The impact of American and Continental cutting back their flights to San Juan, Puerto Rico in September is already causing ripples all over the Caribbean!

My last posting addressed the impact that the American and Continental Airlines 40% cutbacks in flights to San Juan, Pureto Rico - the gateway to the Caribbean Islands!  Well, I have received feedback from the USVI Hotel Association, the Virgin Island Charter League, and several BIG developers - all of whom are VERY concerned about what is unfolding with transportation to the Caribbean.

The USVI Hotel Association has formed an Airlines Task Force this week to create ideas that can address the loss of the flights by American and Continental.  One of the radical suggestions I am making is to have Southwest  Airlines be considered to take over the abandoned flights to San Juan.  Southwest Airlines made a brilliant move several years ago that was almost laughed at by other airlines when they purchase oil futures at somewhere around $50 a barrel.  They are flying with fuel at a price that is almost three times less than other airlines.  You will also note that Southwest has not created a per baggage charge for bags that are checked.  Let’s have the brilliance of Southwest benefit by having them fly the record numbers of tourists who want to visit the Caribbean.

The charter yacht industry is moving into two separate camps at the moment - those who are going to wait and see how the transportation issue of getting people to the Caribbean is solved, and those who have put their charter yachts up for sale because they don’t believe that they will be able to continue a profitable business with the various factors impacting the Caribbean charter businesses - fuel costs and less flights to the Caribbean.

Some of the developers have been ambushed with this latest development of how do willing buyers of both whole ownership and fractional ownership get to the Caribbean.  Many of them have either land banked a significant amount of Caribbean real estate, or they have already broken ground and committed millions of dollars to build out the luxury resorts that have been approved for years.  There is a significant amount of concern by the Caribbean developers - cost of material caused by increased shipping costs, fuel costs for their equipment and vehicles, and increased costs of the land in the prime tourist areas they believe will be the next “it” spot in the Caribbean.

Again, there are island nations that are going to benefit from this upcoming “hurricane” because they are not relying on San Juan as their hub of getting people to their destinations.  Turks & Caicos, Belize, Cayman Islands, Bermuda, and The Bahamas have direct flights from many U.S. cities.  As the next few months unfold we may even see a new airline hub for the Caribbean evolve.  How about Miami, Dallas, Atlanta, New York, and Chicago - just a few that come to mind.  I promise you that the BIG interest in Caribbean real estate will cause solutions to be discovered!

We have more inquiries out to several of the government leaders in the Caribbean to get their input.  As soon as I receive their suggestions I will forward them to you for your input.  I am still looking at the glass half full, so let’s focus on this as a time of opportunity.  Change is not easy, but I believe we have entered into a significant era requiring change - in many aspects of our lives.  I welcome your opinions as to what is going on regarding access to the Caribbean.  Until next time….