WILLEMSTAD, Curaçao — For the most part, luxury hoteliers in the Caribbean region won't be talking about new developments without mentioning residential opportunities in the same breath.
According to panelists at the 2025 Caribbean Hotel Investment Conference & Operations Summit discussing luxury mixed-use trends in the region, providing branded residences is a win-win scenario for owners who can see a faster return on investment with buyers coming in on the rental units. Additionally, those units get to be used as rental inventory, another perk of the arrangement.
"For mixed-use developments with residential, most of our projects are going to have that component," said Carlos Crovato, head of development, lifestyle at Hyatt Hotels Corp. "The market is asking for them and owners are very much interested in getting ... a faster return of their investment."
Crovato said the pandemic led to travelers seeking out this type of opportunity and the demand has not slowed down.
Pamela Vasquez, senior director of development, Latin America & Caribbean, at Hilton, said demand in the CALA region has grown 14%, and that's only going to continue.
"As long as there's demand for residential, there's going to be residential product," she said.
A rising need to leverage capital
In the luxury space, being able to use branded residences as leverage in the development process has been extremely important, said Hugo Mirabal, director, feasibility and development, at Marriott International. Mirabal said nine of the 10 projects he's working on will include branded residences.
Offering branded residences is more than just a bonus at this point, said Vijesh Patel, director of development at Six Senses. Patel said he's developing deals that are $3 million-plus a key, so leveraging that capital is critical.
"I think capital is difficult, so I think branded residences is a requirement, not an ominous cherry on top, especially in the ultra-luxury world with construction costs and labor costs at the highest they've ever been," he said. "I mean, you're not only just subsidizing your development costs — that's the only way people are going to get their returns quite honestly."
Another demand driver for branded residences is more space for multiple generations traveling together — a big trend for the region, Vasquez said.
"I think generational travelers are going to continue, where you have families traveling together, that's going to continue as a trend," Vasquez said. "That's going to require these homes of three bedrooms where you have grandparents and kids and everybody together. So I see that in the next 10 years continuing to grow."
Standing out in luxury
Hotel developers in the Caribbean are aware that wealth is shifting among the generations of travelers, and attracting younger consumers is vital to planning for the future. The panelists agreed that hotels need to be able to show that they have soul, are connected to the community and factor in sustainability in order to stand out.
Hoteliers can approach each of those goals individually, or all together. Mirabal gave the example of the recently opened W Punta Cana in the Dominican Republic where he said the development team worked around the site to preserve the existing environment and avoided putting in too much grass or concrete.
"It's building a community, and that's something that the younger generation appreciates more and more," Mirabal said.
Entering into an ecosystem collaboratively is something younger travelers expect out of their hotels.
"If (these travelers) understand that a project — branded or not branded — destroyed or was antagonistic to the community and to the space, they would not go there," Crovato said. "They would choose another place where the brand or the hotel in hand with the developer improved the community."
Vasquez pointed out that not entering into a community collaboratively could result in delays of months or even years by local organizations opposing the new construction.
And while some may call eco-friendly sustainability "fluff," Patel said it's important to remember it drives profit. Sourcing locally cuts down on shipping costs and using sustainable building methods makes a more resilient property.
"We have to understand that now, especially in this region, you have to build the properties that are climate change-proof," Crovato said. "We know that hurricanes are bigger, they're faster, they pass categories from one to five in a day, and then they reach you very quickly. So we need to start thinking about how to not only be sustainable, but also be prepared for against the destruction."
These efforts also translate into providing authentic experiences that reflect the destination and also contribute to being able to tell a story to guests.
The biggest new trend affecting experiences, Patel said, is personalization, and hoteliers need to invest in bringing that to their portfolio.
"I think the guest experience is going to be hyper-personalized, and I think every brand can capitalize on that," he said. "The Caribbean is honestly going to be one of the best places in the world to hyper-personalize that experience, because each island is so unique."