THE head of Playa Hotels & Resorts Bruce D Wardinski is calling for the Jamaican Government to step in as the US State Department’s Travel Advisory notice continues to drag tourism demand heading into summer.

Wardinski, who is the chairman and CEO of the Virginia, US-based multinational hotel chain, said the Government of Jamaica must make a meaningful push to get the US Government to revise its travel advisory, citing that it has resulted in a meaningful jump in cancellations of bookings to the island.

He was addressing analysts on an earnings call about its latest financial statements.

“I’ve been in very close contact with Adam Stewart, who’s the head of Sandals, and we intend to push the Government to do something. Quite honestly, the Government has really been asleep at the switch and has not done anything proactive to address the situation. You know, Sandals has a much higher concentration in the country than even we do. So, we’re going to be pushing to see what we can do,” Wardinski added in his remarks.

Playa Hotels & Resorts operates five hotels in Jamaica under the Jewel, Hilton and Hyatt brands. They collectively earned the company US$219.90 million ($33.77 billion) or 25 per cent of Playa’s 2023 revenue.

To help shore up bookings as it faced cancellations Playa offered Jamaican residents a 35 per cent discount up to February 27. That was replaced by a another discount, though it was lowered to 20 per cent for bookings up to June 2024.

Sandals has seven resorts in its home country, Jamaica, and operates a total of 18 resorts across eight Caribbean countries.

Stewart, who is the executive chairman of the Sandals Resorts International and Jamaica Observer, noted in February that cancellations had spiked by as much as 45 per cent in the early days and that travel advisors helped in navigating that period.

He defended the safety of the resorts at the time, something the Playa chairman also noted as he pointed out that the resorts are nowhere near the areas covered under the advisory.

The country has been classified under level 3 or “reconsider travel” since early 2022, but the latest advisory has garnered a lot more attention. Playa has had to send concerned guests to Yucatán Peninsula and Pacific Coast in Mexico and Dominican Republic rather than have them outright cancel their trip.

Audrey Marks, Jamaica’s ambassador to the United States of America, had asked the State Department to rescind its updated level three advisory in early February.

Minister of Tourism Edmund Bartlett said recently in a post-Cabinet briefing that visitor arrivals weren’t negatively affected by travel advisories.

“I have volunteered to go with the Jamaican Ambassador here in the United States to go meet with the State Department… because it’s pretty nonsensical that you would come out with an updated travel advisory when nothing has changed,” the Playa executive told an analyst during the earnings call.

One way in which the impact is seen is in international air traffic arrivals. Sangster International Airport’s (SIA) passenger traffic in April was down 4.2 per cent year over year from 454,500 passengers to 435,00 passengers. Norman Manley International Airport (NMIA) saw a 7.6 per cent reduction from 146,600 passengers to 135,400 passengers in April. SIA processes 75 per cent of air passenger traffic into Jamaica, the majority whom are tourists entering the country for vacation.

SIA had been experiencing significant growth figures during the first quarter of 2024 as passenger traffic grew 7.9 per cent to 1.46 million passengers or an extra 106,400 passengers. SIA had 491,900 passengers in January, 442,500 passengers in February, and 522,900 passengers in March. Seventy-four per cent of Jamaica’s visitors during the first 11 months of 2023 were from the USA with Canada and the United Kingdom making up 12.5 per cent and 7.3 per cent, respectively.

Playa’s Jamaican segment saw total revenue increase 2.5 per cent to US$68.74 million with its owned resort EBITDA (earnings before interest, tax, depreciation and amortisation) almost the same this year as it was last year at US$27.08 million. The reduction in EBITDA was attributed to increases in labour and related expenses due to union negotiations and the increase in Jamaica’s minimum wage.

This was despite occupancy moving up from 82.5 per cent to 83.1 per cent, net package ADR (average daily rate) and net package RevPAR (revenue per available room) rising five per cent to US$524.92 and US$436.46, respectively.

The Playa CEO also admitted that while there were projections for RevPAR to be up in the middle single digits in 2024, it is now expected to be down in the mid-single digits.

“While we are only midway through the summer travel booking season, our pacing continues to remain strong outside of Jamaica. While the initial recovery of bookings into Jamaica following the travel advisory update was encouraging, demand took a meaningful step backward in March and has been choppy heading into the summer season. Based on pacing for the fourth quarter and the MICE revenue on the books for Q1 2025, we are hopeful that fundamentals normalise as we move past the summer season,” Wardinski explained in the initial press release.

Even Wisynco Group Chairman William Mahfood has expressed concern about the impact that the reduced tourism activity will have for direct and indirect beneficiaries of tourism. Hotels already have to be budgeting for an increase in minimum wage, security, and insurance costs which have jumped considerably over the last two years.

“The impact that’s going to have on tourism and bookings but, more importantly, the impact that has on trickling down to the general economy and consumption. If less people are coming here, less bus operators on the road, less taxi drivers, fewer vendors and cookshops, they would be feeling the effects of the tourism [shock]. It really is a concern and I know that the Government and a number of persons in the industry are looking at avenues to get this thing cleared up. Hopefully it will be resolved pretty soon,” Mahfood explained in a call with the Jamaica Observer on Tuesday.

Wisynco is a beverage manufacturer and major distributor of several fast-moving-consumer-goods (FMCG) in Jamaica.

Playa’s total revenue increased 10 per cent to US$300.64 million which also beat analyst expectations of US$282.76 million. Despite total expenses rising seven per cent to US$210.34 million, operating profit rose 17 per cent to US$90.30 million. Even with higher taxes and lower finance costs, net profit improved 27 per cent to US$54.34 million ($8.32 billion). Playa reported an earnings per share of US$0.40, which was not only above the US$0.27 in Q1 2023 but beat analyst expectations of US$0.33.

Playa’s adjusted EBITDA was up 15 per cent to US$113.47 million in Q1. Playa is expecting to report adjusted EBITDA of US$250 million to US$275 million in 2024.

Total assets are up to US$1.95 billion with property, plant and equipment at US$1.41 billion, and cash at US$285.34 million. Total liabilities and shareholder’s equity closed the quarter at US$1.36 billion and US$586.99 million, respectively. Playa spent US$9.95 million on capital expenditure during the quarter and US$30.53 million on its share buyback programme.

Playa’s share price closed Tuesday at US$9.24, down two per cent after earnings to leave it with a market capitalisation of US$1.28 billion.