Publication Date: 3 December 2022 | Coverage Period: 3 November – 2 December 2022
Morning Briefing
- Caribbean winter season bookings at record pace: Regional hotel associations across Jamaica, Barbados and the Dominican Republic reported December 2022 forward bookings running 15–25% ahead of the equivalent period in 2019, the previous peak year, driven by post-pandemic revenge travel demand at full intensity.
- Dominican Republic southwest reconstruction reaches halfway: DR government agencies overseeing post-Hurricane Fiona reconstruction in the Barahona and Independencia provinces reported that emergency infrastructure works — bridge repairs, road restoration and temporary housing — were approximately 50% complete as of late November.
- Jamaica north coast villa rentals at record highs: Holiday rental platforms reported that villa rental rates in Montego Bay, Ocho Rios and Port Antonio for the Christmas–New Year period were 30–40% above December 2021 levels, with inventory almost entirely sold out by early November.
- Barbados luxury market records strong Q4 sales: Real estate agents in Barbados reported a strong Q4 2022 sales period, particularly on the platinum west coast, with several transactions above US$3 million completing in October and November and buyer enquiries outpacing available inventory.
- Trinidad Carnival 2023 preparations begin in earnest: With Carnival season officially beginning after Independence Day, Port of Spain’s short-term rental market began to see forward bookings for February 2023 — the first full Carnival since COVID — at extraordinary rates, with premium apartments in St Clair and Woodbrook already fully booked.
- Cayman Islands launches new luxury development approvals: The Cayman Islands Planning Authority approved two new luxury residential developments totalling 120 units on Grand Cayman, reflecting the island government’s recognition that additional residential supply is needed to accommodate the island’s growing population of high-net-worth residents.
Holiday Season 2022: Caribbean Tourism at Full Capacity
As the Caribbean heads into its most important tourism period — the Christmas through February high season that generates a disproportionate share of annual visitor revenue — the industry is operating with a confidence and energy not seen since before COVID-19 closed borders and shuttered resorts in March 2020. The combination of post-pandemic pent-up demand, the fading of COVID travel restrictions and protocols, and the resilience of consumer spending on experiential travel despite broader economic headwinds has created conditions that regional hoteliers and property investors have been hoping for since the industry’s dark days of 2020–2021.
The booking data tells a clear story. Hotels across Jamaica’s north coast corridor — from Negril through Montego Bay to Ocho Rios — are reporting December occupancies at or above 90%, with Christmas and New Year weeks essentially sold out. This represents not merely a recovery to 2019 levels but in many cases a new peak, driven by average daily room rates that are 20–30% above pre-pandemic levels. Hoteliers who implemented significant renovation programmes during the forced closure of 2020–2021 are now reaping the benefits of improved product at higher price points.
Barbados presents an equally impressive picture. The platinum coast’s collection of boutique hotels, villa communities and branded resorts is running at near-full capacity for the winter season, with several properties reporting their highest-ever December revenues. The island has benefited enormously from its Welcome Stamp remote-working visa, which attracted a cohort of high-income professionals during the pandemic years who then converted into property buyers and longer-stay visitors. Many of these individuals have become ambassadors for Barbados in their professional and social networks in North America and the UK, generating a word-of-mouth referral pipeline that has meaningfully supported demand above and beyond traditional marketing channels.
The Dominican Republic, despite the disruption of Hurricane Fiona in the southwest in September, has seen its eastern tourism zone — Punta Cana, Bavaro, Cap Cana — operate entirely unaffected by the storm and at record visitor numbers. The geographic separation of the DR’s tourism infrastructure from the storm-affected southern coast has protected the industry, and the government’s swift action to demonstrate that the country remains a safe and attractive destination has been effective. All-inclusive resort occupancies in the Punta Cana zone have been running above 85% since October.
Post-Fiona Reconstruction: Progress Under Pressure
Hurricane Fiona’s landfall in the Dominican Republic’s southwest on 19 September 2022 caused extensive damage to communities in Barahona, Independencia, Pedernales and surrounding provinces — areas that were already among the least economically developed in the country. Two months on from the storm, the reconstruction picture is one of meaningful but incomplete progress. Emergency infrastructure — roads, bridges, power lines — is being restored with reasonable speed, supported by government emergency funding and international assistance. Temporary housing has been provided to thousands of displaced families.
The more complex and lengthy task of permanent housing reconstruction has barely begun. Building back-better standards — which the DR government has committed to, requiring that reconstructed housing meets enhanced wind resistance and flood resilience specifications — take longer to design and deliver than emergency temporary measures. International experience from post-hurricane reconstruction programmes, including Puerto Rico after Maria in 2017, suggests that the full housing reconstruction cycle typically takes three to five years. Managing community expectations across this timeline, while avoiding the politicisation of reconstruction that has hampered recovery elsewhere, will be a significant governance challenge for the Abinader administration.
In Puerto Rico, the parallel Fiona reconstruction is proceeding within the complex bureaucratic framework of US federal disaster response. FEMA and HUD have released billions in assistance funds, but the disbursement and project execution processes are slower than Puerto Rico’s government and community advocates would wish. The island’s electrical grid — which was still not fully repaired from Hurricane Maria in 2017 at the time Fiona struck — suffered significant additional damage, and the ongoing vulnerability of Puerto Rico’s energy infrastructure to storm damage is now a major political issue on the island and in Washington.
For the Caribbean insurance market, the Fiona losses have reinforced the concerns that have been growing since Hurricane Irma and Maria devastated the northern Caribbean in 2017. The combination of relatively low insurance penetration in the affected areas, the concentration of losses in government-owned infrastructure, and the increasing frequency of significant storm events is creating pressure on both the Caribbean Catastrophe Risk Insurance Facility (CCRIF) and the private reinsurance market. Premium rates have risen sharply for Caribbean property insurance in 2022, with several insurers reducing their Caribbean exposure and passing increased costs to policyholders.
Luxury Property Market: Resilient Demand Despite High Rates
One of the more striking features of the Caribbean property market in the second half of 2022 has been the resilience of luxury values in the face of the most rapid global interest rate increases in four decades. In most major global real estate markets, the combination of higher borrowing costs and economic uncertainty has begun to moderate price growth and transaction volumes. In the Caribbean luxury segment, by contrast, demand has remained robust, driven by a buyer profile that is largely insulated from the mechanics of residential mortgage finance.
The typical Caribbean luxury buyer in 2022 is not primarily a mortgage borrower. They are either purchasing outright with existing wealth, financing through portfolio lending facilities secured against investment assets (which are not directly tied to central bank rates in the same way as residential mortgages), or using structured financing from private banks whose product pricing reflects client relationship considerations rather than benchmark rates. The high-net-worth individuals drawn to Barbados’s west coast, Cayman’s Seven Mile Beach corridor or St Lucia’s Soufriere views are making decisions based on lifestyle, tax planning and wealth preservation considerations that are relatively insensitive to the difference between a 4% and a 5% interest rate environment.
The Q4 2022 Barbados sales data — several transactions above US$3 million completing in October and November — is consistent with this pattern. The pipeline of buyers for premium Barbadian property includes wealthy retirees from the UK and North America, successful professionals seeking a base in a tax-efficient jurisdiction, and increasingly, buyers from continental Europe and the Middle East for whom Barbados’s English-language legal system and political stability are attractive alongside the climate and lifestyle. This internationally diverse demand base provides a degree of diversification that protects the market from any single national economic downturn.
Short-Term Rental Market: The Christmas Premium
For Caribbean short-term rental property owners, the Christmas–New Year period represents a once-a-year revenue peak that can generate in two weeks what a typical property earns in two months of average occupancy. The 30–40% premium on Jamaica villa rental rates for the holiday period compared to 2021 is not unusual — similar premiums are being reported across Barbados, Antigua, St Lucia and the Cayman Islands. Professional management companies have reported that for the best-positioned properties — those with beach frontage, private pools and professional management — Christmas week nightly rates are approaching double the already-elevated in-season average.
This extraordinary seasonal pricing power is influencing investment decisions across the region. Property buyers who are evaluating Caribbean investment properties are increasingly incorporating Christmas and New Year pricing into their return calculations, with the recognition that two to three exceptional rental weeks can materially improve the overall yield profile of an investment. The emergence of dynamic pricing platforms — tools that automatically adjust rental rates based on demand, comparable availability and booking pace — has enabled property managers to capture a much larger share of the premium that peak-period demand can support.
Caribbean Leaders This Month
Jamaica enters the holiday season with north coast tourism infrastructure at or above capacity and villa rental rates at record levels. The combination of exceptional tourism performance and the NHT’s continued mortgage support positions Jamaica well as 2022 draws to a close.
Barbados demonstrates again the premium that its product and destination positioning command, with Q4 luxury sales and holiday season occupancy both at exceptional levels. The island’s successful pivot to higher-value, longer-stay tourism is validated by the market data.
Dominican Republic has demonstrated resilience in maintaining its tourism industry performance despite the Fiona damage in the southwest, with eastern tourism zones performing at record levels. The reconstruction programme is progressing, albeit against a lengthy and complex timeline.
Trinidad and Tobago is already benefiting from Carnival 2023 forward bookings, with Port of Spain’s short-term rental market showing the same enthusiasm that characterised Carnival in its pre-COVID peak years. The economic significance of the first full Carnival since the pandemic cannot be overstated.
Cayman Islands approved new luxury residential supply that signals confidence in sustained demand. The two new developments totalling 120 units will add to an inventory that has been chronically undersupplied relative to the island’s growing high-net-worth resident population.
St Lucia saw strong holiday season bookings across its luxury boutique resort and villa product, with European buyers in particular showing sustained interest in the island’s premium market driven by strong UK marketing and the island’s exceptional value proposition relative to comparable Mediterranean destinations.
Grenada reported strong December enquiries driven in part by the island’s growing reputation among discerning Caribbean travellers who have exhausted the more mainstream destinations and are seeking authenticity alongside luxury.
Antigua and Barbuda saw strong CBI programme activity, with the property investment route continuing to attract buyers from markets where political uncertainty is driving demand for second citizenship and alternative residency options.
Overall regional performer this month: Jamaica, which enters the all-important holiday season with tourism infrastructure at full capacity, villa rental rates at record levels and an economic momentum that positions the island strongly for 2023.
Looking Ahead
The Christmas and New Year period will set the tone for Caribbean tourism and property market confidence heading into 2023. If occupancy and rental performance through December and early January matches the extraordinary booking pace that has been reported, it will reinforce the case for continued tourism-linked property investment and support sentiment across the luxury and short-term rental segments.
Post-Fiona reconstruction in the Dominican Republic and Puerto Rico will continue to be a major policy and financial challenge as the region enters 2023. The pace and quality of permanent housing reconstruction will determine whether affected communities recover their pre-storm economic trajectories or face a prolonged period of diminished productivity and population displacement.
The interest rate environment remains the key macro variable for the affordable and middle-market segments of Caribbean property. With the US Federal Reserve expected to continue hiking into early 2023 before potentially pausing, the affordability window for Caribbean first-time buyers and middle-market purchasers is unlikely to improve meaningfully in the near term. The development banks and government housing programmes will need to absorb as much of this affordability pressure as their capital and capacity constraints allow.
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.
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