November 2009 – From recent research
The vacation home market in Barbados has always been much misunderstood. Little research is available because there is no multiple listings service here and many transactions occur through the sale of shares in offshore special purpose vehicles. Such sales are not recorded here. As a result their impact on the economy is not measured, but we have always known it to be very significant.
Everyone can talk anecdotally about the importance of the emergence of Royal Westmoreland and Port St Charles in the 1990’s and numerous developments in the last ten years but little information has been available about the value to the economy of:
- Foreign currency brought in for development, sale, rental and operation of vacation homes owned by non-nationals;
- Tax contributions;
- Employment of labour in construction and operation of the homes;
- The much talked about, but never measured “trickle down”.
We have known for years about the migration of clients from hotel, to rented villas and then to home owners. We consider that home owners are perhaps the most important of all of Barbados tourists. Their stays are frequent and their investment considerable. The purchase of a home here is the greatest act of loyalty a visitor can make.
We have studied the vacation home market over the last few months and worked closely with the Central Bank and other agencies to get the clearest picture yet. Here are a few quick facts:
- There are over 2,000 expatriate owned vacation homes in Barbados and another 2,000 on the drawing board.
- Over 800 of these are in rental programs representing 2,400 bed rooms – approximately 25% of the total rental room stock on the island.
- Revenues from these units exceed BBD$110 million per annum, and expenditure by home owners is estimated at a further BBD$153 million. This all vital foreign exchange for the island.
- The vacation homes employ over 4,000 employees, about a quarter of the number the hotel sector employs.
- These homes contribute BBD$21 million per annum in annual land tax alone.
- In some years over BBD$450 million per year has come into the island for the development or for the purchase of vacation homes. This exceeds 10% of all foreign currency inflows to Barbados.
- These contributions are second only to the hotel sector, more than the much publicised offshore financial services sector.
Clearly vacation home owners may rest assured they have made a wise investment and are making a significant positive contribution to the Barbados economy.