Master Plan for Sustainable Tourism Development – Jamaica The Tourism Industry
chapter IV
4.2.2 Performance of the Accommodation Sector During the 1990s, the growth of room stock has exceeded the rate of growth of visitors. The result is falling occupancies for all types of accommodation. Measures of occupancy are available for hotels only. In 1992, average occupancy was over 60%. By 1996, it had fallen to 57.5%. Occupancy levels were recovering, reaching 58.5% in 2000. But the recovery is confined to large hotels. Smaller hotels continue to experience declining occupancy levels.
>> Occupancy Rates in Jamaica by Size of Hotel 1992, 1996 & 2000 Size of Hotel
1992 %
1996 %
2000 %
< 50 rooms
50.9
43.2
36.9
51 - 100 rooms
47.0
44.7
41.6
101 - 200 rooms
73.1
63.6
65.0
> 200 rooms
61.0
65.6
68.9
Total
60.1
57.5
58.5 Figure 4.5
Figure 4.5 shows that sharpest decline in occupancy rates was in small hotels under 50 rooms. Hotels under 100 room and medium to large hotels (101-200) rooms have also experienced a sharp fall in occupancy. The EP sector as a whole continues to suffer sharp reductions in occupancy and at 39.3%, occupancy levels in this part of the hotel industry are well below the required level for financial viability. Traditionally, occupancy levels in the all-inclusive hotels have been much higher than EP hotels. In 1992, they enjoyed occupancy rates of over 80% as compared with an occupancy of 52% in EP hotels. But the very rapid growth in all-inclusive rooms has not been matched by a commensurate increase in room nights sold. The result is that occupancy declined to 67% in 1999 and 70% in 2000, a good level for an EP hotel but not for all-inclusives which rely on high occupancy to drive profitability. Revenue per room actually fell over the 1992-1997 period. This is a cause for concern as costs have been rising. In fact, the all-inclusives suffered a sharper fall in revenue per room as a result of the sharp fall in occupancy. It is the fall in revenue per room that has eroded the profitability of the once very profitable all-inclusive sector. Figure 4.6
>> Comparison of Revenues per Room 1992 & 1997 Decline in Revenue Occupancy
Revenue per Room
Revenues per Room per Night Sold
Per room 1992 1997 Decline (%) (%) (%) (%)
1992
1997
(US$ 000p.a.)
(US$ 000p.a.)
All-inclusives
79.0
68.5
(13.3)
80.3
67.9
EP & Mixed
20.3
19.7
(3.1)
51.7
51.7
1992
1997 Increase/ Decrease
US$/Night
US$/Night
(12.4)
270.2
282.1
(+4.4)
(9.3)
131.2
144.9
(+10.4)
Source: An Economic Analysis, 1997
The figures for EP/mixed hotels hide the alarmingly low revenue per room in the EP sector. In 1997, the mixed hotels averaged revenues of US$46.5 thousand as against US$11.5 thousand for the EP hotels. It is doubtful whether any hotel could remain profitable on an average room revenue as low as US$11.5 thousand. It
COMMONWEALTH SECRETARIAT
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