Ambergris Caye: A Case Study
Tourism Overview
Ambergris Caye, Belize generates over half of the tourism for this Caribbean nation just south of Cancun. It has established itself over the last several years as one of the top tourism destinations in the Caribbean due to the island’s proximity to major markets, English language, and ideal Caribbean climate. Ambergris Caye’s tourism industry has increased nearly 10% year over year. While Belize overall has been seeing an increase in tourism, it is Ambergris Caye that is driving the majority of the growth, generating more than $300 million, representing over half of the country’s $600 million yearly tourism revenues. Tourism accounts for over 36% of the country’s GDP, and when people think of tourism in Belize, they think of Ambergris Caye.
Long known as one of the top diving destinations in the world, Ambergris Caye’s proximity to the Belize Barrier Reef and many other marine sanctuaries draws visitors from around the globe. The island’s climate is similar to that of other Caribbean islands that have become famous for their ideal weather, with consistent daytime temperatures in the mid to high 80s, and pleasantly cooler nights. High season on Ambergris Caye lasts from November through April, peaking during the holidays. This coincides with the cold winters of Canada and much of the US, contributing to the island’s popularity as both a vacation and retirement destination. While Ambergris Caye’s diving and adventure opportunities are a major draw for visitors, the island’s laidback atmosphere, diverse restaurants and bars, and natural beauty expand its market significantly.
Ambergris Caye is easily accessed by planes arriving to Philip S.W. Goldson International Airport in Belize City followed by air and water taxi services onto the island. Flights between the mainland and the island are frequent and affordable, and provide visitors a unique visual experience flying along the barrier reef and the small palm-tree-studded cayes. Transportation on the island is simple due to its size, layout, and flat geography. A taxi can be taken to any destination on the in town for $5 US, while golf carts and bicycles are the most common forms of personal transportation. There are many rental services on the island, and the lack of automobile traffic adds to Ambergris Caye’s unique, relaxed aesthetic.
Belize’s government has moved strongly to capitalize on Ambergris Caye’s natural draw by supporting and promoting the tourism industry, as well as providing information and assistance to visitors. The Belize Tourism Board is very active, and is working with governments around the world to raise the country’s profile as a top tourism destination. These efforts have been showing results, as Ambergris Caye has been named the #1 Island in the World by several publications, and recently was awarded the honor of Top Destination in the entire region, topping Cancun and other historically dominant vacation destinations. Such honors have led Belize to experience year over year increases in airport arrivals of over 7%, and cruise arrivals in some months topping 20% gains over the previous year.
Hotel owners on Ambergris Caye have also been seeing a corresponding year over year increase in guests, and many tourism-related businesses are now serving the over 1,000,000 yearly visitors to the country. Major US companies have also taken notice of the country’s growing draw, with Southwest Airlines having completed its inaugural flight to Belize in October 2015 and permanent daily service. The Belize Tourism Board is already planning for increased cruise and overnight visitors in the coming months and years, and has stated that the new Southwest routes will provide important direct ties to major US markets.
Southwest’s strong expansion into Belize is a concrete example of Belize’s growing market share in the region. Another big development is the Prime Minister of Belize’s recent announcement that Ambergris Caye itself will be receiving an international airport of its own. This will be an unprecedented event for the island’s tourism industry, and is expected to have a profound effect on tourism arrivals and revenue.
Ambergris Caye, Belize is currently in the sweet spot and center of what is called the Popularity Curve, based on its popularity among US honeymooners. This statistic has been very accurate when compared to the overall maturity of a vacation rental market in a specific country. Ambergris Caye’s position in the middle of the curve gives the island some unique characteristics, such as maintaining a low cost of entry despite a consistent vacation rental market. This balance of appreciation property and strong rental potential is uncommon, and Belize’s rapid growth in tourism is likely to drive up prices in coming years to keep pace with demand.
The Case Study
The purpose of this document is to analyze the vacation rental market on Ambergris Caye, using official statistics provided by the Belize Tourism Board to evaluate the performance of hotels on the island. Overall rental performance is based on several factors, most importantly the Average Daily Rate (ADR) for a room and the Average Occupancy Rate. These in turn are affected by additional facilities such as conference rooms, dining options, and other amenities. ECI Development is conducting this analysis to examine how a large, full-service hotel from an internationally recognized brand will perform in Ambergris Caye’s rental market.
