As many as five major new hotels could come to Cayman within the next two years.

William Peguero, chairman of the National Investment Council, told the Caymanian Compass that the council was already talking to a number of industry players, including Hilton’s Blackstone group, Wyndham, Park Hyatt, Renaissance, Waldorf-Astoria and Four Seasons, as reported in this paper.

“One of the things we’re very keen on and I’m trying to drive is that we don’t want stand-alone [projects] and we don’t want individuals who just want to do their first hotel. We’re looking for groups, like the Four Seasons, who have their own reservations system and are not dependent absolutely on the Department of Tourism and Cayman Airways to help them fill their rooms. These [hotels] have their own reservations system that can give them 50 to 60 per cent occupancy on their own and they have their own promotion, their own marketing,” he said.

Development syndicates

Mr. Peguero said that dialogue between Cayman Islands representatives, hotel chains and potential developers had been ongoing since the Caribbean Hotel and Trade Investment Conference in San Juan, Puerto Rico in May. The industry talking shop was attended by several Caymanian big-hitters, including Premier McKeeva Bush, Michael Ryan, Dart Realty, investment banks and tourism professionals.

The hotel names mentioned, Mr. Peguero said, manage rather than build resorts, and to that end the National Investment Council had been talking to developers interested in constructing the properties.

“We have received several syndicates with funds willing to do the development, provided we are able to find the management, so it’s a win-win situation. Once you can find a syndicate that can do the project, they tailor the project toward the wishes and needs of the management. Then, obviously, it’s a no-brainer because you get a 20- or 30-year contract that is very beneficial for the owner of the property so [everybody benefits].

“The developers are mostly syndicates and investors from abroad, but obviously we’re looking at every type of angle where we can pair them up with a local developer or individual with means. That we have already done; we pair them up with individuals or groups that are already here. We do the matchmaking, if you will, because that’s part of the wishes of the National Investment Council - not to just bring people in but to galvanise them with the people we already have here. And we want people who bring not only resources but expertise as well,” he said.

Room stock lost

The chairman of the council added that at certain times of the year there is simply not enough room stock on the island to cope with the demand. There was a loss of approximately 800 rooms from now defunct resorts such as Sammy’s Inn, Sleep Inn, the Hyatt and Courtyard Marriott, a situation that needed to be addressed, said Mr. Peguero. He observed that the condominium rental pool had moved from the $300,000 to $500,000 range of past years into upper-end condos valued at over a million dollars that were ‘not in the same game’.

Sports tourism was also something that the investment council has at the forefront of its thinking, he said.

“We also would like to bring a mega-resort that would have a golf course because obviously we have a situation where people are looking at that type of amenity and we believe that a golf course would play well. Golfers are good tourists, they spend a lot of funds and are good for tourism. We want those type of clients to visit our island, but we have to diversify and we have to give them more options than what we have right now.

“We have several sites, as a matter of fact, on West Bay Road, [for example the area] that the folks that own the property of where the Courtyard is - which I believe is up for sale - [where] I believe we will have the opportunity to do a golf course inclusive resort, residencies and quite a large development,” he said.

Mr. Peguero added that there are other parts of the island that are being looked at for new properties, including Frank Sound and East End. A number of boutique hotels are also being discussed at different locations, as well as business-oriented resorts.

“We would like to entertain one or two business hotels because in reality that is not being served to the level that it should be served, and there are some local entities looking at that as well,” he revealed.

Cyclical industry

The investment council chairman said that the projects on the table were ones that could be achieved within the next 24 months. This is because there is a widespread view within the resort and hotel industry that the sector will begin to pick up within two years. Experts at the Puerto Rico conference had pegged the hospitality and hotel sector as cyclical in its ability to rebound from macroeconomic factors, such as the recent recession.

“The whole industry believes that the preferred locations and travelling will be back out [of recession] again at the end of 2012. I think you saw it in the Premier’s remarks at the beginning of the budget that we’re not expecting that we’re going to come out next year. We’d be glad to level, have the bleeding stop this year and have maybe small, little growth and begin to get some momentum and traction. But the reality is that everyone’s just trying to keep their market share for this year and next, to stabilise and begin to put in place the things that will help us going down the road,” said Mr. Peguero.

Medical tourism

One of these imminent projects was the delayed revitalisation of Owen Roberts International Airport, said the chairman. By extending the runway, more options for European visitors could be generated and current facilities need to be upgraded, particularly with the advent of medical tourism. Implementing jetways and facilitating the movement of people in wheelchairs or with particular medical requirements are examples of things that could be done in the immediate future. The medical tourism industry, noted Mr. Peguero, is known to be relatively recession-resistant.

“I know first-hand that a lot of the American health insurance companies are now looking at, and negotiating with, countries that can provide similar services for a fraction of the cost, to the same standard [of health care]. [This would involve] board-certified physicians, English-speaking professionals and joint commission-approved physicians and facilities. We’re not talking about changing apples for oranges; we’re talking about apples for apples, just a different jurisdiction.

“The Caribbean right now spends approximately US$700 million on medical tourism in South Florida. That’s people going from the Caribbean into Florida for medical services. They don’t go for a vacation; they go there specifically to get a medical procedure done. Of course, they may go shopping after that, but the point is that they are there for medical reasons. I believe that if we have a medical facility here, then the Cayman Islands can tap into that market,” he added, noting that the average party of visitors associated with a medical procedure is comprised of 2.8 individuals.

Mr. Peguero said that there is a “will and desire” to move on with a Public Finance Initiative to achieve these improvements at the airport.

“Going for a PFI makes the most sense. You can get what you need and at the same time it doesn’t have to become another expense of the current expenditure of the government,” said the chairman.

He added that it was important for Cayman to be proactive in order to become less dependent on certain sectors. Diversifying could bring new business, income and jobs, concluded Mr. Peguero, who said that within the next month details of the initiatives would be made public and sent out for corporations to bid on.