Last updated: 07:14 PM ET, Wed October 19 2016

Zika Virus: How Has It Impacted Caribbean Hotels?

Hotel & Resort | Brian Major | May 24, 2016

Zika Virus: How Has It Impacted Caribbean Hotels?

PHOTO: Caribbean hotels suffered declines in all first quarter “key performance metrics” due to the Zika virus, an STR report finds. (Photo by Brian Major).

Various sources have described the Zika virus’ impact on Americans’ travel to the Caribbean as everything from negligible to profound. Count travel research firm STR among the latter, as the firm’s most recent report finds performance decreases among Caribbean hotels in the first four months of 2016 can be linked to the Zika virus’ spread.

Caribbean hotel occupancy declined three percent year-to-date to an average of 72.9 percent between January and April of 2016 among properties reporting to STR. Average daily rate (ADR) declined 1.4 percent to $268.86 during the same period and revenue per available room (RevPar) dropped 4.4 percent to $195.99 according to STR’s report. STR’s sample represents 21.3 percent of 236,799 rooms in the Caribbean, said a company spokesman.

“All of the key performance metrics are down” for Caribbean hotels in the first quarter despite a “strong 2015,” said Steve Hennis, STR’s VP for consulting & analytics. Moreover, Caribbean destinations have generated only “a very modest increase” in new rooms, he said.

Hennis noted there is some question surrounding Zika’s impact on Caribbean travel, citing an April survey from Travel Leaders Group that found 96 percent of American consumers say the Zika virus has not impacted their travel plans this year.  

“While that sounds positive, the converse would state that 3.9 percent of Americans did change their travel plans because of the virus,” said Hennis. “A 3.9 percent drop in demand would have a fairly noticeable impact on occupancies, and data for the Caribbean hotel industry shows the effects already.”

While a weak Canadian dollar and an East Coast blizzard in January have also impacted Caribbean hotel stays, “the overriding issue appears to be fear over the Zika virus,” said Hennis.

Zika issues remained prominent this week as President Obama met Congressional resistance to his request for $1.9 billion in emergency funding to combat the spread of the virus. The U.S. Centers for Disease Control has issued travel notices for 20 Caribbean nations, and earlier this month the Caribbean Public Health Agency (CARPHA) launched Caribbean Mosquito Awareness Week, a joint initiative among the agency’s member states.

STR’s report also found 58 percent of reporting Caribbean hotels reported occupancy declines, and nearly one-fourth reported occupancy declines slide of eight percent or more. Also, 47 percent of hotels reported ADR decreases and 56 percent reported RevPAR decreases.

Despite the downturn, Hennis compared Zika’s impact to that of other recent epidemics including SARS and swine flu. “The expectation is that Zika fears will subside and the issue will simply become another part of the travel decision-making process,” he said.

Zika will, in time, become another factor travelers consider “much like concerns about social unrest, terrorism and even bad weather,” he added. 

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