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 […]
By Terry Hanton
February 1, 2010
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;
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.
Terry Hanton is a Chartered Accountant who specialises in consultancy services to the real estate and hospitality sectors. He is also a member and accredited valuer of the Barbados Estate Agents & Valuers Association (BEAVA), and previously held the position of Vice-President of this Organisation. Terry has over 10 years of experience in conducting valuations for residential and commercial properties. From 1984 to 1996, he was the Finance Director of St. James Beach Hotels Plc., a Barbados based hotel group which was listed on the London and Barbados exchanges.
In addition to his role at Property Consultancy Services Inc., he is the Director of Sales of Altman Real Estate, which has allowed him to maintain an intimate knowledge of the real estate market.
From 1998 to 2008 he was Project Director of the Sugar Hill Development which is a resort community located in Barbados, owned by David Lloyd and a syndicate of investors. The project is a tennis community consisting of 100 homes on 52 acres. The investors are nonexecutive, and Mr. Hanton was responsible for executing the project in its entirety. He is also a past Director of Needhams Point Holdings Ltd. as well as of several property development companies.
He has conducted feasibility studies, market research projects and business valuations and has also provided project management, and property investment advice and financial and accounting services to a broad range of clients.
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