Photo courtesy of Cayman Islands Department of Tourism

The Cayman Islands are not alone among tourism-reliant Caribbean destinations that face challenges ranging from reportedly low hotel occupancy to outdated transportation and tourist facilities in need of upgrades. For Cayman however, those challenges come amidst sharply higher tourist arrivals.

“We are very pleased to say that it has been a banner year for arrivals, demonstrated by the year-to-date increase of over 9.4 percent, or over 18,000 visitors,” said Rosa Harris, the Cayman Islands Department of Tourism (CIDOT)’s director of tourism.

Harris cited Caribbean Tourism Organization statistics that show Cayman hosted 210,491 land-based visitors between January and June of this year. Cayman is also among the leading cruise destinations, hosting 861,517 cruise ship visitors during the same period this year, an 8.6 percent increase over 2013 and the fourth-highest total among destinations tracked by CTO.

The Cayman archipelago’s tourism success is somewhat surprising considering the numerous challenges the destination faces. Owen Roberts International Airport, located on the main island of Grand Cayman, is outdated and subject to overcrowding. The airport operates at double its 500,000-person capacity during peak periods, said Moses Kirkconnell, the Cayman Islands tourism minister.

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Also despite being among the world’s most popular cruise destinations, Cayman has no pier or terminal for large ships. Public infrastructure across Georgetown, Grand Cayman’s main street and the center of its downtown tourist district, is inadequate with narrow sidewalks greeting the growing contingent of cruise visitors and sightseeing land-based tourists.

Incredibly, Cayman was most recently in the spotlight for reports of low hotel occupancies from respected travel research firm Smith Travel Research. The firm’s Smith Travel Report indicated that despite the surging arrivals numbers, occupancy rates at Cayman hotels had actually declined in the first six months of 2014.

The report was profiled in a Cayman Compass newspaper article and cites monthly occupancy rates and revenue data for a sampling of 1,304 hotel beds at “larger Seven Mile Beach properties.” Cayman’s occupancy rate is reported at 72.4 percent for the first half of 2014.

Harris said the Smith Travel Report data reflects only a fraction of the destination’s hotel base. “The information was specific to branded properties, of which there are only three in the Cayman Islands registered with Smith Travel,” she said. “It does not reflect the status of the overall industry performance.” 

Harris added, “We are very happy to see that our arrivals are up year over year, a consistent trend that we are confident will continue throughout the remainder of 2014.  Our accommodations sector—hotels, condos, villas—has shared with us that they have experienced exceptional increase in their ADR.  This is positive news which further demonstrates that our increase of air arrivals has lent itself to a record year for them.”

"We have seven participating properties in the Cayman Islands," said Rachel Urie, a spokesperson for STR, which produces the Smith Travel Report. "While we release specific aggregated information to program participants, we do not provide information for specific hotels and generally do not provide information when the sample includes fewer than four hotels."

She added, "In the Cayman Islands, STR’s July data represents 33.8 percent of the 3,862 hotel rooms located in the market. STR believes that while it does not represent every room in the market, it does represent a statistically accurate portrayal of the market."  

Nevertheless many Cayman hoteliers are reporting strong occuancy numbers. “Performance has been phenomenal and we are very pleased with the record breaking performance of 2014,” said Kenneth Hydes, president of the Cayman Islands Tourism Association (CITA), which represents Cayman hoteliers.

“I speak on behalf of the CITA membership to say that this year’s figures have exceeded our expectations and we are encouraged with the performance to date.” 

Meanwhile the Cayman government continues work to address overcrowding at the airport, the development of a cruise ship pier and terminal and redevelopment of Georgetown’s public infrastructure. Kirkconnell said Cayman will begin construction on the new airport terminal in early 2015 and would also seek to start work on a new cruise ship pier and terminal next year.

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Kirkconnell added that the cruise terminal re-development will also include a re-development of public and tourism infrastructure in the capital of Georgetown. “The revitalization of Georgetown is key for the people of the Cayman Islands and for our tourism product,” he said.

In addition a handful of private Cayman entrepreneurs are taking matters into their own hands. Sixteen landowners have joined together to construct an oceanside esplanade they say will provide pedestrian access to waterfront bars and businesses. The concrete boardwalk will extend across their properties, from Georgetown to the Seven Mile Beach district.