[For Educational/Research Purposes Only]

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Caymans millennium tourist season goes bust

By Rick Catlin

GEORGETOWN, Cayman Islands, Nov 15 (Reuters) - The Y2K bug is killing the millennium tourist season in the Cayman Islands and elsewhere in the Caribbean.

Just six months ago, Cayman tourism industry officials were saying the 1999 year-end holiday season was a sell-out for hotels and airlines serving the island.

Hotels and airlines doubled and tripled prices under the standard of ``supply and demand.'' Indeed, hotels and airlines in the Cayman Islands surveyed by Reuters in April reported all or nearly all rooms and seats for the Christmas-New Year's week were already reserved.

Now, however, executives are singing a different tune. Reservations have been canceled, hotels are discounting room rates, and airlines are dropping prices back to normal levels.

Tourism industry analyst Madigan Pratt of Trinity Communications in New York, who has done extensive work in the Caribbean, said the downturn is not confined to the Cayman Islands.

``The problem is everywhere,'' he said. ``People are just not traveling because of Y2K fears.''

The so-called Y2K glitch may block some computers from distinguishing 2000 from 1900 because of old shortcuts which recorded years with only two digits. Unless fixed, this could disrupt everything from airlines to health care to telephones.

Some resorts in the Caribbean have been discounting up to 40 percent to attract customers. Airlines have also begun to drop prices.

Liberty Go-Go Worldwide Tours, the largest U.S. wholesale tour operator to the Caribbean, also confirmed the slump in sales.

``Everything's just flat,'' said a spokesman for Liberty, a part of AMR Corp.'s (NYSE:AMR - news) American Airlines, adding that room-rate rollbacks had been tried at several Caribbean properties with little benefit.

Cayman Islands Hotel and Condominium President Doug Sears of the Hyatt Regency confirmed that the expected rush of tourists to Grand Cayman and other Caribbean destinations is not materializing as predicted.

``People suddenly began to fear the Y2K bug,'' Sears said. People also got turned off by the high prices everyone in the industry was charging.

``And many business people have said that they simply can't travel over the New Year holidays because they have to be at their business, just in case anything goes wrong with the computers on 1 January 2000,'' Sears observed.

These were the ``discretionary'' spenders that an upscale (expensive) destination such as the Cayman Islands usually relied upon at Christmas time to rent hotel rooms and purchase airlines seats at high season rates.

``The discretionary spenders who normally take a Cayman vacation are staying put,'' Sears said.

Either they've been told by their company to stand by for a computer meltdown, they have their own business to worry about, or ``they just don't want to be out of the country on January 1,'' Sears said.

Sears said hotels, which are normally 100 percent full for the Christmas-New Year's week, are now looking at 50 percent to 60 percent occupancy -- and are happy to get that.

News of the coming slump on Christmas stayover tourism comes as arrivals from the U.S. are already down 7 percent for the year.

``The millennium holiday season is looking like the worst season in 20 years for my business,'' said one hotel executive who asked not to be identified. ``It's a bust.''

So, why did the Grand Cayman sell-out dry up so quickly?

``Greed,'' said the same hotel executive. "We all thought the millennium was going to be a gold mine, so we doubled and tripled prices. But then people up north suddenly heard about Y2K.

``They also heard how everyone in the Caribbean was ripping them off ...,'' he said.

``Very few people are going to pay $1,200 for an airline ticket, $450 per night for a hotel room and $100 for a scuba dive, not to mention $100 for a meal, just to stay on Grand Cayman.''

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-- snooze button (alarmclock_2000@yahoo.com), November 16, 1999

Answers

Interesting, snooze, but nearly all the hotels are sold out -- at super-pricey "Millennium" prices -- in the most expensive resorts of the Big Island of Hawaii.

Perhaps they'll cancel last minute, but when a room deposit is over $500, you think twice before cancelling.

-- Sara Nealy (keithn@aloha.net), November 16, 1999.