Tourism arrivals are continuing on their upward crawl, according to latest arrival statistics released by the Department of Tourism.

Total air arrivals in January 2010 reached 25,006 – an increase of 1,500 on January 2009’s stats.

Of those, 19,562 came from the USA, 2,472 from Canada and 1,831 from Europe. 1,141 originated in other destinations.

The figure continued the upward trend that began in November 2009, based on direct year-on-year comparisons per month. It represents a 6.8 per cent increase of air arrivals.

The 25,000 mark was previously broken in 2008, 2004, 2000 and 2001. The latter was the highest-performing year of the decade with 28,953 air visitors.

Cruise numbers up

Cruise numbers also increased in January 2010 compared to the same time 12 months previously. This year, 165,378 came by cruise ship, an increase of nearly 4,000 on the 161,657 that arrived in January 2009. That’s an increase of 2.3 per cent.

Cruise arrivals in January were highest in 2004, 2006 and 2007, when over 200,000 visited the Island. 2007 was busiest with 224,880 tourists. This year’s arrival numbers are the third worst performance in the last 10 years, beating out 2001,2002 and last year.

Cruise arrival statistics are derived from on-board passengers rather than visitors who have disembarked.

Higher visitors leads to higher on-shore spend, said Alexandre Tabacoff, chief executive officer of Island Companies.

“The increase of cruise traffic in January 2010 had a very positive impact on Island Companies Ltd sales. We also measure our performance in dollars spent per passenger and noticed an improvement compare to the same period in 2009 thanks to our merchandising and marketing initiatives. This data is extremely encouraging and rewards ICL staff efforts.”

When the weather is inclement, cruise ships are diverted to Spotts Bay, which Mr. Tabacoff said had an inevitable effect on George Town businesses.

“When ships go to Spotts it negatively hurts our sales, and some actions should be taken to improve the tourist’s experience at Spotts, which would certainly impact positively on general sales,” he explained.

Hotel occupancy

Estimated hotel and apartment occupancy rates were also released by the Department of Tourism. Their figures indicated that January 2010 posted a 70.9 per cent occupancy figure for hotels and 45.5 per cent of apartment stock available. Apartments include all non-hotel properties including condos, villas, cottage colonies, guesthouses and bed and breakfasts.

This is the highest percentage of rooms estimated to have been filled since 1999, when 77.9 per cent of rooms were booked out. In January last year, 62.8 per cent of rooms were filled and 48.1 per cent of apartments were booked. The apartment occupancy figure is the fifth-best January performance in the last 10 years. 2008 performed the best with 52.5 per cent of apartments filled during January.

However, length of stay was down from 4.6 days in hotels in January 2009 to 4.3 days in January 2010. This is the shortest average estimated stay since the beginning of the statistics available in January 1998.

Apartment occupancy on the other hand was up to 7.3 days, an increase of 0.1 days compared to January 2009, and 0.3 days compared to 2008. Longest estimated apartment stays for January were in 2000 and 2001 when 7.9 days was the norm. More recently, people stayed in apartments for 7.7 days in 2007.

Melissa Ladley of The Ritz-Carlton, Grand Cayman said that the figures looked to be marginally-improving, partly due to the intense weather conditions elsewhere.

“While booking windows are still incredibly short, pickup is strong. It’s too early to state a trend, but this increased activity catalyzed by the bitter winter could be a harbinger for increased numbers for subsequent months in 2010,” she said.

Presentation

At the Caribbean Hotel Resort & Investment Summit this month in Miami, occupancy figures across the Caribbean were discussed during a presentation by Mark Lomanno, president of Smith Travel Research and STR Global.

He noted that occupancy during 2009 in the Cayman Islands was down by 5.8 per cent compared to 2008, with average daily rate costing visitors 8.8 per cent less. Average daily rate in Cayman Islands dollars was $228.20, according to STR figures.

Discounted room rates, said Mr. Lomanno, made budgets and forecasts impossible to manage and risked ‘cannibalising existing businesses and damage to brand’.

He noted that in a buoyant marketplace the tendency was for everyone to follow best market practices. However, when things were tough ‘everyone follows the first person to panic.’

Decisions therefore were in danger of being based on the actions of competitors rather than specific strategic initiatives and relevant revenue needs of properties.

“Discounting often doubles up the loss of occupancy and rate. Profitability is often overlooked and can be adversely affected by reductions. Markets take years to recover,” he warned.

He concluded that average daily rate was close to bottoming out, that room demand had already hit a low and was heading back up but the turnaround would be slow with only marginal improvement scheduled for 2010. Decline, he said, was global across all sectors so it was key to create value and maximise customer experiences through change in the mix.

Optimistic

Shomari Scott, acting director of Tourism, struck an optimistic note in the light of the figures.

“Given that air arrivals have increased by 6.8 per cent when comparing January 2010 to 2009, the subsequent increase in hotel occupancy from 62.8 in January 2009 to 70.9 [this year] is not unexpected, and is an indication that consumer confidence is slowly and cautiously returning.”

Mr. Scott said that the Department of Tourism also acknowledged that occupancy rate for apartments over the same period had registered a decrease.

He said that while his department was not directly responsible for the marketing of apartments and condo properties, they ‘continue to aggressively market the Cayman Islands as a destination to prospective travellers particularly in the US, UK  and Canada.’

He told the Caymanian Compass that the public-private Get Warm collaborative promotion had achieved its objective of driving visitors to the island over the winter season, and pointed to the forthcoming Summer Splash / Sponge Bob Square Pants promotion as an initiative that specifically targeted families.

“The Department is hopeful that the Summer Promotion will assist in driving visitors to the smaller properties and apartments as well as to hotels on the Island,” he added.