INTERNATIONAL REPORT—With a new stable government and tourism on the rebound, hotel development in the Central American country of Honduras is picking up where it left off in 2008.
Before the economic downturn, it seemed Honduras was on its way to becoming the next Costa Rica, with major hotel projects developing across multiple regions. That changed in 2009, when president Manuel Zelaya was overthrown, which, when paired with the effects of the world economic collapse, caused much of the hotel development in the country to come to a screeching halt. But now many of those early projects are coming into fruition.
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| Utopia Dive Village |
“In the subsequent 12 months after the onset of the political crisis July 2009 to June 2010, our B&B, La Casa de Cafe in Copan Ruinas, saw a reduction of 38% in gross income,” owner Howard Rosenzweig said. “However, given the severity of the circumstances and the intense barrage of negative—and much exaggerated—world media coverage of the event, we were expecting much worse. Now, 20 months after the ouster of Zelaya, tourism has continued to steadily rebound, although tourism entrance numbers to the ruins and gross income at our hotel is still not what it was in the pre-crisis period.
“At the time of the onset of the political crisis, we were approximately 3/4 completed with our new boutique hotel property, Terramaya,” Rosenzweig said. “We never considered stopping construction completely, although we were forced by the severe downturn in tourism to lay off most of our construction crew.”
“Upon opening four months ago, the property has been operating at approximately 30% occupancy, which given current tourism numbers and the fact that the property is brand new, is a very positive sign that one: tourism is on the rebound; two: that we are filling a previously unfulfilled niche in the Copan market for a mid-level boutique property,” Rosenzweig continued. “We have the advantage of getting an early start on marketing and promotion, especially in terms of guidebooks and TripAdvisor as the most effective means to get the word out regarding a new niche property.”
The Bay Islands, particularly the dive paradises of Roatán and Utila that draw significant numbers of tourists, were some of the hardest hit destinations. Before the economic crisis, several highly anticipated projects, such as a Nikki Beach resort and the Westin Mystic Harbour Resort and Spa, were announced on the Bay Island of Roatán. Both chains pulled out before construction had really begun. Yet with two new cruise terminals, tourism on the island has exploded. An estimated 100,000 passengers are expected to come to the island in 2011.
At the Los Micos Lagoon in Tela Bay, which was touted as the next Cancun, a 312-hectare (771-acre) project saw protests from indigenous groups and environmentalists is in its initial stages of development, causing long delays. The project is expected to bring a 4-star and a 5-star hotel, a 400-unit condominium complex and an 18-hole Gary Player championship golf course. A Conrad Hilton hotel and another Westin hotel were originally reported to fill the two slots, but both pulled out.
“If there are other opportunities in the right location with the right partners in Honduras, we would gladly evaluate new projects to enter the market,” said Laura Canepa, spokeswoman for Starwood Hotels & Resorts Latin America.
Currently, developers are negotiating with Hilton Worldwide and Hyatt Hotels Corporation to manage the properties. The first hotel and the golf course are expected to be complete by the end of 2012.
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| Terramaya |
“Honduras, as most of the countries in Central America, faced the economic crisis that affected our primary market, the (United States), so we concentrated our efforts in marketing within the region with our neighbors and stimulating the national tourism,” said Tatiana Siercke Nuñez, who handles international relations for the Honduran Institute of Tourism. “As the U.S. economy strengthens, we are working on our marketing plan to attract both American and European tourists to our country this year.”
“There were issues on the Pacific side of the mainland and there should have been warnings regarding traveling to Tegucigalpa,” said Angelika Lukacsy, President of Utila’s Utopia Dive Village. “The true reasons (the U.S. State Department) placed the warnings however, is that it was considered a coup. No one living in Honduras ever thought of this incident as a coup. The military at no time took over the government of Honduras. The democratically elected Congress voted and approved all actions and the interim president until the actual elections were held in November 2009.
“Tourism has come back slowly and steadily,” Lukacsy added. “Now, more folks are willing to come and are aware of the U.S. State Department’s change in policy regarding Honduras.”
