Tourism is back – and with it new investment opportunities

Tourism is expected to rebound this year, and with more stayover visitors come new opportunities for investment.

It’s been a long two years without tourists in the Cayman Islands, and while the property market has remained strong – record breaking even – the return of tourists is set to open up new possibilities for property investors.

Prior to the pandemic, tourism was booming in Cayman. Although historically the islands have welcomed far more cruise ship visitors than air arrivals, in the decade preceding COVID-19, the number of stayover visitors increased year on year. 2019 set a new record, with over half a million visitors.

There is every reason to believe that, now that the islands are open for tourism again, that upward trend will return. Indeed, the number of new hotels and resorts that have come online, or are in the pipeline, is testament to the confidence that developers have in the continuing growth of Cayman’s stayover tourism product.

Compared to other Caribbean destinations, the Cayman Islands have a comparatively low number of hotel beds. According to the Economics & Statistics Office, in 2020 the Cayman Islands had a total of 2789 hotel beds and 4474 beds in apartments and guest houses, so there is plenty of room for growth in this sector.

When the Kimpton Seafire opened in 2016, it was the first resort to open in the Cayman Islands in a decade. Things are changing though, and since then, a number of other hotels and resorts, such as Palm Heights, the Hampton by Hilton and Black Urchin have followed, with others including the 357-room Grand Hyatt and the 282-room Hotel Indigo under construction.

This all points to tourism in the Cayman Islands going from strength to strength.

But what does this mean for property investors?

Tourists need accommodation, and so do those who work in tourism, so there is likely to be strong demand for both short- and long-term rental properties – both of which offer investors the possibility of earning an income in the short term term, and will most likely appreciate significantly over the long term. 

These are three property types to consider investing in, in the current climate.

Resort Residences –income-producing, fully-managed holiday homes

Several of these new resort developments include a collection of residences or suites, available for purchase. The new Mandarin Oriental will include 89 luxury residences, One|GT will include 175 suites and residences, and Kailani, a boutique wellness and business hotel, is offering a number of two- and three- bedroom penthouses for sale. Residential property of this calibre is in high demand, and resort residences are an ideal investment for some:  you own a fully managed vacation home that benefits from all the amenities of a luxury resort, but also have the option to enter your property into the rental pool and thereby earn a solid return on your investment.

Beachfront Condos and Villas – Use it and rent it when you’re away

Although the number of hotel rooms will grow significantly in the coming years, not all visitors are seeking a resort experience. Some prefer the privacy and autonomy that comes with renting a villa or condo instead. And that means that beachfront property, particularly along Seven Mile Beach, Cayman Kai and Rum Point will continue to see strong demand. Those who can acquire such properties will have the option of living in them, using them as vacation homes and/or offering them on the short-term rental market. New luxury developments such as Lacovia on Seven Mile Beach and Rum Point Club Residences in North Side offer owners the option of joining a managed rental scheme, allowing them to earn a significant income from their properties, as well as enjoying capital appreciation.

Long-term rental properties – a hassle-free, regular income

As tourism picks up, more staff will be needed on island to work in hotels, bars, restaurants, dive centres and other tourism-related services. Workers arriving from overseas will all need accommodation. So if a resort residence or a beachfront property is beyond your budget, consider investing in a townhouse or condo a little further from the beach. There is likely to be strong demand for long term rentals, and with leases running for a year, it’s a hands-off, hassle-free option that produces a stable, regular income.

If your priority is an income-producing property, we also have a number of listings here.

For expert advice on new and existing investment opportunities, don’t hesitate to contact us.