|From Boom to Gloom|
Industries worldwide shuddered as financial markets plunged in 2008. As the current recession’s breadth and depth has become evident, the aftershocks have continued into 2009. According to the World Economic Forum’s report on Travel and Tourism, the negative influences have resulted in dramatic decreases in hotel performance metrics, the effects of which are evident in the sobering forecasts for both lodging stocks and hotel operations in 2009.
One example of this is Singapore. The Singapore Tourism Board announced last month a decline in tourist arrivals to Singapore by 13% in January 2009 compared to January 2008. In addition, hotel revenue has reportedly decreased by around 30% with hotel occupancy rates down to 67% in January 2009 against 85% during the same period in 2008. Amidst the current global recession, the STB anticipates tourism income for 2009 to be down approximately US$1 billion from US$7.8 billion compared to US$9.6 billion in 2008.
Long time Turks and Caicos developer and Hotelier, Mark Durliat sat down with the ‘fp’ to explain the local effects of this global recession and offers some predictions as to what we can expect over the next two years.
According to Mr. Durliat, the Turks and Caicos is a microcosm of the world. This means, that we are affected by the global economics as much if not more than most other places. “I was recently at a tourism conference in New York and major players, such as Marriott and Four Seasons, are all talking about the currently challenging times. They are experiencing layoffs, foreclosures and half-built projects,” explained Durliat.
So how does this relate to the TCI’s current development?
“We are fortunate in the Turks and Caicos, in that, what we built was not speculative development. In addition, we focus on high quality construction, good locations and most importantly, business people with a stake in the business,” affirmed Durliat.
Durliat went on to further define the situation, saying, “This means that we are not seeing the major effects other places like Las Vegas or New York are, where you see 40 story high rises sitting two-thirds empty. That affects the market tremendously.”
According to Durliat, the development so far in the Turks and Caicos has focused on the combination of bringing new fresh capital, risk capital and investment capital into the market. This has proven a good strategy, in that the principles are built on a solid foundation offering a sustainable market.
The foundation of the Turks and Caicos being a convenient location, just a short flight to the U.S., a beautiful location, the natural beauty of the TCI is incomparable and some of the best tourism products in the world. “Although these are challenging times, none of the fundamentals have changed, so what we are experiencing is a lot of good product in a soft market with good fundamentals,” said Durliat.
Durliat says this is the key to a successful market and when things turn around on the financial markets, the Turks and Caicos will rebound quickly. Durliat expects this turn around to occur in the Fall 2010 season, which reflects the same sentiment the World Economic Forum predicted earlier this year.
Although he is not expecting the market to rebound for another 14 months or more, Durliat and Grace Bay Resorts have a lot of high points to celebrate in the coming months. In July, Mr. Durliat will be celebrating the grand opening of his sensibly priced, professional housing project One Lofts.
Shortly thereafter, Grace Bay Resorts expects to be opening the new Veranda managed by Grace Bay Resorts. The soft opening is expected in October of this year and promises the new job opportunities on Providenciales.
As for the present and what he plans to do during what he considers a flat tourism market, Durliat says he and the Grace Bay Resort team are focusing on improving their operations, while at the same time improving their efficiencies. “As a company, we are trying to keep our staff, as well as keep up our five star quality. This is very challenging in these times,” said Durliat.
Looking forward, Durliat is optimistic about the future of the Turks and Caicos. As history has proven, all downturns are followed by upturns and we must stay focused on the positives to come.
“As a company, we have continued to invest in the country in a very meaningful way. Today, although times are challenging, all the reasons we came here and all the people we brought in, all came because of the foundations, which were so appealing. Those foundations have not changed.” says Mark Durliat.
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