2021 Market Sentiment Survey
In September 2021 we conducted our biennial Market Sentiment Survey to a broad cross section of clients. This is the third iteration of the Survey which, it should be said, seemed to be right on the money following the 2019 responses. The market in that year was easily the strongest in a ten-year history (both real estate and tourism). No surprise that after the almost rocket-ship trajectory in 2019 there has been a slight ‘simmering’ of expectations following world events leading up to 2021. Perhaps understandable given the trifecta of a pandemic, a hurricane and an ashfall event in Barbados.
Generally the market outlook remained positive with at least 2/3 of all those surveyed taking an optimistic view of the market today and looking forward. This is largely a function of a high level of confidence in the country’s leadership under the current administration. The Prime Minster has recently advised of a number of real estate projects which are due to start in earnest and this will likely further bolster market confidence.
When do you see the Barbados economy returning to pre COVID-19 levels?
Considering a drop in GDP of 18% in 2020, the current growth forecasts from the Central Bank would seem to indicate a return to pre-pandemic GDP is unlikely before 2024. GDP aside – all metrics are pointing to a record 2021/22 winter season for tourism arrivals, likely a combination of previously deferred travel and pent-up demand.
Brand & Reputation
How do you think Barbados‘ handling of the pandemic has impacted our reputation on the global stage?
The consensus is Barbados gets high marks for its management of the pandemic. The Prime Minster launched the Welcome Stamp in June 2020 to worldwide acclaim – this was marketing gold from a brand and reputation perspective. To date Barbados’ vaccination rate is also substantially better than many of our Caribbean neighbors, this is likely to be accretive to the Barbados proposition in the new tourism normal.
Do you think the Barbados Welcome Stamp will continue to be a meaningful addition to our tourism product over the longer term?
After a very successful launch in July 2020 – the most recent data on applications indicates a sharp drop-off in 2021 so the longer-term impact is yet to be seen. Not an apples compare due to the difference in average spend, but for context consider the fact that Barbados had 714,000 stay-over visitors in 2019 as compared with 1,987 approved Welcome Stamp applications for the 14-month period since launch. Certainly the perception is that the Welcome Stamp, while perhaps a niche addition to the tourism product, has the potential to be further developed.
Remote Working and the Office Market
What impact do you think remote working will have on the demand for office space rentals in the next few years?
Remote working arrangements are still in place in some form across most office buildings in Barbados. As of Q4 2021, while lease rates have generally returned to contract rates after an initial concessionary period in 2020, there has been little evidence of tenants reducing their office footprint as a result of the remote working trend. Where we have seen a reduction is in new entrants to the office market and with a considerable supply of available space it is likely office rents will soften in the coming months.