Testing, tourism, and the impact on real estate in the Cayman Islands

Buying & Selling, Featured, News

Since our borders opened on November 20, we have begun to welcome back visitors to the Cayman Islands. As was expected we are not seeing a huge influx of tourists due to the limited flights available at this time and the fact that people cannot travel to our islands with children without being required to quarantine. In addition, the uncertainty around our opening plan has impacted incoming visitors many of whom made alternative travel plans prior to our reopening announcement or were unable or unwilling to change their plans once our reopening was solidified.

But we would be amiss to think that the challenges of the numerous testing requirements not only before arrival but while on island are not impacting this as well. In this article, I want to explore the impact testing requirements and restrictions are having not only on visitors but the real estate market in the Cayman Islands.

Testing changes

On Saturday, December 11, the Cayman Islands government issued new regulations reducing the COVID-19 testing window for arriving passengers from 72 hours to no earlier than the day before departure. An approved test administered after midnight the day before travel is acceptable. Cayman is not alone in this. The US announced the same policy on December 6.

In addition to a PCR test, the government is now accepting antigen-detecting diagnostic, commonly referred to as a lateral flow test. It should be noted that only tests administered and certified by a health care or testing services provider who is authorised by the local government to provide testing services in the relevant jurisdiction will be accepted.

Another change is that in addition to the costs of the lateral flow tests required by inbound travellers on days 2, 5 and 10 at the cost of CI $25 each, the government no longer covers the costs of PCR testing for the purposes of travel which is CI $120.

Government has also updated the definition of “departures” to include the departure of any connecting flights or transit flights to the islands, where the layover flight is less than 12 hours.

These new rules went into effect on December 17 and apply to unvaccinated and vaccinated persons aged 5 and older and are measures being implemented to increase protection of the community and health system against the latest COVID-19 variant of concern, Omicron.

We are not alone

Changing rules and requirements with respect to travel and COVID-19 effect every country and every single person traveling. It’s very common for the rules to change during planning your trip to while you are in the middle of traveling. The emergence of the Omicron variant is a good example of how policies and requirements can change overnight.

All this testing will leave many people feeling alienated and even questioning if they should travel regardless of their destination. Those who do travel are looking at places where it’s easy to travel and where their limited vacation schedules aren’t interrupted by testing when they arrive.

If you take a walk on Seven Mile Beach, you will see that there are a very limited number of visitors on island. In fact, I would project that many visitors who are coming this year are here to visit family they haven’t seen in almost two years and/or to spend time in their second homes thus leaving many Cayman hotels quite empty.

The reality is the journey to travel has always been challenging and now there are even more hoops to jump through wherever you go. By presenting less hoops to jump through when visitors arrive as well as allowing unvaccinated children to visit will undoubtedly tip the favor to other locations.

In the Caribbean there are other countries that require less hoops to jump through when traveling to. For example, once granted entry, some countries do not require further COVID-19 tests. Some of these countries are also allowing unvaccinated children under the age of 16 which means that families can travel there unlike the Cayman Islands without having to quarantine.

The real results of testing

The reality is that the Omicron variant is already in the Cayman Islands and within our community. We are not alone in this. This new variant is already in approximately 89 countries worldwide and spreading rapidly.

With this new variant, which is highly transmittable, it would be unrealistic to think that cases in Cayman will not begin to increase which is happening on a global basis, but the reality is most of the COVID-19 cases in Cayman are spread within the community and not brought in by travellers.

As of writing this article, COVID cases have sharply declined in the Cayman Islands. For Friday, December 17th only 35 positive tests were recorded out of 720 PCR tests which is only 0.045%; down from up to 300-a-day at the height of the outbreak.[i] This is an 88% of a drop in cases reported. As of December 23rd, the total number of confirmed or potential cases of Omicron in Cayman is 54; 3 from travellers and 49 from the community.

Additionally, out of these 720 PCR tests reported on December 17th, which include travellers only 3 out of the 720 were travellers. That is 0.004% of all tests performed and 0.085% of the positive tests.

Visiting families

One of the biggest impacts on tourism is that fact that unvaccinated children cannot travel to the Cayman Islands as of today without having to quarantine.

The Cayman Compass published a story on November 30th which stressed that there is almost zero additional risk in allowing kids to travel to Cayman with a source indicating that many of our island’s current policies are out of touch with the reality on the ground.

Allowing vaccinated visitors to bring their unvaccinated children – with a pre-arrival PCR test for the entire family – was less risky than some of the current policies, for example allowing children to stay in class when a family member has tested positive if they can produce a negative lateral flow test.[ii]

It is almost impossible to market Cayman’s reopening and tell people, “we are open but you can’t bring your family”.[iii] While it is possible to travel with a 14-day quarantine period that is not practical for most visitors who have children in school and for working parents.

The impact on real estate in the Cayman Islands

As I will outline further in a future article, the real estate industry in the Cayman Islands has had a very good year even with all the challenges we are facing. As of December 22nd, we’ve had 1,008 properties sold equating to over US $1 billion this year. This is our industry’s biggest year in history.

When you travel through Grand Cayman, you will see new developments going up in almost every district including The Watermark on Seven Mile Beach and new re-developments that have already been announced including Aqua Bay and Lacovia both of Seven Mile Beach. Many of these developments are almost completely sold out before ground has even broken such as Catalina Bay at George Town Yacht Club.

Even with the rising costs of construction materials and the delay faced on a global basis with respect to supply chains, the construction industry in Cayman has been booming although I believe we will see a slowdown and less new developments starting due to the unknown costs, labor availability, manufacturing and the supply chains that have all been impacted. All of these factors affect the costs of developing which at this time are so hard to predict. It wouldn’t be unrealistic to think that developers and contractors may hold for a while. This is a much broader discussion that I will share over the next few weeks..

What we don’t know is how, if at all, the current travel restrictions, and the previous back peddling with respect to our opening will impact real estate in the next year or in the years to come. We do know that other Caribbean islands that have more lax requirements are seeing both a boom in tourism and real estate transactions at unprecedented levels.

Even though the requirements to travel to the Cayman Islands might be more challenging for now, people are still coming back. Since our border’s opening just over a month ago, incoming flights are full or near to full. After almost two years of living with COVID-19, it would be fair to say we are all frustrated not being able to travel. It’s important to remember when making a real estate investment not to make a rash decision in the short term for what is a long-term commitment.

From my perspective, and as I’ve mentioned several times previously, what made Cayman so special in the past will continue today and into the future. What our islands offer is hard to find in many other countries from our safety to our culinary offerings to the types of properties and investment opportunities we offer.

The people who both make up our islands as locals, residents and visitors are one of the most appealing aspects of the Cayman Islands. It’s what makes our country so unique compared to almost anywhere else in the region and maybe the world. It’s what we like to call Caymankind. Today, tomorrow and into the future this will not change.

[i] Cayman Compass, December 17, 2021
[ii] Cayman Compass, November 30, 2021
[iii] Cayman Compass, November 30, 2021