Where should any would-be developer start? What would be your top tips for selecting the ideal location?
“If you’re not an experienced hotel developer, the Caribbean can be a tricky place to do business. So, you need to know your market or have a comprehensive market study undertaken. You need to volume of tourist traffic and airlift. Also, how you are going to market your hotel (independent operator or a brand?), your unique selling points to help you differentiate from the competition, any risks, potential threats and the competition. Location is key, and normally in the Caribbean a site with good views and a good beach is a given. Think about the distance to the airport, the availability of staff, and access to utilities: water, sewage treatment, electricity, and telecoms. Finally, consider government policy and legislation in your chosen location. Are there any hotel or tax incentives in place that could provide a financial advantage for you?”
2. Once you’ve acquired a site, how would you go about designing a hotel?
“Firstly, you need to have a clear vision. Are you luxury, design-driven, green? That will influence how you go about designing the hotel. Secondly, you need to work with a talented master planner who will lay out the building on the site and ensure they are placed in the right location. You need to maximize views, and take account of how the sun moves across the site (to prevent shadows on the pool or beach). Also, consider access and servicing, and, take advantage of the breeze to provide natural ventilation – power is expensive in the Caribbean.”
3. Can you use unusual natural features of the landscape to a hotel’s advantage?
“Certainly. You may want to accentuate them. It could be that you have a waterfall, some magnificent trees or a stream running through your site. You might want to accentuate the features and align them to your parts of your hotel such as the restaurant or spa.”
4. What challenges particular to the Caribbean region should be front of mind?
“The first and probably biggest challenge in the Caribbean is building on time and on budget. Controlling costs is an absolute priority. The Caribbean is a dreamland. People with fortunes can come and lose them. So, you need to set your income stream assumptions vis a vis room rates, occupancy, operating costs and continue to use them as guide to what you can afford to invest to make it viable. The second major challenge is bringing together an operational hotel management team. Work permits for overseas staff maybe required and staff training and productivity needs to be taken account of.”
5. What would you advise – new build or buy and re-develop?
“Well, the advantage of a new build is you are working with a clean slate. Redevelopment can be attractive, because you may be able to purchase the property for a reduced price and, as some say in the hotel world, the first investor loses money, the second loses a little bit of money, and the third gets it for the right price. However, if you redevelop a property, there may be things that cost-wise are prohibitive to change, so you need to ensure the footprint of the property gives you sufficient scope to do what you want to do.”
6. Any final words of advice for would-be developers?
“Proceed with caution. Due diligence is the key. The biggest mistakes are made in the beginning, either by buying the wrong site or employing the wrong people to give you advice. Work with a reputable master planner, architect or project manager such as BCQS that has been around the block and can give you some sage advice. And choose the right builder!”
This article was originally published in Issue 6 of The Caribbean Property Investor magazine. To read the full issue, click here.