019 — July 2022

Publication Date: 3 July 2022  |  Coverage Period: 3 June – 2 July 2022

Morning Briefing

• Jamaica’s June 2022 tourism arrivals exceeded any comparable June on record, with the Jamaica Tourist Board reporting that Sangster International Airport processed more passengers in the month than in any June since the airport’s current terminal was opened — a milestone that marks the full flowering of the post-COVID revenge travel boom.
• Caribbean Airbnb and VRBO listings recorded average occupancy rates above 85% across the month of June 2022, with average daily rates across the region running 25–40% above June 2019 levels, reflecting both the surge in demand and the constrained supply of quality short-term rental inventory.
• The Dominican Republic welcomed over 700,000 international tourists in June 2022, its strongest June performance on record, driven by extensive US airline capacity and the continued appeal of Punta Cana and Cap Cana as both tourism and real estate destinations for North American buyers.
• Barbados’s luxury villa rental market reported that virtually every premium property in the Saint James corridor was occupied throughout June, with several villa operators reporting year-long occupancy commitments from Welcome Stamp holders and high-net-worth renters seeking extended Caribbean stays.
• Caribbean property prices in tourism corridors continued their upward trajectory through June, with luxury villa markets in Jamaica’s north coast, Barbados’s west coast, and the Cayman Islands all recording prices 20–40% above 2019 levels, driven by the combination of strong rental income performance and constrained new supply.
• The Bank of Jamaica raised its policy rate to 6.5% at its May 2022 Monetary Policy Committee meeting, continuing its tightening cycle in response to persistent inflation, with commercial bank mortgage rates beginning to reach levels that are creating measurable affordability pressure for first-time buyers in the JM$10–20 million market band.

Summer 2022: The Caribbean’s Long-Awaited Comeback

Summer 2022 has delivered on its extraordinary advance billing. After two years of COVID-crimped travel, aborted recovery attempts, and the false dawns represented by each successive variant disruption, the Caribbean tourism industry is experiencing a summer season of unambiguous, exhilarating, and — for the industry’s battered workforce and investors — deeply welcome normalcy. Planes are full. Hotels are full. Rental villas are full. And for the first time since the pandemic began, the Caribbean is full in the way it is supposed to be during summer — full of holidaymakers from across North America and Europe who are spending freely, staying longer, and driving economic activity that is visible in the data across every metric the industry tracks.

Jamaica’s performance has been the standout data point. The island’s June 2022 figures represent a genuine landmark — not merely a recovery toward 2019 levels but, in many respects, a surpassing of them. The combination of pent-up demand, improved airline connectivity, the removal of all COVID entry requirements for international visitors (a threshold Jamaica crossed in April 2022), and the island’s growing profile as a destination of choice for the high-spending American leisure traveller has created conditions for record tourism performance. Hotels in Montego Bay’s Hotel Strip that have been operating at reduced capacity for two years are now turning away business. Off-plan villa developments that launched sales programmes in early 2022 anticipating the summer boom have reported 100% pre-sales in several cases.

The Dominican Republic’s June data is equally compelling. More than 700,000 international visitors in a single month is a figure that would have been remarkable even in the best pre-pandemic years, and it reflects both the extraordinary depth of pent-up demand and the DR’s structural advantages as the Caribbean’s largest tourism market: its geographic scale, its extensive aviation connectivity with the US and Canada, its price range that accommodates travellers at multiple budget levels, and its established resort infrastructure that can absorb high volumes without the capacity constraints that smaller islands experience.

Barbados continues to demonstrate that a high-value, lower-volume tourism model can generate exceptional economic outcomes per visitor. The island’s luxury villa and hotel market is operating at or near full capacity, and the average expenditure per visitor continues to climb as the island’s positioning at the premium end of the Caribbean spectrum attracts a visitor who spends substantially more per day than the regional average. The Welcome Stamp digital nomad programme continues to contribute long-stay residents who generate year-round accommodation and spending, effectively smoothing out the traditional tourism seasonality that has historically been a Caribbean economic challenge.

Short-Term Rental Market: Boom Within a Boom

Within the broader Caribbean tourism boom, the short-term rental market is experiencing a phenomenon of its own. The Airbnb and VRBO platforms have become mature and significant distribution channels for Caribbean accommodation, and the data for June 2022 reflects a market that is performing at levels that investors in the sector could only have dreamed of eighteen months ago.

Average occupancy across Caribbean Airbnb listings exceeded 85% in June — a figure that, if sustained, would imply annual occupancy levels approaching those of the best-performing hotel markets globally. Average daily rates running 25–40% above June 2019 comparators mean that property owners who invested in Caribbean short-term rental properties are generating returns on equity that substantially exceed initial underwriting assumptions. For investors who purchased properties in 2020 or 2021 — when pandemic uncertainty had depressed values and vendor expectations — and are now renting those properties at 2022 peak rates, the return profile is exceptional.

The geographic pattern of outperformance is instructive. Jamaica’s north coast — Montego Bay, Ocho Rios, and Negril — is showing the strongest rate growth, reflecting the concentration of US leisure travel demand and the limited new supply pipeline. Barbados’s west coast villa market is similarly outperforming, driven by the premium nature of its visitor base. The Cayman Islands, benefiting from their first full summer of openness after the extended COVID closure, are seeing extraordinary demand from visitors who have been unable to access the destination for two years. Turks and Caicos, which maintained its appeal to North American ultra-high-net-worth visitors throughout the pandemic, is recording its highest-ever average daily rates for June.

The property market implications of sustained short-term rental outperformance are significant. Investors who are generating strong rental income are in no rush to sell, reducing the supply of resale properties in markets where buyer demand remains strong. Prospective buyers, attracted by the income potential, are competing more actively for the limited inventory that does come to market. The combination creates upward price pressure that is already evident in asking prices and achieved sale prices across the major short-term rental markets.

Property Market: Tourism Boom Translates into Real Estate Heat

The Caribbean property market in June 2022 is running hot, particularly in the tourism corridor markets where the short-term rental boom is most concentrated. The causal relationship between tourism performance and property values is direct and well-established: strong rental income performance raises the capitalised value of investment properties, attracts new buyers who are drawn by the income thesis, and reduces the motivation of existing owners to sell. The result is a market characterised by elevated prices, constrained inventory, and strong demand — conditions that define a seller’s market in virtually every jurisdiction.

In Jamaica, luxury villas in the Rose Hall, Tryall, and Round Hill areas of the Montego Bay corridor are trading at prices 30–40% above 2019 levels in several documented transactions. Off-plan villa products in the same area are being absorbed rapidly, often within weeks of launch. Several luxury developments have closed their sales programmes entirely as they have sold out, and new product — constrained by planning timelines and construction cost inflation — is not coming to market fast enough to meet buyer appetite. The result is a market where quality is scarce and buyers must move quickly and decisively to secure properties.

The Dominican Republic’s Cap Cana market has similarly moved into a new price phase. The branded residence products that were the market’s growth engine through 2020 and 2021 are now being priced at levels that would have seemed aspirational even in the US or European luxury markets — reflecting both the genuine demand for premium Caribbean resort real estate and the construction cost environment that has substantially raised the replacement cost of new development. Several international real estate investment groups that track global luxury markets have cited Cap Cana among their top-ten emerging luxury resort real estate markets globally for 2022.

The Cayman Islands property market is experiencing its moment. Having been effectively closed to visitors for two years, the islands’ return to full openness has triggered a rush of pent-up buyer activity from high-net-worth individuals who had been waiting to visit, inspect, and transact. Real estate agents across Grand Cayman’s Seven Mile Beach corridor report a surge in viewing activity and offers, with several properties achieving above-asking prices in competitive bidding situations. The Cayman financial services sector’s stability and the islands’ tax-neutral environment continue to underpin structural demand for property from international buyers seeking stable, long-term assets in a well-governed jurisdiction.

Caribbean Mortgage Markets: US Fed Rate Impact Begins to Bite

While the luxury and tourism-corridor markets are performing strongly, the Caribbean’s domestic residential markets — where first-time buyers and middle-income families are the primary demand driver — are beginning to feel the cooling effect of rising interest rates. The Bank of Jamaica’s policy rate, now at 6.5%, is materially above the levels at which most first-time buyer affordability calculations were modelled, and commercial bank mortgage rates in Jamaica have moved upward in response to the BOJ’s tightening cycle and the broader increase in the cost of funds.

For NHT-supported buyers, the Trust’s subsidised rate products continue to provide meaningful protection, and NHT mortgage application volumes remained elevated through June even as commercial bank mortgage activity showed early signs of slowing. The NHT’s ability to maintain below-market rates through the rate cycle will be a critical policy variable — it is the buffer that stands between a generation of aspiring homeowners and the risk of being priced out of the market by the combination of rising construction costs and higher financing costs.

The US Federal Reserve’s increasingly aggressive rate path — the Fed raised by 75 basis points at its June meeting, its largest single move since 1994 — is adding further upward pressure to Caribbean financing conditions even for markets that are not directly linked to the Fed Funds rate. The signal from the Fed is that inflation in the United States is proving more persistent and elevated than anticipated, and that the tightening cycle will be deeper and longer than financial markets had priced in at the start of the year. Caribbean central banks and mortgage lenders are adjusting to a world where the era of ultra-cheap money is firmly over.

Caribbean Leaders This Month

Jamaica claims the lead position emphatically this month. Record June tourism arrivals, exceptional short-term rental performance, a luxury property market running at multi-year price highs, and strong hotel sector occupancy combine to make Jamaica’s June 2022 performance a landmark moment in its tourism and real estate history.

Dominican Republic matches Jamaica in the achievement of record June visitor numbers, with 700,000+ arrivals in a single month representing an extraordinary achievement for any Caribbean destination. The DR’s real estate market continues to attract international attention at levels not seen in over a decade.

Cayman Islands is having its moment of full reopening reckoning, with two years of pent-up visitor and buyer demand converging on a market that is well-positioned to absorb it. The luxury property market is seeing genuinely exceptional activity that reflects the islands’ unique combination of financial stability, tax-neutral environment, and world-class leisure amenities.

Barbados continues to demonstrate the power of its high-value tourism model, with west coast villa markets posting record rates and occupancy and the Welcome Stamp programme generating year-round economic activity that smooths the traditional seasonal pattern.

Turks and Caicos is quietly generating some of the most impressive per-visitor economic data in the region, with ultra-luxury rental rates in the Grace Bay area setting new records and property prices continuing their upward trajectory as supply remains critically constrained.

Guyana continues its steady economic transformation, with Liza Phase 2 production ramp-up providing the government with growing revenues to deploy in housing and infrastructure, even as Georgetown’s real estate market remains under significant supply pressure from oil sector-driven demand.

St Lucia reports its best June tourism performance in years, with the Hewanorra International Airport completing a major upgrade that has expanded the island’s capacity to handle the increased visitor volumes that the Caribbean’s summer 2022 boom is generating.

Overall Performer of the Month: Jamaica. Record arrivals, record short-term rental rates, luxury property market at multi-year highs, and a tourism industry operating at a level of confidence and activity not seen since before the pandemic — Jamaica’s June 2022 performance is the defining Caribbean real estate and tourism story of this extraordinary summer.

Looking Ahead

July and August are the peak months of the Caribbean’s summer tourism season, and the trajectory established in June strongly suggests that the region is heading for its strongest summer performance since 2019, and possibly its strongest ever in absolute visitor terms for some destinations. The tourism industry’s primary concern is no longer whether demand exists — it manifestly does — but whether the infrastructure, staffing, and operational capacity exists to service that demand at the quality levels that Caribbean destinations’ brands require. Labour shortages and operational capacity constraints are the new challenges for a sector that has successfully navigated the demand uncertainty of the pandemic era.

The property market’s immediate trajectory will be shaped by the continuing interplay between exceptional demand in tourism corridor markets and the affordability squeeze affecting the domestic residential market. The luxury market has its own momentum and is unlikely to be materially affected by rate rises that primarily affect the mortgage-financed first-time buyer segment. The mid-market and affordable segments will bear the brunt of the rate environment and construction cost headwinds, and the National Housing Trust’s policy response will be critical in determining how many of Jamaica’s aspiring homeowners can still reach the market in this more challenging environment.

The broader macroeconomic picture remains complex. Caribbean inflation continues to run at multi-decade highs, construction costs remain elevated, and the rate environment is tightening. But against these headwinds, the tourism boom provides a powerful and genuine positive force. The challenge for Caribbean policymakers is to ensure that the revenue and employment generated by the tourism recovery translates into improved living standards and housing opportunities for all segments of their populations — not just those fortunate enough to own assets in the right markets at the right time.

The Caribbean Property & Investment Review is published monthly and covers developments during the preceding calendar month. All factual statements reflect information publicly available at the time of publication.