Latin Finance - September/October 2009 - 63

Caribbean corporate finance No Holiday he global economic slowdown has taken a significant toll on the Caribbean’s main industry, tourism. All kinds of attractions are being halted as developers fail to find financing. Existing tourist draws, on the other hand, struggle to survive as they slash prices to attract business. “Several proposed Caribbean hotels have not been able to obtain the financing they need in order to proceed with construction,” says Atlanta-based PKF Hospitality Research in its 2009 Caribbean Trends in the Hotel Industry report. The Westin in St. Lucia is 50%-60% finished and the Westin Dominican Republic about 70% complete, notes PKF senior vice president Scott Smith. “There are probably a dozen projects that have been stopped,” Smith tells LatinFinance. In the past, many Caribbean mixed-use projects have relied on deposits received from the pre-sale of residential units to help finance the construction of the lodging component, he adds. However, this has changed. “Deposits from residential buyers are no longer sufficient to cover the financing of hotels. The business model is no longer viable,” says Smith, who adds that the aborted Westin projects had residential components. Data from New Hampshire-based hotel real estate research firm Lodging Econometrics shows that in the first quarter of 2009 there were 105 hotel projects with 22,136 rooms under development in the Caribbean, down 17.3% year-on-year. In the same quarter the previous year, data shows there were 127 projects with 30,713 rooms under development. T As of the second quarter of 2009, 19 projects with a total 3,320 rooms were cancelled or postponed in the Caribbean, Mexico and Central America, Lodging Econometrics says. It does not break down the numbers by region. “Notably, 12 of those projects were already under construction,” it adds, without disclosing names. Hotel projects are not the only amenities suffering. “In many of our islands we had acreage cleared to build championship signature golf courses. Credit stopped, investment stopped flowing and these cleared areas of land are right there with nothing being built,” Len Ishmael, director general of the Organization of Eastern Caribbean States (OECS), tells LatinFinance. OECS members are Antigua & Barbuda, Commonwealth of Dominica, Grenada, Montserrat, St. Kitts and Nevis, St. Lucia and St. Vincent and the Grenadines. Anguilla and the British Virgin Islands are associate members. Ishmael adds that she has seen resorts in OECS countries slash rates by as much as 50%. Smith agrees, saying he has seen rates go down between 30% and 50%. “The Four Seasons Great Exuma in the Bahamas had to shut down because of the downturn,” Smith adds. Cutting rates has meant the industry also faces a slump in revenue. PKF’s report indicates that between 2007 and 2008, hotel revenue in the region dropped 4.5% and profit fell 16.0% owing to the recession. “Given the poor market conditions observed this year, further profit deterioration is expected in 2009,” Smith says. He adds that 2009 may see the same downward trend as in 2008 or even worse and expects a slow recovery in 2010. -- Taína Rosa elections. Parliament consists of an elected House of Representatives (41 members) and a Senate (31 members). The Prime Minister is the Head of Government. The President is the Head of State. TRAVEL: Caribbean Airlines, Trinidad and Tobago’s national carrier flies to Port of Spain from North America, the UK and the Caribbean. Piarco, the international airport, is about 25 kilometers from Port of Spain. Other scheduled carriers include: American Airlines, Virgin Atlantic, Delta Airlines, Air Canada, Continental Airlines, British Airways, COPA Airlines, Suriname Airways, Bahamas Air and Liat. Tobago is serviced by Crowne Point International Airport, about ii km from Scarborough. CLIMATE: The islands are warm all year round, with a mean temperature ranging from 32C (90F) to 20C (73F). ECONOMY: GDP (2008p) – US $24,145, GDP growth (Nov 2008 p) – 10.7%* *Source:- Review of the Economy 2008 GENERAL INFORMATION: Trinidad and Tobago has one of the most dynamic economies in the Caribbean and dominates trade with its CARICOM partners by some 77 percent on average. The country’s main source of revenue comes from large oil and gas reserves, at the same time T&T possesses a large industrial and manufacturing sector and highly developed services sector. The main exports are oil and gas, petrochemicals, steel, food and beverages, financial services. CAPITAL CITY: Port of Spain (Trinidad), Scarborough (Tobago). COUNTRY NAME: Trinidad and Tobago, Republic of Trinidad and Tobago POPULATION: 1.3 Million: 40% East Indian descent; 40% African descent; 20% Mixed descent, plus European, Mediterranean and Chinese. The country has become famous for its cosmopolitan, friendly society. RELIGION: Roman Catholic 29%; Hindu 24%, Anglican 11%, Muslim 6%, Other 30%. AREA: 5,128 km2 (Trinidad 4,828 km2, Tobago 300 km2) LANGUAGE: English POLITICAL SYSTEM: Trinidad and Tobago is a democratic republic within the Commonwealth, holding regular, free T&T half page.indd 1 TIME ZONE: Eastern Standard Time = 1 (no time difference when North America is on daylight saving time during the summer), GMT-4 (during British Summer time – 5). CURRENCY: The current exchange rate for the TT dollar is as follows: US $1.00 - TT $6.3 Euro €1.00 - TT $10.00 corporate statement 8/27/09 10:58 AM September/October 2009 LatinFinance 63

Latin Finance - September/October 2009

Table of Contents for the Digital Edition of Latin Finance - September/October 2009