Caribbean Tourism Sets Records as FDI Surges Into Hotel and Property Investment Across the Region

Publication Date: 3 October 2023  |  Coverage Period: 3 September – 2 October 2023

Morning Briefing

• Caribbean Tourism Organisation data for the first half of 2023 confirms that regional stopover arrivals have surpassed pre-pandemic 2019 levels for the first time, with Q3 2023 performance on track to deliver the strongest third quarter in the region’s recorded tourism history.
• The Dominican Republic extended its lead as the Caribbean’s highest-volume tourism destination, with arrivals for the first eight months of 2023 tracking above 7.5 million visitors — a trajectory that positions the country to set a new full-year arrival record by year-end.
• Jamaica’s Jamaica Tourist Board reported third-quarter 2023 stopover arrivals running approximately 12 percent above Q3 2022, representing a record Q3 result and generating significant foreign exchange inflows that support the island’s fiscal consolidation programme.
• Foreign direct investment into Caribbean hotel and resort development reached an estimated US$3.2 billion in commitments through the first nine months of 2023, with major international hotel brands including Marriott, Hyatt, Hilton and IHG all announcing new Caribbean projects.
• Cayman Islands stopover arrivals through August 2023 were running at record levels, with the island’s strategy of prioritising high-value visitors over volume generating per-visitor expenditure that leads the Caribbean by a significant margin.
• Short-term rental platforms reported that Caribbean listing revenues for the summer 2023 season exceeded 2022 summer results by approximately 22 percent, driven by both increased listing inventory and higher average nightly rates across key destinations.

Caribbean Tourism Q3 2023: A Historic Quarter

The third quarter of 2023 — July through September — delivered what is shaping up to be the most consequential three-month period for Caribbean tourism in the region’s recorded history. Preliminary data from the Caribbean Tourism Organisation, individual destination tourism boards and major airline capacity reports all point to the same conclusion: Caribbean tourism in Q3 2023 surpassed any previous comparable period, building on the already-strong first and second quarter results to complete what will almost certainly be the best full year for Caribbean visitor arrivals since the industry began collecting systematic data.

The record is particularly remarkable because Q3 is historically the Caribbean’s shoulder season — the period between the peak winter tourism season (December through April) and the modest recovery that autumn can bring. Traditionally, the combination of summer heat, high season-end fatigue among frequent Caribbean visitors, and the onset of the Atlantic hurricane season would dampen demand during July, August and September. The fact that Q3 2023 has instead produced record results points to structural changes in Caribbean tourism demand — specifically, the broadening of the visitor base beyond the traditional Northern Hemisphere winter-season traveller to include a genuinely year-round demand pattern from a more diverse origin market mix.

Several factors account for this structural shift. The growth of direct air routes from Latin American cities to Caribbean destinations has created a summer-heavy inbound pattern from markets like Colombia, Brazil, Mexico and Panama that was not significant a decade ago. The expansion of Caribbean cruise itineraries operating through the summer season has brought additional visitors to port-of-call destinations during the traditional shoulder period. And the maturation of the short-term rental market has made Caribbean destinations more accessible and affordable for mid-market visitors from North America who, in an earlier era, would have considered the Caribbean exclusively a luxury winter destination.

For property investors, record Q3 tourism data is not merely an interesting statistic — it has direct implications for asset underwriting. Hotel and short-term rental investment models that assumed strong winter season performance and weak summer performance now need to be recalibrated. Properties in destinations that are demonstrating year-round demand can support higher valuations and lower risk profiles than those that remain heavily dependent on the December-to-April window. The best-positioned Caribbean property markets for investment purposes in 2023 are those that combine strong winter season performance — which remains the dominant revenue period — with demonstrably improving shoulder season results.

Dominican Republic: The Caribbean’s Tourism Powerhouse

The Dominican Republic’s tourism performance in 2023 has been a study in scale. As the Caribbean’s most visited destination by a significant margin, the DR brings a fundamentally different perspective to Caribbean tourism analysis: where most Caribbean islands measure success in hundreds of thousands of arrivals, the Dominican Republic is operating at a scale of millions. With arrivals for the first eight months of 2023 tracking above 7.5 million, the country is on course to close 2023 with total arrivals exceeding nine million — a figure that would not only be a Dominican record but would place the country firmly among the most visited tourism destinations in the entire Americas.

Punta Cana remains the engine of this performance, with the resort corridor’s thousands of all-inclusive hotel rooms maintaining occupancy rates of 80 to 90 percent across the summer season — a performance that would be extraordinary even for a peak-season winter market. The DR’s aggressive airline route development strategy, which has made Punta Cana one of the most connected international airports in the Caribbean, is a critical enabler: the country has direct flights from dozens of North American, European and Latin American cities, reducing the friction that limits arrival volumes at less-connected Caribbean destinations.

Foreign direct investment into Dominican hospitality and real estate has responded to this performance with corresponding enthusiasm. Major international hotel brands are expanding their Dominican pipelines, with Marriott, Meliá, Hilton and Iberostar all announcing new project commitments in 2023. Beyond the traditional Punta Cana corridor, the government’s development of secondary tourism zones — Miches, Samana, and the north coast around Puerto Plata — is opening new geographic areas for property investment, typically at pricing that offers a discount to the established Punta Cana market while the infrastructure and tourism product develop.

Jamaica and Cayman: Premium Market Leadership

Jamaica’s Q3 2023 tourism performance has been a source of considerable satisfaction for the Jamaica Tourist Board and the broader hospitality sector. A 12 percent year-on-year increase in third-quarter stopover arrivals represents performance well above the Caribbean regional average and confirms that Jamaica is not merely recovering to pre-pandemic levels but is actively growing its market share in global tourism. The Jamaica product — a combination of all-inclusive resort tourism concentrated on the north coast, boutique and independent tourism in the Kingston cultural sector, and adventure and wellness tourism in the Blue Mountains and rural parishes — appeals to a wide demographic range that is driving this growth.

The property investment implications of Jamaica’s tourism performance are clear and are being actively processed by a growing investor community. Tourism-adjacent property on the north coast — from Montego Bay through Ocho Rios to Port Antonio — is attracting increasing interest from both local investors targeting the short-term rental market and international buyers drawn by the island’s relative value compared to more mature Caribbean markets like Barbados or the Caymans. The Kingston residential market is also benefiting from tourism sector employment income and the general confidence effect of a sector performing at record levels.

The Cayman Islands, operating at the extreme premium end of the Caribbean tourism spectrum, has sustained a different but equally impressive performance narrative through 2023. The island’s deliberate strategy of quality over quantity — limiting cruise ship calls, investing heavily in tourism infrastructure quality, and targeting ultra-high-net-worth visitors through premium resort development — has delivered per-visitor expenditure levels that lead the Caribbean by a substantial margin. A Cayman visitor typically spends three to five times the Caribbean average per trip, a metric that justifies the investment in infrastructure and product quality that Cayman’s tourism strategy requires.

FDI Into Caribbean Hotel and Property Development: The Pipeline in 2023

The record tourism performance of 2023 has catalysed a corresponding wave of hotel and property development investment across the region that will shape the Caribbean property landscape for years to come. Estimates from Caribbean development finance institutions and property advisory firms suggest that total committed FDI into Caribbean hotel and resort development reached approximately US$3.2 billion through the first nine months of 2023 — a figure that places the current cycle among the most active in the region’s investment history.

The nature of this investment varies significantly by destination. In the Dominican Republic, large-scale integrated resort developments — combining hotel rooms, branded residences, golf courses and marina facilities — account for the majority of the investment value. In Jamaica, the development pipeline is more diverse, including both international brand-flag hotel developments on the north coast and smaller boutique and villa developments in emerging tourism areas. In the OECS, CBI-linked resort investment continues to drive the majority of new hotel supply, with Grenada, St Kitts, Antigua and St Lucia all seeing active construction in approved CBI resort developments.

Short-term rental platform investment is increasingly visible as a distinct category within the Caribbean property FDI landscape. Institutional investors — private equity funds and real estate investment platforms specialising in the short-term rental asset class — are beginning to deploy capital at scale in Caribbean markets, acquiring and professionalising portfolios of short-term rental units that were previously individually owned and managed. This institutionalisation of the short-term rental segment is likely to accelerate in the coming years as the asset class matures and the data on Caribbean short-term rental performance becomes more robust and accessible to institutional underwriters.

Caribbean Leaders This Month

Dominican Republic leads the Caribbean tourism performance narrative in Q3 2023 with arrivals tracking above 7.5 million for the year to August, on course for a new annual record that will cement the country’s position as the hemisphere’s most visited Caribbean destination by a substantial margin.

Jamaica delivered a record Q3 2023 tourism result with 12 percent year-on-year arrival growth, generating the foreign exchange inflows and hospitality sector employment that underpin the island’s property market fundamentals across both the Kingston residential market and the north coast investment market.

Cayman Islands maintained its per-visitor expenditure leadership, with the island’s premium tourism product and financial services sector demand sustaining Seven Mile Beach property values at levels that represent some of the highest in the Americas.

Barbados continued to attract high-value FDI in its hospitality sector, with renovation and new development investment on the Platinum Coast reflecting confidence in the island’s premium market positioning and the depth of demand from international second-home buyers.

Guyana reported continued commercial property market strength in Georgetown as oil sector operations and the growing professional services economy drove sustained demand for quality office, retail and residential accommodation well beyond available supply.

St Lucia continued to benefit from new hotel brand commitments — with international operators investing in new and converted properties that are expanding the island’s accommodation capacity and supporting the premium positioning strategy central to St Lucia’s tourism marketing.

Grenada saw active CBI-linked resort construction activity supporting the construction sector and generating employment, while the island’s growing reputation as an Eastern Caribbean lifestyle destination attracted a modest but growing stream of direct property investment from international buyers.

Trinidad and Tobago maintained steady commercial property market conditions, with the energy sector providing the economic backbone for Port of Spain’s professional services district and the broader commercial real estate market. Overall Q3 2023 regional performer: Dominican Republic, for a tourism performance that sets new standards for Caribbean visitor arrival volumes and the property investment activity it has catalysed.

Looking Ahead

October brings the final phase of the Atlantic hurricane season, with the statistical peak period (typically around 10 September) now passed and the season’s activity historically diminishing through October and November. Caribbean tourism operators will be monitoring weather developments carefully while simultaneously executing the advance bookings and marketing programmes that will define the winter 2023–24 season.

The FDI pipeline for Caribbean hotel and property development will continue to be a major story through the final quarter of 2023, as developers complete financing for projects that are expected to break ground in 2024. The capacity additions expected to come to market over the next two to three years will be a critical factor in determining how Caribbean hotel RevPAR — revenue per available room — evolves from its current elevated levels as new supply gradually meets the strong demand the region is experiencing.

The short-term rental regulatory landscape will continue to develop across Caribbean jurisdictions as governments balance the economic benefits of platform tourism against housing market concerns. The outcome of ongoing regulatory reviews in Jamaica, Barbados and across the OECS will be closely watched by property investors who have positioned portfolios around the short-term rental model, with significant implications for the investment returns achievable from this increasingly popular asset class.

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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