Published On: Fri, Dec 21st, 2012

Whirlpools and maelstroms

Hyatt Curacao, Santa Barbara Beach Resort & Spa was destined to become the island’s leader and trend setter of the hospitality luxury destination market. Instead today, it has turned into the assassin of the entire industry. Unable to generate sufficient occupancy for the 350-dollar-a-night resort, cash flow pressures forced the brand new five star- luxury golf resort into a less-than- 100-dollars-a-night vacation bargain. Mostly lack of sufficient airlift was to blame, so the Hyatt resort had no choice but to fish in the same pond as all other island hotels and started to cannibalize ruthlessly from an already weak local home market.

Walk-ins on a little known Caribbean island, like Curacao, destined for an idyllically set resort at a remote Blue Lagoon location, are not very likely. Every luxury guest for any such holiday/golf spot will have to be flown in from far away. Adequate airlift supply requires long term planning of a constant stream of non-stop flights from the world’s centers of wealth and prosperity in North and South America, from New York City and Sao Paulo.

Local administrators and politicians may have tried their best efforts, but most was in all vain. Ministers and Deputies, no matter how well intended, either lacked the skills and business savvy, or the market muscle to make it happen. For more than 15 years, the Curacao hospitality industry, the largest employer on the island, has suffered from a chronically anemic air supply line.

Competition became even more fierce since the financial recession of 2008; capturing the interest of the tourist- customer turned more and more into a battle for life-and –death; Mexico’s Yucatan, Dominican Republic’s Punta Cana, newly constructed resorts Turks & Caicos, condominium market Aruba and St Maarten were way ahead and not about to give up their lead, no matter what.

Lack of airlift may have been the most imminent cause for Hyatt’s mishap on Curacao, but it was certainly not the only challenge. Ever since the resort opened its doors, it was forced to fly in expensive hotel staff from Asia. The hotel and its vast playgrounds required a minimum of 400 workers for upkeep. Well trained and skilled locals were simply not available in sufficient quantities, even after luring away some from existing hotels with lofty labor conditions.

The island has a nearly 60 year-old annual exodus tradition of, what has grown into a group of hundreds of the best and brightest, off to the Netherlands for higher education. Every year, Royal Dutch Airlines’ 747-400 jumbos carry Curacao’s brain-drain to Europe. It is no surprise that the population left behind shows a disproportionally large group of intellectually challenged, since less than 5% young and aspiring intellectuals ever return home after graduation.

“You better cut the pizza in four pieces because I'm not hungry enough to eat six,” may be a well known Yogi Berra quote, but a pizza does not get any bigger with more slices. Today’s Curacao fledgling hospitality industry is carved up in every smaller pieces of the pie. Many hotels are dragged down with the discounting-Hyatt- into a whirlpool that is becoming a downward spiraling maelstrom vortex. Within less than one year, the luxury Hyatt resort destination, the top of the line, turned the island hospitality industry and itself into a Jack-in-the-Box, price cutting, and substandard tourist nightmare.

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