Playa blames virus protocols for lag in Jamaica revenue
Playa Hotels & Resorts, which operates hotels in Jamaica and across the region, continues to report a lag in business in this market, even during the apex of the winter tourist season, which is usually the busiest period for hotels.
The company cites additional virus testing and health protocols for the lag, saying that tourists have been seeking out holiday destinations with fewer restrictions.
“Unfortunately, we have seen no material improvement in Jamaica as we believe the country’s entry requirements weighed on visitation growth and led to a very modest increase in airlift during the fourth quarter as compared to the third quarter,” said Playa Chairman and CEO Brian Wardinski in an investor call following the release of the company’s results.
In Jamaica, Playa owns and manages Hyatt Zilara Rose Hall, Hyatt Ziva Rose Hall, Hilton Rose Hall Resort & Spa, Jewel Grande Montego Bay Resort & Spa, and Jewel Paradise Cove Beach Resort & Spa. Its rooms were less than a third full at the end of 2020 but had nearly two times more guests than in the summer.
The company reported occupancy levels of 28.5 per cent in the December quarter, up from 16.6 per cent in September. In the period before the pandemic, the December 2019 quarter, Playa’s Jamaican rooms were 78 per cent full.
The hotel operator generated US$48 million from Jamaica in the December 2020 quarter, which were two-thirds lower than the levels achieved in the year-prior period.
The chain said, however, that its holds sufficient cash to allow it to survive the fallout from the pandemic.
Across all its markets, which includes the Dominican Republic, Mexico, and Jamaica, Playa recorded a net loss of US$74 million for the December quarter and a net loss of US$262 million for its full year ending December.
Looking forward, Playa said that it started to see some additional airlift into Montego Bay starting in October, but the increases were modest relative to the potential capacity of the local tourism market.
“As we said before, we would like to see COVID testing requirements relaxed or removed entirely to increase international demand for Jamaica,” said Chief Financial Officer Ryan Hymel on the investor call.
“And so far, we’ve not seen any meaningful change in demand on the positive side as the international return restrictions have not levelled the attractiveness of the destination. Currently, revenue on the books for Jamaica are lagging, both 2019 and 2020,” he said.
Hymel added that Jamaica had been shaping up to be Playa’s “strongest market”, but its momentum stalled once COVID testing requirements were put into place in early July.
“Though locally sourced business has helped the occupancies outside of our Hyatts in this market, it has weighed heavily on our average daily rate and mix of rooms sold,” he said.