In general terms the 2013 report card from lenders indicates that the worst appears to be over but continued patience is needed as recovery will be slow. There is no quick fix solution. Lenders believe it will take at least 2-3 years before there will be any meaningful growth in tourism in the Caribbean.
Leveraging off CHRIS’s theme of “Smooth Sailing Ahead?” KPMG asked survey participants to describe their outlook for the next 12 months using a sailing analogy. Their overwhelming forecast was that waters would be a “bit choppy” with the possibility of “rough seas”.
Clearly lenders are cautious and when they do return to the market it will be with a more conservative approach to managing risk.
The all important KPMG Caribbean Financier Confidence Barometer, however, gives cause for optimism. It rose for the fourth year in succession and lenders’ outlook for the Caribbean and Central American tourism over the next 12 months is more bullish than at any point since 2008.
Survey participants also indicate there are very few new troubled projects and that there are signs of recovery. The Survey is based on interviews both with lenders who are physically represented in the Caribbean and other, non Caribbean based, institutions who are lending into the region. The combined loans to the Caribbean hospitality sector of the lenders interviewed approximates US$3 billion.