Josimar Scott/Reporter

Bruce Wardinski, chairman and CEO of Playa Hotels & Resorts, says that the performance of the hotel management company’s operation in Jamaica surpassed expectations despite the US Government warning Americans against travelling to the island.

He is, however, ambivalent in his outlook on bookings in the local market as the summer season approaches.

“Fundamental momentum exceeded our expectations across all of our geographic segments in the first quarter, despite significant headwinds from the timing of Easter in 2024 and the Jamaican travel advisory update from the US State Department,” the CEO said in a release on Playa’s first quarter 2024 results.

“While we are only midway through the summer travel booking season, our pacing continues to remain strong outside of Jamaica. It must be said that while the initial recovery of bookings into Jamaica following the travel advisory update was encouraging,  the demand took a meaningful step backward in March and has been choppy heading into the summer season,” he added.

In January, the US Government issued a level three travel advisory warning its citizens to “reconsider travel” to Jamaica as the country recorded 65 murders in that month. The State Department further stressed that “violent crimes, such as home invasions, armed robberies, sexual assaults, and homicides, are common. Sexual assaults occur frequently, including at all-inclusive resorts.”

It added that Jamaican police “often do not respond effectively to serious criminal incidents.” The advisory said that hospitals and ambulances are not always reliable and some private institutions may require payment up front.

“The homicide rate reported by the Government of Jamaica has for several years been among the highest in the Western Hemisphere,” the State Department noted.

For the January to March period, Playa recorded 1,428 bookings with an occupancy rate of 83.1 per cent. Net revenue grew by 2.6 per cent or by US$1.7 million when compared to the same period in 2023.

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 in Jamaica.

In the company’s earnings call yesterday, Playa’s chairman pointed out that Jamaica’s occupancy for the first quarter had matched 2019 levels.

He said that while the travel advisory does not apply to Playa’s properties, but more so “the major metropolitan areas in other regions of the country”, the coverage by American media was “significantly greater” than expected.

“Bookings in Jamaica saw a rapid improvement as we move through February, giving us a sense of optimism that the impact would be fairly short-lived, but demand for the summer season did not continue to improve, leading to a significantly higher negative impact than we previously anticipated,” Wardinski shared.

“Bulk of the impact experienced so far in Jamaica has been for Q2 and Q3, with revenue pacing down mid-teens, while our fourth quarter pacing is holding up much better with a low-single-digit decline,” he continued.

The Jamaican market’s performance was also affected by disruption in construction due to inflation, resulting in the company predicting tighter margins for the year.

“The drag from construction disruption and a weaker demand in Jamaica are likely most pronounced in the second and third quarter and hopefully, improve somewhat in the fourth quarter,” was the chairman’s forecast.

In his outlook, the chairman said the company projects that occupancy will be up low-single-digit percentage points for the total portfolio due to the travel advisory having a continuing negative impact on demand in Jamaica.

However, Wardinski said he will be working with Sandals Resorts International executive chairman Adam Stewart to lobby the Jamaican Government for a more “proactive” response.

“Quite honestly, the Government [has] really been asleep at the switch and has not done anything proactive to address the situation. You know, Sandals has a much higher concentration in the country than even we do. So we’re going to be pushing to see what we can do,” he told shareholders.

The Playa chairman will also have dialogue with the US State Department alongside the Jamaican ambassador to that country.