The cost of building a midscale hotel in the Caribbean can be higher than on the mainland U.S., but demand for affordable accommodations could make it worthwhile, even in the off-season. In the U.S., hotel companies are building their properties at $130 per square foot, Watson estimated. “In the Caribbean, it’s 38 percent higher for hard costs. You’re building at $180 per square foot.” A 56,000-square-foot building would cost around $10 million off the bat, not including the FF&E and shipping costs to bring materials to the island. At approximately $140,000 per key for a 100-guestroom property, a hotelier’s break-even is probably going to be about $175 per night at 50 percent occupancy, Watson calculated.

Win-Win