EDITORIAL
Protecting the Budget End of Stay-Over Tourism
Thursday, June 17, 2004
Recently, it has been reported that the Ritz-Carlton Group, led by
developer Michael Ryan, is interested in purchasing the Treasure Island Resort
for usage as housing for its construction workers initially, and then for
employees of the Ritz-Carlton Grand Cayman and their families when the
development opens.
Several parties have voiced their opposition to the proposal, most notably
the Minister responsible for tourism, the Hon McKeeva Bush, and the Minister
responsible for housing, Dr the Hon Frank McField.
Still, reports indicate that Scotiabank, pending approval from the courts
and its corporate office, is willing to sell the Resort to the Ritz-Carlton
Group.
Finding housing for large numbers of expatriate staff is indeed a challenge
in the Cayman Islands, especially for workers who are not earning high
salaries like professionals in the financial industry, so from a business
standpoint, the Ritz-Carlton’s desire to buy Treasure Island makes perfect
sense.
However, there is much more at stake with the potential sale of that Resort
for that purpose than just the resolution of a difficult housing problem.
Treasure Island is one of the few hotels in Grand Cayman that offers rooms
at rates that appeal to the lower income bracket of the stay-over tourism
market.
The Island has already seen the 105-room Sleep Inn, another hotel that
catered to that segment of the market, converted into residential housing, in
that case a dormitory for first-semester students of St Matthews University
School of Medicine. Losing the 280-room Treasure Island to residential housing
as well could devastate the lower income portion of Cayman’s tourism market.
Making matters more complicated is the fact that with Grand Cayman’s
already over-burdened infrastructure, the Government has indicated that it
would only want high-end resort hotels like the Four Seasons or the Mandarin
Oriental in the future.
Economy hotels are therefore unlikely to be built in the foreseeable
future, which means that there is no way to replace the 280 lower priced rooms
that will be lost if the Treasure Island Resort is converted to residential
housing.
Much has been said among tourism industry professionals about Cayman being
overpriced when compared to other Caribbean countries. With the United States
dollar valued at 20 percent less than the local currency, Cayman has a
built-in challenge to overcome in the value-for-money perception of tourists
as it is. Having fewer economy vacation rooms to offer will only add to the
problem.
Prior to the explosion of cruise ship arrivals, when the tourism philosophy
was quality over quantity and the affluent traveller was the niche market of
the Cayman Islands, maybe this country could have afforded to lose its
lower-priced hotel rooms.
However, the increasing volume of cruise ship passengers is slowly eroding
the vacation experience for the high-income stay-over visitor, many of whom
say that Cayman no longer offers the peace and quiet they were willing to pay
extra for in the past.
With that in mind, the lower income segment of the stay-over tourism market
becomes even more important as Cayman strives to regain the type of visitors
that really support the island-wide tourism economy.
For the Ritz-Carlton Group and Scotiabank, the purchase and sale of
Treasure Island represents a sound business decision. In the end, however, in
the face of strong objections and potentially detrimental effects to Cayman
Islands tourism, it is hoped that the final decision is made considering more
than just money and convenience.
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