San José, Costa Rica, since 1956

Once-Sleepy Honduran Island Goes Boom

ROATAN, Honduras – The offshore island of Roatan is poised to become the hottest new destination in the western Caribbean, now that two of the world’s largest cruiseship companies plan to build competing terminals here.

Tourists have long flocked to this island famous for its powdery white-sand beaches, world-class snorkeling and diving, and spectacular Caribbean sunsets. But now, cruiseship arrivals are expected to quadruple the number of annual passengers here from 250,000 last year to more than 1 million in 2008.

That’s because Miami-based Royal Caribbean has concluded a deal with the Honduran government to renovate the cruise-ship pier at Coxen Hole, administrative capital of the BayIslands, at a cost of $18 million over the life of the project.

John Tercek, vice-president of commercial development at Royal Caribbean, confirmed the development, which means that beginning this month, cruise visits to Roatan will jump from 10 ships a month to 30 or more.

Separately, Carnival Corp. plans to spend $50 million to develop a facility called MahoganyBay. Construction will start later this year and should be completed by summer 2009.

The cruise facility will be situated on 20 acres of Roatan waterfront and will consist of a two-berth cruise terminal capable of accommodating super post-Panamax vessels and up to 7,000 passengers daily.

Partnering with Carnival on the project is Jerry Hynds, a local business leader and a member of the Honduran Congress.He’s also the owner of Coral Cay, a resort property located adjacent to the planned port facility.

Within five years of operation, Mahogany Bay Roatan is expected to host 225 cruise ship calls and 500,000 passengers annually.

Adjacent to the facility will be a giant welcome center including retail shops, restaurants and bars, along with a 60-foot-high lighthouse, a lagoon with cascading waterfalls, and a nature trail. A transportation hub with the ability to accommodate taxis, rental cars and tour buses is also planned, along with a tour office for onshore excursions.

“Mahogany Bay Roatan is designed to build upon the success of our other projects by providing cruise-ship guests with an unparalleled landside experience, with modern facilities and a wide range of shore excursion choices, along with opportunities to explore this fascinating and beautiful island,” said Giora Israel, Carnival’s vicepresident of strategic planning.

How much cruise ships actually help local economies like Roatan’s is a matter of debate.

Claudia Marcela Delgado de Vélez, secretary of tourism for the Colombian archipelago of San Andrés, Providencia and Santa Catalina, said an increase in cruise-ship passenger visits doesn’t necessarily mean a boom for the local economy.

“From the experience we’ve had here, they don’t eat in restaurants, they take fruit and bottles of water with them, they buy crafts, emeralds, T-shirts and some other souvenirs, and nothing more,” she said. “You’d have to build an infrastructure to receive them, but really, they don’t have a strong economic impact.”

Roatan Island, a 38-mile-long spit of land located 40 miles north of Honduras in the Caribbean Sea, was settled in the late 17th century by the black Garifunas, who were forcibly sent there by the British from their native St. Vincent. In 1859, England granted Honduras sovereignty over Roatan and two smaller nearby islands, Utila and Guanaja, but for more than 130 years the BayIslands – as they’re collectively known – were virtually ignored.

Today Roatan is home to 65,000 people and represents the brightest hope for the Honduran tourism industry, accounting for more than 40% of the country’s $450 million in 2006 tourism revenues.

“Roatan is just now being found,” says Bruce Starr, a local real estate promoter and radio personality. “For years, it was a sleepy island known only by divers. And these divers wouldn’t tell their friends, because they wanted to keep Roatan a secret. But now that cruise ships started coming here about two and a half years ago, we will have tremendous tourism growth.”

Real estate ventures, guest houses, condominiums and timeshares are already sprouting all over this palm-fringed island, where Spanish is rarely heard and the bureaucracy of Tegucigalpa seems worlds away.

While real estate values continue to climb here, the island’s lack of tourism infrastructure, which currently is fewer than 1,300 hotel rooms, has limited tourism growth.

“That’s what’s keeping growth down right now,” Starr said. “We have a lot of condos being built, but we don’t have hotel rooms. For one reason or another, the bigger hotel chains are not establishing here.”

That might soon change.

Michael Wendling, manager of the Infinity Bay Spa & Beach Resort at WestBay, anticipates Roatan will get 1,500 new hotel rooms within the next two years. No other island in the Caribbean will even come close to doubling its hotel stock in such a short time frame.

“This is a very hospitable place to do business. People come here and find it to be a good business climate,” he said. “This is a kind of entry-level situation from the standpoint of development. Your land costs are far less here than anywhere else in the Caribbean.”

As a result, a one-bedroom, 830-squarefoot condo at InfinityBay goes for $380,000, while the two-bedroom, 1,400-sq-foot version costs $440,000 – much less than what the same property would cost in Aruba, the Bahamas or the Dominican Republic.

“Most of the people who buy our units aren’t here for a good portion of the year,” said Wendling, a Colorado native who’s lived on Roatan since 2002. “Rather, they buy it and let us rent it out for them.”

Wendling says the first 50 units of the 145-unit, $30 million InfinityBay project should be ready by this July; the rest of the project will be completed by mid-2008.

When finished, the four-star luxury property will boast swimming pools, a private dock and a world-class spa.

A recently enacted law making the BayIslands a duty-free area is expected to improve security by making it harder for visitors to fly or sail into Roatan without a return ticket – a measure aimed at controlling crime.

In addition, the government has invested $50 million in sanitation and sewage systems to keep the islands clean and make sure tourists come back.

“This island is unusual in that it is an English-speaking island in a Spanish-speaking country,” said Wendling. “The climate for North Americans is quite easy because of the ability to communicate. This is very important for everyone’s comfort level.”

Also helping Roatan is the fact that several major airlines – among them Continental, Delta and TACA International – now offer direct flights to the island from Newark, Houston, Miami and Atlanta, ensuring that tourists arrive by sea and air.


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