Investors Cruise to Roatan's Real Estate Market
Cruise port construction near Honduras should boost Roatán property values
Thursday, January 10, 2008
For real estate in Roatán, a small island 40 miles north of Honduras in the Caribbean Sea, the ships are coming in and bringing valuable commercial activity with them. Specifically, the large-scale construction of two ports by major cruise lines Carnival and Royal Caribbean is expected to further boost the island’s rapidly growing tourist industry and consequently enhance growth in Roatán’s property values.
Cruise ship arrivals are expected to quadruple from 250,000 in 2006 to more than one million in 2008, according to an article published by LatinFinance last March. This increase will be in large part because of new ports that are able to accommodate a larger number of cruise trips and passengers.
Carnival announced its agreement with the Honduran government to build and operate a cruise terminal at Dixon’s Cove, located on the southeast coast of the island, in a March 2007 press release. Construction of the terminal, “Mahogany Bay—Roatán,” is a $50 million project.
A pier under construction on the coast of Roatan
Situated on 20 acres of Roatán waterfront, Mahogany Bay will consist of a two-berth cruise terminal capable of accommodating up to 7,000 passengers daily, the press release said.
Work is expected to begin early in 2008 and be completed by Oct. 1, 2009, according to an article published last month in Bay Islands Voice, a magazine covering news in Roatán, Utila and Guanaja. The Carnival press release, however, had originally stated that construction would begin last fall with an estimated completion date in July 2008. Carnival could not be reached for comment regarding the status of the project.
Not far from Dixon Cove is a cruise ship port at Coxen Hole, the administrative capital of the Bay Islands in the southwest region of Roatán, where Royal Caribbean Cruise Lines agreed to take charge of significant renovations. The project is at an estimated cost of $18 million, according to LatinFinance.
Although construction was originally slated to begin last October, progress has been troubled by permit delays and a halt last July, according to Bay Islands Voice.
Investors should bear in mind that while major cruise port construction and expansion appears imminent, it is not clear when construction will commence, and the actual amount of time until completion seems even less certain.
Roatán accounted for more than 40 percent of Honduras' $450 million in tourism revenue in 2006, according to an article published by LatinFinance last March. That’s not bad for a landmass less than one-hundredth of the size of its mainland counterpart.
In addition to cruise ports, resorts and public infrastructure are experiencing rapid development on the island. According to LatinFinance, the Honduran government invested $50 million last year in sanitation and sewage systems to keep the islands clean. Because of high tourist traffic from the U.S., English is widely spoken throughout the island.
Roatán was named one of NuWire’s Top 5 Places to Buy Caribbean Real Estate last summer for its growing tourist industry and relative affordability compared to other Caribbean islands such as Aruba and the Dominican Republic. However, investors who dream of owning their own piece of tropical paradise may wish to act in a timely manner, as Roatán’s real estate market is poised for takeoff.