New hotel performance data from STR reveals a mixed picture for the Caribbean hospitality sector, with regional occupancy dipping while average daily rates (ADR) saw only marginal growth.
In May 2025, hotel occupancy across the Caribbean stood at 61.7 percent, reflecting a 5.3 percent drop compared to the same month in 2024. While the decline is notable, it varies significantly by island, with some destinations actually recording increases.
Despite lower occupancy, ADR nudged up by 0.3 percent, though this was well below April’s 6.4 percent year-over-year growth. Revenue per available room (RevPAR) also fell, down 5 percent, reversing a 1.5 percent gain from the prior month.
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Year-to-Date Trends Show Slight Rate Growth, Revenue Decline
For the first five months of 2025:
- Occupancy is down 3.4 percent compared to the same period in 2024
- Average daily rates are up 0.6 percent
- Revenue is down 5 percent
The data points to a cooling in regional hotel demand, with potential causes ranging from global economic pressures to competitive shifts in traveler preferences. However, several Caribbean destinations are outperforming the average, underlining the importance of smart marketing and differentiated offerings.
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Strategic Action Needed
With the summer travel season underway, destinations may need to intensify targeted promotional efforts to sustain visitor arrivals and spending. As the data suggests, those who invest in tailored experiences and visibility stand a better chance of weathering this softer phase.
The second half of the year will be pivotal in determining whether the current decline is a blip — or part of a broader trend.
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