Tobago captures interest of international resorts looking at Trinidad and Tobago

In 2016 news of a proposed Sandals International Resort for Tobago made headlines in the Caribbean, becoming the main talking point of Trinidad and Tobago’s tourism sector that year. The potential arrival of the international hotel chain, which already owns 24 vacation properties in seven Caribbean islands, promises to be a game changer for Tobago’s hotel industry. The landmark project could well be the catalyst needed for tourism development in the relatively untouched island.

The announcement comes after T&T experienced a 7% drop in visitor arrivals in 2016, with Tobago struggling especially to maintain occupancy rates. In May 2017 Chris James, president of Tobago’s Hotel Association, told local media that occupancy rates in the smaller sister isle had declined to 34%, compared to the Caribbean average of 66%, with hotels having had to drop rates to $154 compared to the average $228 charged in other Caribbean islands.

Landmark Project

According to Sandals, the reasons for choosing Tobago are many. “Very much like Turks and Caicos, Tobago is one of the last true exotic locations in the Caribbean. One of its best-kept secrets is its great variety of flora and fauna compared to the majority of other Caribbean islands,” Adam Stewart, deputy chairman and CEO of Sandals Resorts International, told OBG. “Geographically, T&T is in the south, placing it away from extreme weather activity, which is a major problem for holiday-makers and resorts. Finally, from an operational standpoint, at only $0.03 cents per KW, utility costs are far below the regional average, which is upwards of $0.30,” Steward added.

In early 2017 it was reported that the proposal involved the construction of two hotels, a 250-bed Sandals hotel and a 500-bed Sandals Beach Resort, as well as an associated golf course. The preferred location was reported to be No Man’s Land, a strip of pristine white-sand beach in south-west Tobago, accessible only by boat. The site forms part of the Bon Accord Lagoon at Golden Grove, Buccoo Estate, situated on 243 ha of land. This was, however, met with opposition from environmental groups, reportedly concerned over the impact of tourism development on the area. Later reports suggested the hotel chain was looking instead at the purchase of privately owned land in Buccoo adjoining but not in No Man’s Land.

Wide Impact

If it moves forward, the project is expected to have a wide-reaching impact on the local economy. According to Colm Imbert, T&T’s minister of finance, initial projections put the project’s combined yearly contribution to the economy at TT$500m ($74.7m). In addition to boosting Tobago’s hotel capacity by 75%, the project would also create an estimated 2000 jobs directly and purchase more than TT$100m ($14.9m) worth of local goods and services per year.

“Not only will resort tourism be a key source of foreign exchange, the linkages created will inject revenue directly into the economy. This includes creating employment for hundreds of locals including taxi drivers, farmers, fishermen, craftsmen and entertainers, further stimulating the economy,” Stewart told OBG. “A resort the size of what is proposed to be built in Tobago will result in over 100 local excursions per day, consume roughly 2000 eggs each day and involve the movement of over 200 local taxis on an arrival day. This takes place all year round because Sandals operates 365 days a year,” Stewart added. Tobago would also benefit from increased international visibility. “The presence of a high-profile resort will also lead to greater international exposure – particularly within the North American market – elevating the island’s profile and resulting in improved airlift and more arrivals,” Steward said.

However, in May 2017 Reuters reported that Sandals Resorts International was exploring strategic alternatives, including a potential sale of the company, casting a shadow of doubt over the future of the deal. While it remains unclear how this would affect the future of the Tobago resort, Sandal’s interest in the island remains a clear signal to investors of Tobago’s untapped potential.