Hospitality sector expected to gain momentum; good news for construction sector
Sygnus’s real estate Vice-president David Cummings shares his views
Even as the construction sector remains the most vibrant and resilient sector during the novel coronavirus pandemic, various segments of the real estate have seen mixed fortunes during the current boom.
The global real estate market saw a sharp downturn at the start of the pandemic as demand cratered due to the uncertainty at the time. After a year, the real estate space has seen an explosion in demand as materials and housing prices spike with the shift being experienced in different parts of the market. This is no different in Jamaica as nearly every street or space in the Corporate Area can be seen with bustling construction activity during the week.
“COVID-19 has impacted the various segments in different ways. It has been good for industrial and bad for
Jamaican investors are being encouraged to become global investors by taking advantage of a robust United States stock market in areas such as e-commerce and cloud computing, despite the hospitality in the short term, but this should spur some reinvestment. There has been a slowdown in commercial which should reverse later.
The Airbnb market got hit as hospitality slowed down which is expected to bounce back,” vice-president and head of Sygnus Real Estate and Project
Finance (SRF),“shared David Cummings, in an interview with the on the real estate sector’s performance during COVID-19.
Despite the devastating impact the pandemic has had on the global tourism, investment in the hospitality space has expanded as investors prepare for the recovery of the sector. Sandals Resorts International plans to add three new hotels to its Jamaican complement while other tourism investors have committed US$2 billion ($300 billion) for projects in the country over the next two years.
“It may take a few years to get there, but it will get there. So, if you want to do a major hospitality project, now is the time to get it started. Now is the time to invest! If you start the project now, in two to three years’ time, that bounce will be here in the 2024 – 2025 time frame when your new hotel is opening. If you wait until the bounce comes to start your project, you’ll miss it and
Business Observer your hotels will open when the bounce may be subject to other economic forces. The COVID-19 impact has been significant, but now is the time to invest if you want to catch the expected bounce,” stated Cummings on the sector’s prospects for the coming years.
Cummings further posited that there will be a greater diversification in the tourism product as persons look for unique experiences rather than large hotel stays they’ve been accustomed to in the past.
“A lot more people will be discerning on where they spend their money once the world has reopened. Whereas people were going to a thousand room hotel and be one of a few hundred people there, people will now look more for wellness, lifestyle and nature focused boutique locations. There will still be a market for the large hotels, but people will likely seek out more experiences compared to what they did before.”