The stalled construction of the Punta Palmera Condominium at the Cap Cana Resort is seen in Punta Cana, Dominican Republic, Nov. 15. The global financial crisis has halted work on this multimillion dollar project overlooking a turquoise sea, turning it into a ghost resort. It is among growing signs that the Caribbean is headed for tough times as construction workers and resort employees are laid off by the hundreds and anticipated peak season bookings are at a trickle.AP photo
A construction helmet and a shovel sit at the stalled construction site of the Punta Palmera Condominium at the Cap Cana Resort in Punta Cana, Dominican Republic.AP photo
PUNTA CANA, Dominican Republic — The ocean glows a milky turquoise. Tiny waves lap at the powder-beige sand, in no rush to reach the line of postcard-perfect palm trees.
Hundreds of luxury villas are positioned to take in the view, but there are no guests. There are no roofs either; neatly tied bundles of red tiles are stacked outside. The wind slams doors and rustles the yellowed newspaper taped to the windows.
The paralyzed work scene at the Cap Cana resort, a development including four luxury hotels, three golf courses and a mega-yacht marina, is a victim of the global financial crisis that has hit the Caribbean’s tourism industry especially hard.
Cap Cana fired 500 workers last month after Lehman Brothers declared bankruptcy and a $250 million loan fell through. Talks to re-negotiate a $100 million short-term loan collapsed last week, and more layoffs are expected.
“Our project has been affected by the economic tsunami that has paralyzed the global financial markets,” said Cap Cana President Ricardo Hazoury.
Construction is also paralyzed at the Ritz-Carlton Molasses Reef resort in secluded West Caicos, where 60 Chinese workers revolted last month to demand back wages. About 160 workers have been sent home to China, and it’s unclear when construction will resume at the hotel, marina and condominium project, which is three-quarters complete.
This month, the sprawling Atlantis resort in the Bahamas laid off about 800 workers, citing low occupancy rates. Baha Mar Resorts Ltd. laid off about 40 employees at its Sheraton Resort in the Bahamas and 40 more at the Wyndham Nassau Resort. The Bahamas Hotel Catering and Allied Workers Union has called a demonstration Thursday to demand government aid.
“I’ve been in the business 38 years. I have seen the impact of the Gulf War. I have seen the recession of the ’80s. Certainly Sept. 11,” said Robert Sands, senior vice president of external affairs at Baha Mar. “But nothing has been of a global nature, which makes the current financial situation we’re in much more worrisome.”
In Puerto Rico, the Caribe Hilton laid off more than 50 people this month because of rising costs and sluggish occupancy rates. The last time the hotel had to lay off workers was after the Sept. 11 attacks, General Manager Jose Campo said.
“What worries me is that this will last longer,” he said. “We are mounting an aggressive campaign, but the situation is what it is.”
Even the normally busy holiday season is expected to be relatively quiet.
“There is space available for the holiday season and beyond,” said Alec Sanguinetti, CEO of the Caribbean Hotel & Tourism Association. “This is often a time when hotels are sold out and vacationers are looking for any place that has availability.”
Workers are spending their days off looking for jobs outside the tourism industry. Others have already been sent home.
Victor Felipe Feliz, 24, has been feeding his two children on store credit since he lost his construction job at Cap Cana last month.
Cap Cana plans to fire another 1,000 workers in the coming months, according to a company official who spoke only on condition of anonymity because he wasn’t authorized to release the information. But Cap Cana President Ricardo Hazoury said he expects the project to go forward as the company outsources certain services.
Tourists willing to make last-minute travel arrangements will find some real bargains as hotels react to the soft period, according to Scott Berman, a tourism adviser for Pricewaterhouse Coopers in Miami.
“If you’re flexible and have time on your hands, you’re going to find some favorable deals this winter,” he said.
But cheaper rooms are often offset by expensive airfare, according to Renaldo Inesta, division manager for AAA in Puerto Rico. American Airlines, the main carrier to the island, has cut back flights by 44 percent, though other airlines are stepping in to reduce the overall drop to 14 percent.