Resorts

Palm Trees When it comes to the travel and tourism industry, the Caribbean seems to have it all: Exotic locales, yet not far from home … a “live and let live” culture that outdoes even Las Vegas or New Orleans in its breezy permissiveness … an area blissfully free of terrorism or other nasty intrusions of the “post-911” world.

And yet, the 2008 financial numbers are in on the Caribbean tourism industry, and they’re not pretty. According to PKF Hospitality Research, hotels across the Caribbean experienced a 16% decline in profits in 2008. And the prognosis for 2009 doesn’t look any better.

The downturn is having a major negative impact on most Caribbean economies, because in this region, “tourism” and “the economy” are essentially one and the same.

How are hotels and resort properties responding? By offering all sorts of special incentives and package deals. Or course, that’s what hospitality properties are doing all over the world, so the law of diminishing returns comes into play.

Many hotel and resort development projects are being shelved, too. PKF Hospitality Research counts as many as 51 of 105 development projects in the region that have been mothballed for the foreseeable future.

Is a turnaround in sight? If there’s to be one, it won’t be known until next year. Most of the region’s tourism dollars are brought in during just three months of the year — January through March.

In 2009, of course, that three-month period just happened to parallel the very worst part of the global downturn. So, based on that very low benchmark, most observers are expecting — hoping — that early 2010 will turn out to be “Calypso Season” rather than “Cataclysmo Season.”

What a difference a few months make. “Way back” in 2008, high-end resort properties in exotic locations were doing a healthy business hosting corporate events. Large corporations have long been a core resort customer segment that has delivered volume business year after year – major contributors to the bottom line even as resorts have also attracted their share of weddings and other smaller events.

The economic meltdown has now brought hugely negative publicity to corporate events held at resorts, the result of news reports that federal government bailout money has gone to pay for them. These events have been described by politicians and the press as “outrageous,” “excessive,” “junkets” and “boondoggles” – places where well-heeled business types get to wine and dine and cavort in the sun on the taxpayer’s dollar.

Even the AFL-CIO union hasn’t been immune to the criticism, coming under fire for holding its annual convention at the exclusive Fontainbleau Hilton resort property in Miami Beach.

While one can certainly fault these companies and organizations for being politically tone-deaf, the fact is that business does get carried out at these events. Even in today’s electronic age, it is still important to organize face-to-face get-togethers on a regular basis.

Enter the Conference Center. This corner of the hospitality industry, long relegated to backwater status, has consistently labored under the image of being far less impressive and exciting than the resort segment. Now, sensing an opening, conference centers are making their move. They’re promoting themselves as a preferred location for serious business events – far away from tourist attractions or white sand beaches, extreme recreation or other distractions (the ubiquitous golf being the exception).

Properties like the Marriott Aspen Wye Conference Center in Maryland and the Wyndham Princeton Forrestal Conference Center in New Jersey are stepping up promotion, as is the International Association of Conference Centers. The basic message is that conference center properties are the places where productive meetings take place, free of distractions. “Serious-minded meetings are in … posh or over-the-top venues are out” is the order of the day.

Plus, right now it just sounds a lot better from a PR standpoint if you can report that your corporate event is being held in a location five miles from Trenton, New Jersey.