The luxury villa accommodation sector, which caters to the high-end segment of the visitor market, is showing signs of rebound – an indicator that the Barbados economy is in recovery mode after declining and posting a generally sluggish performance in recent years.
Presenting this upbeat assessment today, Managing Director and Chief Executive Officer of Republic Bank (Barbados) Limited, Ian De Souza, said available data suggests things can only improve.
In addition, the senior banker said with the advent of Sandals Resorts to the island and continued improvements in the United States economy, Barbados was well poised to start seeing improvements in economic conditions over the next two years.
De Souza was speaking at the inaugural Big Ideas Forum at the Cave Hill School of Business this morning, where he drew reference to the recent Central Bank quarterly report on the economy as well as projections by Government and the International Monetary Fund (IMF).
Singling out the international business and tourism sectors, De Souza expressed optimism about Barbados’ prospects, saying he expected activities in both sectors to increase.
“The point is that if the US and the UK economies do continue to perform well, then it is likely that Barbados would,” he said, adding that “with the kind of connection” that Sandals had to the US market “we could see the tourism sector growing”.
“Interestingly as well, we have on the private sector side of business in terms of growth, the construction activity in the tourism sector and there are signs of a pick-up . . . ,” the Republic Bank CEO said.
“There are things happening that speak to economic development. Right now, because Royal Westmoreland is a gated community, people don’t traffic through but as of today there are at least eight new houses constructed in Royal Westmoreland, the value of which has to be at least US$30 million,” added De Souza.
He drew this example to highlight the magnitude of luxury development that was taking place on the island. Last year, the operators of Royal Westmoreland told Barbados TODAY that it would be developing 31 lots with an initial investment of US$2 million. The 31 lots could rake in more than US$60 million in sales, plus millions more, when the houses and condos are constructed.
“So while there was a lull in villa sales and villa construction . . . construction in Royal Westmoreland is a hard indicator that there is some recovery in that sector. At Apes Hill, that was held back a little bit because of the lack of a clubhouse. Well, the good news with that is that they have a clubhouse in construction right now,” said De Souza, who owns a property in Royal Westmoreland.
He said as a result of speaking with someone in charge of sales at Apes Hill, he was told that “there is a pipeline of potential purchasers who are waiting for the clubhouse”.
“There is renewed interest in people going into Apes Hill. So that too not only will generate economic activity but it will also generate a tremendous amount of foreign exchange for the island because those properties are sold in [US] currency,” he said.
DeSouza pointed out that when sectors like tourism and international business did well, other sectors also tended to benefit. “So when you add all of these things together, there is a suggestion that Barbados could in fact, by 2015/2016/2017, be experiencing some turn around.”