Caribbean hotels hurt more by Zika fears than reality
Caribbean hotels hurt more by Zika fears than reality
16 JUNE 2016 8:29 AM

The Caribbean market has seen some performance declines related to concerns over the Zika virus, but hoteliers are taking necessary precautions to ensure safe stays and improve performance.

REPORT FROM THE CARIBBEAN—The Zika virus has become a hot topic among media outlets and health organizations in recent months, but Caribbean hoteliers still aren’t overly worried about the effect of the virus on business, sources said.

In February, hoteliers told HNN that fear of getting the Zika virus was not hurting demand at properties, but hotel performance numbers in the Caribbean were down in the first four months of 2016. Some have speculated that Zika fears among travelers were dragging down performance.

However, tourism executives in the region said multiple factors may be contributing to that dampened performance, including heightened media attention, which can create fear among travelers.

“It’s difficult to measure (Zika impact) because there are other factors that come into play in trying to determine the industry’s performance,” said Frank Comito, CEO and general director of the Caribbean Hotel and Tourism Association. “Some hoteliers have indicated that they had some cancellations or they received some indications of caution from guests, particularly around booking weddings, but on the other hand, others have said that there hasn’t been any significant impact (around Zika fears).”

Other factors that contributed to the negative impact on Caribbean performance in the first four months of the year included a weakened Canadian dollar and a blizzard that hit East Coast feeder markets to the region.

Milton Segarra, president and CEO of Meet Puerto Rico—a nonprofit that markets Puerto Rico for meetings and convention business—said the issue in his region is less of an actual problem and more a perceived one.

“The fact of the matter is, if you look at the numbers, Puerto Rico does not have a Zika problem,” he said. “The problem is the publicity Puerto Rico has received because of Zika.

“People thought that Puerto Rico was the epicenter for Zika, and the reality is that we’re not, and certainly Brazil is the epicenter.”

Bouncing back
Segarra said fears caused by Zika publicity has been a “significant situation for tourism in Puerto Rico,” resulting in a loss of bookings and cancellations in March, April and May. While business was down, Segarra said performance is starting to bounce back.

“Over the last 90 days, we had 35 group cancellations,” he said. “But we came back strong, we provided very accurate information, we were very transparent, very honest with our clients … and the fact of the matter is that (people) trust what Puerto Rico did as a destination.”

He said Meet Puerto Rico booked 57 new pieces of business for the same 90-day period in which cancellations occurred.

“These 57 new pieces of business represent—in terms of economic impact—we’re talking ($20.4 million) in new business for Puerto Rico,” he said. “In June, July and August, Meet Puerto Rico will host 42 groups, totaling close to 40,000 roomnights, which has an economic impact in our economy of $32 million.”

Addressing the issue
Caribbean hoteliers and health agencies are working together to take necessary precautions and provide information to travelers to ensure safe stays in the region, sources said.

“We were out of the gate on this early in January of this year,” Comito said. “We became aware late last year that there was this virus that was getting attention out of Brazil and that it had the potential to spread … we began conducting research, working collaboratively with the Caribbean Public Health Agency, and also working collaboratively with the (Caribbean Tourism Organization) on the public sector side of tourism.”

Comito said hotels in the region are providing guests with information on Zika during their stays and are also taking preventive measures by spraying for mosquitoes on property and in communities surrounding the hotel.

“All hotels and restaurants, the entire structure of the tourism industry, is following very strict protocols to make sure there are no (breeding) areas that could grow the mosquito,” Segarra said. “What we are doing is following the advice that the World Health Organization leaders are saying.”

Segarra and Comito said their organizations and others across the Caribbean are following procedures from the Centers for Disease Control, as well as local health organizations.

“(We’ve taken) a very proactive approach that’s not unlike what we had to do over the years around issues like Dengue fever and Chikungunya,” Comito said. “The industry, particularly in the Caribbean, is well-equipped and extremely knowledgeable of what it takes to put in the kinds of (virus) controls that are important.”

Comments from CEOs
Hotel CEOs have commented on the impact of Zika on first quarter earnings calls and at the NYU International Hospitality Industry Investment Conference.

Alex Zozaya, CEO of Apple Leisure Group, told HNN’s Jeff Higley in an interview at NYU that CDC warnings and media attention are hurting business.

“It’s hurting particularly the weddings and honeymoon markets, which is a significant part of the market,” he said. “In our case, that market is 5% below what it was last year.”

His take on the true impact of Zika was that it’s “not that bad,” he said.

During a “Coffee Talk” session at NYU, Marriott International President and CEO Arne Sorenson said it’s difficult for the company to see a direct connection between Zika virus impact and hotel development in Brazil.

“Zika is associated with Brazil, and Brazil has issues besides Zika,” he said. “I think the likelihood of new hotel construction starts broadly in Brazil are less today than when (Brazil’s) economy was robust and healthy.”

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