In spite of the double-digit growth of U.S. visitors in 2007 to the Caribbean the airlines are cutting back flights!

I am not an alarmist, nor do I ever look at my glass “half empty”.  But, there are a series of SERIOUS decisions being made by the major airlines serving the Caribbean!  The past year has seen on of the largest levels of visitors to the Caribbean in history - over 15 million people enjoying the most beautiful resorts and beaches in the world!!!  As I have written many times, the Caribbean is THE place to be for second, third and fourth homes - whether fractionals or full ownership real estate. 

During my 30+ years of traveling to the Caribbean I have NEVER thought about not being able to get there.  My only concern is planning my monthly and yearly schedules to fit in the hundreds of adventures I have enjoyed over the years - from the BVI to Trinadad/Tobago.  BUT, today, with the monumental impact the oil prices are having on all aspects of our lives, the ONLY method to get to the Caribbean - airlines, are cutting back or canceling their flights to Puerto Rico, the visitor’s hub to all the Caribbean islands.

Allen Castanet, the chairman of the Caribbean Tourism Organization said last week, “Billions of dollars of investment are being exposed, and thousands of jobs are being exposed.”  The weak link in access to the Caribbean is American Airlines.  They are in a mess and are struggling to stay in business.  Here is the rub…they currently control more that 60% of the passengers traveling through Puerto Rico as they connect to smaller airplanes servicing each of the Caribbean islands.  American Airlines has just announced that they are cutting back their daily flights to Puerto Rico this September from 93 to 51!!!  Holy Moly!!!  If you owned any tourist oriented business in the Caribbean, wouldn’t this news put shivers up your spine?  This is a BIG issue that will need to be addressed by anyone who has an interest in the tourist economy of this very special region of the world.

The flights that are being cut to Puerto Rico will also greatly impact the cruise line business.  San Juan is the city where most cruise line passengers meet their ships.  Over ten cruise lines use San Juan as their destination port.  Continental Airlines is another big player in flights to San Juan, and they are now expected to announce flight cuts because of the price of jet fuel and the soft American economy.   Last week Spirit Airlines has closed their Puerto Rico hub entirely!

Again, in past articles I have highlighted the amazing opportunities in the Dominican Republic -fractional and full ownership real estate opportunities.  Get this…from January through April of this year more than 407,000 tourists visited the DR - a 6% increase over the same period last year!  The question now is how will you get there?  Peter Muller who owns the Hotel Coyamar in Samana, Dominican Republic said, “This is just the beginning.  We’re going to reach a point where it’s no longer worth keeping the airport open.”  In spite of this latest blow to those wanting to travel to the Caribbean, solutions will be found.  Those travel solutions will cost a lot more, but they may be the only options we have.  One thought may be that Cancun becomes the airline hub to the Caribbean.  It would make traveling there much more difficult for those U.S. travelers from the East Coast, but it would be about the same travel time for those going to the Caribbean from the West Coast.  It would also immediately put the focus on Belize, Turks & Caicos, Bermuda, Bahamas, and the Cayman Islands as places to consider for your next Caribbean home.  I am absolutely sure viable solutions will be discovered.  But, for the short term, we will all need to make flight plans months in advance in order to make sure we get a seat.  Let me know your thoughts on these latest developments impacting traveling to the Caribbean.  Until next time…your Caribbean lifestyle detective is on duty.

Ilya Moshenskiy is one of the finest real estate photographers that I have met!

 I first met Ilya at the Luxury Real Estate conference in Del Mar, California several months ago.  He seemed to be everywhere during the conference taking photos of the participants and various events.  I final asked one of the Luxury Real Estate staff people who was this guy!  She smiled and said that he is the finest photographer they had found for capturing the essence of luxury real estate homes and estates.  I began some homework after the conference to see some examples of this work since we always need a top photographer’s services for the luxury properties we represent - both in the Caribbean and the San Francisco Bay Area.  Boy, was I impressed with what I discovered.

 My experience is that Ilya’s Photography sets one of the highest standards for quality in the industry with over 30 years of experience. Ilya is the principal photographer of Ilya’s Photography, and he has enjoyed a lifelong passion his work with the camera.  His reputation for excellence has spread both in the U.S. and internationally.  Ilya has shot luxury estates in France, Spain, Switzerland, Costa Rica, Miami, Chicago, the Seattle area, plus many other locations in the States and the world.  After checking out his work, my next question was, “How much does this type of quality photography cost for shooting a luxury home or estate?”  Well, I discovered that he has VERY competitive rates that are negotiated flat-rate prices for any project.  He is even willing to offer long-term budgeted photo-shoot contracts.  His flat-rate policy is greatly appreciated within our industry because it is THE rate no matter how much time it takes to complete the project.  Again, I don’t think you will find a better value for your marketing dollar if you decide on Ilya’s photo services.

 In further discussions with the staff at Luxury Real Estate their consensus was that Ilya consistently produces quality work and can make a home or an estate look amazing.  They said he has the ability to capture on digital film the best aspects of the luxury property.  As promised, I am always on the look out for the best professional services I can find, whether it is a photographer or a painter.  It takes a “village” to sell and buy a home - from the preparation of the marketing program to the signing of the closing documents, hiring a professional real estate company is critical.  Until next time….fair winds!

No matter what you may think, Caribbean home buyers are changing their buying patterns because of the OIL CRISIS!

I am a non-stop student as to what is happening within the local and global economies. I am reading, or I am on the internet everyday checking out the latest news. (I do have a booboo on my head in this photo from a sailing accident.) They impact all aspects of real estate - from the Thailand to the Caribbean. Luxury Fractional ownership continues to thrieve because of pricing and ease of management. One of the economists that I read each week is Bob Doll from BlackRock. They are a premier provider of global investment advisory services. Bob writes a weekly perspective as to his take on current economic events. Here are some of his thoughts last week that focus on the impact of oil prices on world economies. Some of you will ignore this article because of the word “economist” next to Mr. Doll’s name, but it does have some good stuff in it.

Bob Doll - BlackRock: ( Mr. Doll is also the Global Chief Executive Officer For Equities, and was the President and Chief Investment Officer of Merrill Lynch Investment Managers. BlackRock has $1.36 trillion in assets under management as of 3/30/08.)

The surge in oil prices comes at a bad time for the U.S. and world economies. Consumer spending is already stretched, the housing market remains weak nationally, and the employment picture continues to soften. High oil prices will no doubt detract from overall economic growth, but we would also note that aggressive monetary and fiscal stimuli should provide some offset. Our overall forecast for the economy calls for continued weak, but positive growth. The labor market remains under pressure, but unemployment claims have not increased as much as they typically would prior to a recession, and remain consistent with modestly positive economic growth levels.

To us, the critical oil-related issue is whether higher prices will trigger other inflationary problems, chiefly, accelerating wage growth. To date, there has been no evidence of that, which is one of the reasons we maintain our belief that inflation will behave itself. Headline inflation ( which includes energy and food prices ) continues to be boosted by surging commodity prices, yet core consumer inflation ( which excludes energy and food prices ) remains tame and labor costs have been easing. Looking ahead, we expect that the weak economy could cause inflation pressures to moderate and that headline numbers could come back down to core levels. The long-term case for higher oil prices is still intact. Rising demand in China and other developing markets such as India, coupled with shrinking global supply, means that the ear of cheap oil is, unfortunately, over. We do, however, continue to believe that oil is due for a near - term correction or consolidation.

Putting this all together, we believe that energy prices will correct at some point, that the the U.S. economy will slowly heat over the next 12 months and that inflation will eventually drift lower. Ironically, a muddling economy is probably the best environment for stocks at present. Slow growth will prevent inflation from becoming a problem, while also keeping the economy out of deflationary territory. Markets are benefiting from some other tailwinds as well. Earnings estimates, continue to fall for financial companies, but non-financial earnings remain sound. Valuations remain attractive, and there is still a great deal of cash on the side lines that should eventually move back into the world markets. Our view remains that the S&P 500 low of 1,270 (touched a couple of months ago) marked the bottom for the current cycle, but we also believe tha the S&P hit a temporary ceiling of 1,425 before last week (roughly corresponding to a Dow Jones level of 13,000). At some point, we believe the positive factors we described will allow markets to break through these levels, but predicting exactly when that will happen is, of course, an impossibility.

After a minute or two of reading Mr. Doll’s economic thoughts, remember that the Caribbean real estate markets are still very STRONG. We continue to see an increase in sales in the Fractional world. People are also making real estate purchase choices that are closer to their personal needs, like health care. Let me know your comments on the experience you are having with current economic conditions where you live. Until next time.

NEWS FLASH: The most beautifully planned development in Aruba is about to offer Fractionals!

Tierra del Sol - the only planned community in the Caribbean, with the Trent Jones champion golf course is launching a fractional project to go along with their beautiful development that includes homes, villas, condominiums, golf, spa & fitness, fine dining, and much more.  At the northwest tip of Aruba, has emerged a gorgeous 600 acre community offering a lifestyle to satisfy even the most discriminating of owners and world travelers. With today’s planned lifestyle, Tierra del Sol gives you the opportunity to purchase the home of your dreams just a chip shot away from the green, even if you are not an avid golfer.

This private community offers a remarkable experience within a meticulously planned and highly acclaimed environment. Homeowners and vacationers experience world-class amenities, including fine and casual dining, a full service spa, fitness and full care beauty salon, lighted tennis complex and unlimited greens at a championship golf course, displaying its own challenging version of Robert Trent Jones II - the only professional golf course on Aruba.

The tranquil setting provides a gracious lifestyle amid some of the most beautiful Caribbean views. Custom homes, villas, casitas and home sites accommodate a wide variety of expectations for your personal lifestyle. A homes at Tierra del Sol incorporate distinctive design features, tailored to the desert surroundings and complementing the natural beauty of the landscape, creating an inspiring and tranquil environment within this beautiful private community.

 Body &  Soul is a sanctuary amidst the finest displays of nature. Nourish your body, revitalize your mind and enhance your well being with a journey to vitality.  Pamper yourself from head to toe.  Their spa treatments are designed to ease tension and restore balance to your body and spirit. The spa’s professional staff offers a variety of therapies, including massages, body wraps, skin and body treatments, aromatherapies, hydrotherapy, manicure and pedicure and a newly opened full service hair salon.

 As you know, each time I get off a plane in the Caribbean, no matter what island it is,  the words that go through my brain are, “Welcome Home!”  That is the experience you will have when you arrive at Tierra del Sol.  For more information about pricing, contact me!  Until next time…fair winds.

No matter what the project is in the Caribbean, controversy sometimes surfaces…a summary of their article and a response from South Beach Belize representative - Tom McPeak

San Pedro Sun Article:  South Beach Belize

On May 17th, 2008, an email was sent out to various possible and interested investors around the world. The email carried the headline “Exclusive pre-construction opportunity in beautiful Belize” and was sent by Director for South Beach Belize, Jeff Pierce.

The release states that “This exciting project has earned tremendous response in the very few weeks that the web site has been up. A luxurious gated community featuring a Casino combined with a large hotel, multiple residential properties and Villas plus commercial and recreational venues. We have the support of the Prime Minister, Minister of Tourism, Mayor of San Pedro, the Area Representative and other Ministers and Cabinet Members to insure the success of South Beach Belize. We are located at the southern tip of the island (South Beach) only ten minutes by boat or fifteen minutes by road from downtown or the airport. We are starting construction of the first Villas and Condominiums in the next 30 days. The newly elected government of Belize is very in tuned with growth and expanding the economy. Several of the ministers have visited the site and we have the full support of the government for South Beach.”

Location

South Beach Belize is a proposed development located on the southern end of the Yucatan Peninsula on Ambergris Caye, approximately four miles south of San Pedro Town. According to Manager of the Hol Chan Marine Reserve Miguel Alamilla, South Beach Belize could have detrimental effects on the ecosystems surrounding the proposed site. Any development that proposes to build anything in close proximity to the reserve would need an EIA prior to proceeding. If the development is not properly monitored as per the specified regulation set by the Department of Environment (DoE) all four zones within the Hol Chan Marine Reserve are being placed in danger.

EIA, Clearance and Support

Prior to developing, Director Jeff Pierce was required to submit an Environmental Impact Assessment with the Department of Environment (DoE) which falls within the Ministry of Natural Resources. In an interview with Martin Alegria, Chief Executive Officer for DoE, no EIA had been submitted by Pierce, as of press time. On Thursday, May 15th, 2008, Alegria, along with other government agencies paid a visit to the site and verbally told Pierce to cease any and all work being carried out on the project.

So, with no EIA, no support, what will happen to South Beach Belize? Reliable sources informed this reporter that since the verbal “cease construction” stop order given to Pierce on Thursday was not followed through, a formal stop order will now be issued and Pierce may face a fine, as well. When asked if DoE had indeed issued him a verbal stop order, Pierce commented, “I don’t believe so.” He ended the telephone interview by stating that he was to meet with DoE on Thursday, as well as with Minister Heredia.

Tom McPeak’s Response ( Jim Walberg asked the U.S. representative of the South Beach Belize project for a response to this article.)

 All appropriate submittals for development at South Beach Belize are made as required.  As a developer in the Florida panhandle I can tell you that there is a continual stream of submissions before, during, and after the completion of multiple phases in a project.  The timing of some submissions is based on discussions with regulatory authorities, and may vary depending on those discussions.  If a developer cannot solve inevitable public and private challenges as they occur, he cannot develop.  Jeff Pierce is a successful developer in Belize, as measured by the beautiful and financially successful recent project, Reef Village. 

 In any development of this size, there is normally greater publicity (both positive and negative) in the beginning, with a normal diminishing as the project moves forward.  Generally, by the time there is no publicity at all, the prices have gone up and the best lots are sold. However, since the project has only recently been started, you may want to wait until the current matter is settled. 

I welcome your comments regarding the process of developing real estate in the Caribbean.  There are many complicated factors.  I want to always bring to you all sides of the issues facing Caribbean real estate development.  Until next time.