Report
Caribbean & Central America Market Report 2023
Horwath HTL Dominican Republic and Crowe Costa Rica have released the latest market report for the Caribbean and Central America.
The Caribbean and Central America combined make up around 92 million inhabitants and a GDP of approximately US$1.08 trillion. With a contribution of an estimated 15% and 12%, both regions have the highest share of the tourism sector to total GDP.
In 2022, the Caribbean was the third most successful of all Worldwide regions or subregions to match 2019 visitor arrivals and even topped this during the first half of 2023, while Central America has experienced one of the fastest sector growths among American regions in the last 20 years.
Geographical and Demographic Overview
The Caribbean includes 31 inhabited, independent countries and various dependencies, with diverse populations and touristic offerings. Central America comprises Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica, Belize, and Panama, with a combined population of around 45 million. The region is known for its natural beauty and eco-tourism projects.
Historic Arrivals and Market Performance
- Caribbean Tourist Arrivals (2004-2022): The Caribbean saw robust growth in tourist arrivals from 21.7 million in 2004 to 31.5 million in 2019. The COVID-19 pandemic caused a significant decline in 2020, but the region started recovering in 2021, with a 32% increase in 2022 compared to 2021.
- Central American Tourist Arrivals (2004-2022): Central America experienced similar growth, from 5.7 million in 2004 to 12.4 million in 2019. The region saw a 69.9% decrease in 2020 due to the pandemic but rebounded by 62.1% in 2022.
Air Arrivals and Market Dynamics
- Major Caribbean Markets: In 2022, the Dominican Republic, Puerto Rico, and the US Virgin Islands exceeded their 2019 arrival numbers. Aruba and Jamaica were close to matching 2019 levels.
- Other Caribbean Countries: Curacao, Bonaire, and Turks & Caicos also surpassed 2019 arrival numbers in 2022, demonstrating a strong recovery.
Tourism Impact on Local Economies
Tourism is a crucial economic driver for both regions, significantly contributing to GDP and employment. In the Caribbean, tourism’s contribution to GDP is notably high, with Aruba and the Bahamas leading in terms of percentage. In Central America, Belize, Panama, and Costa Rica are the top tourism income earners, with Belize having the highest contribution to GDP from tourism.
Hotel Industry Performance
- Caribbean: The Caribbean hotel market saw a steady increase in ADR and RevPAR post-pandemic. By 2023, ADR reached an all-time high, indicating strong industry recovery.
- Central America: Central America’s hotel market also rebounded, surpassing pre-pandemic ADR and RevPAR figures in 2022. New resort developments, particularly in coastal areas, are expected to boost the market further.
Outlook
- Caribbean: The Caribbean is on track for a record year in 2023, led by the Dominican Republic. The region benefits from high international visibility and a reputation as a prime holiday destination. Emerging trends include luxury hotel products, eco-tourism resorts, and sustainable practices.
- Central America: The tourism sector is still emerging, with significant potential for growth. Costa Rica, Panama, and Belize are leading the market, while El Salvador, Guatemala, Honduras, and Nicaragua have opportunities to attract more air and stay-over visitors. The region’s eco-tourism projects and cultural tourism offerings are expected to drive future growth.
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