CORAL GABLES, Florida — Resilience has always been the name of the hotel game in Latin America and the Caribbean, driven by unpredictable and devastating hurricanes, shaky governments and currency fluctuations. Now that resiliency is serving the region well as it fortifies against the political and economic uncertainties brewing in the United States.
Hotel and travel analysts active in the CALA region know that the U.S. economy is closely tied to many local destinations, but they’re positive they can turn tides in their favor.
“The global economy is shifting, with evolving trade dynamics and, of course, geopolitical uncertainty,” said Eric Parrado, chief economist and economic counselor and general manager of the research department for Inter-American Development Bank. “But amid these challenges, Latin America and the Caribbean remain resilient and have opportunities."
Parrado acknowledged that “if you have a recession in the U.S., probably we will have a recession in CALA, so you have to be prepared and build buffers,” he said.
Speakers at the ALIS CALA conference this week near Miami underscored the importance of regional unity in the Caribbean and Latin America, including Mexico, in order to lessen dependence on the U.S., both in terms of travel demand and reliance on goods and services.
Mexico stands to feel the brunt of high tariffs the most in the region, Parrado said, but Colombia, Brazil and Costa Rica could potentially feel a heftier pinch as well.
But Parrado said all businesses in the region typically see a glass-half-full scenario and are strengthening ties within the region for sourcing building materials and investment.
“We see a movement toward investments in LatAm — Brazil, Mexico and Chile,” he said. “It’s a process of nearshoring, or ‘friendshoring,’” he said. “We have an opportunity to not only have higher integration (within the region) but also try to increase foreign direct investment.”
Guest diversification
While the region’s hotels and resorts need investment dollars and building materials, they also need guests, and the U.S. typically is the region’s largest feeder market.
But Americans definitely are not the only people visiting the region.
Vanessa Ledesma, CEO of the Caribbean Hotel & Tourism Association, said that while hotels in her association have noticed a slight slowdown in bookings from the U.S., “it’s nothing major.”
“We’ve seen some flight searches (from the U.S.) reduce a bit, but other markets are resurging, like Canada, within Latin America and Europe,” she said. “The Caribbean is a well-recognized brand, so there are more travelers around the world that have a better understanding of us.”
Fortifying regional airports and adding intra-regional flights are one way destinations in the CALA region are working toward building their version of domestic travel.
Ledesma said the Caribbean this year will have the same airlift as it did in 2025, with no indication by airlines they would cut flights.
Eileen Velez-Vega, strategic infrastructure director for engineering and development consultancy Kimley-Horn, said Puerto Rico is an example of a CALA destination that’s investing heavily in public-private partnerships to drive infrastructure development. The territory has established flight partnerships between Aerostar Airport Holdings, the privately held company that operates Luis Muñoz Marin International Airport, and airlines like Iberia Airlines to bring more flights to the territory. The company is doing similar promotional agreements with airlines to increase flights to Colombia and Costa Rica.
Puerto Rico is investing in runway expansion, island ferries and cruise port infrastructure along the coasts to keep facilitating easier regional travel.
Cruise sails along
While the cruise industry can be seen as a competitor to hotels and resorts on land in the CALA region, Carnival Corp.’s Marie McKenzie, senior vice president of government and destination affairs, said the two sectors are working together in the Caribbean to grow hand in hand.
Cruise demand and on-land stayover demand continues to grow year-over-year in the Caribbean and all parties, including local governments, need to work together to achieve sustainable demand, McKenzie said.
“We are constantly trying to work with governments to translate cruise guests to stayover guests,” she said. “Many people cruise to get a taste of a destination to see where they want to come back to stay. We don’t consider ourselves a competitor. We are an enhancement to delivering stayover guests.”
By the numbers
Hoteliers in the CALA region overall have generally succeeded in holding rate growth, delivering positive revenue per available room gains, said Patricia Boo, regional director of Latin America for STR.
Mexico’s border cities and large international destinations have lost some hotel occupancy, but Boo said domestic and interior markets are doing better. In the Caribbean, occupancy levels “have been a highlight,” she said.
“Across the board except for Ecuador, ADR in CALA is above pre-pandemic levels and continues to grow,” she said. “There’s also a huge effort to increase additional revenue and that increase is helping keep profitability margins.”
Brazil has been a highlight, Boo said, notching strong hotel performance numbers coming out of its summer.
Over the past 10 years, 40,000 new hotel rooms grew the inventory in the Caribbean, while occupancy levels have stayed mostly the same, indicating the region’s ability to absorb that new supply. Today, more than 10,000 rooms are under construction in the Caribbean, with nearly half in the Dominican Republic.
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