Cayman Islands-based Island Companies Ltd. is on a crusade to show the luxury world the value of the destination’s unique high net worth visitors. The sophisticated Caribbean island, known as a leading international financial center, hosts an enviable roster of both long-term tourists staying in such top-line 5-star hotels as The Ritz-Carlton, Grand Cayman with its $4,000+ a night suites or the elegant Kimpton Seafire Resort + Spa, Kimpton’s first property outside of the continental U.S.
While most tourism is currently on hiatus until the coronavirus pandemic passes, Cayman was on track to attract significant numbers of quality high net worth (HNW) individuals to live, work and invest, a trend island authorities expect to resurge once the island opens again. The Cayman Islands offer much more than just sun and sand, however.
According to a report by industry consultant Luxury Retail Partners, Cayman is ranked as the fifth largest international banking center, the second largest domicile for captive insurers and the largest domicile for investment funds. With a population of about 60,000 people, this British Overseas Territory is home to some 100,000 registered companies and more than 2,000 licensed professionals, accountants and lawyers, many of whom are expatriates with high-disposable incomes.
Island Companies Ltd., which is part of the Dart group that also owns the top-rated Ritz-Carlton and Kimpton Seafire, Camana Bay business and residential community and many other businesses across the island, is looking to connect the right luxury brands with this customer, according to Nick Jackson, General Manager of the duty and tax free retailer.
“Being part of Dart, we are looking to grow our portfolio to ensure that our guests have the right luxury brand options on island, particularly through our Island Jewellers stores located in these key hotels and at the town centre of Camana Bay,” explains Jackson.
When it comes to tourism, the Cayman Islands is a unique destination:
“We have top-notch hotel and leisure attractions, a newly-renovated airport with direct flights to London, New York, Dallas, Miami and many other North American destinations. We can boast of having the highest per-capita income in the Caribbean, not to mention that our Seven Mile Beach is considered one of the best in the region,” he says.
Grand Cayman’s hotel stats are equally impressive. According to the Luxury Retail Partners report, Cayman enjoyed the top hotel occupancy and highest hotel average daily rate (ADR) in the Caribbean in 2019 –with average rates that were three and a half times that of the Dominican Republic and more than 25% higher than second place St. Lucia. Moreover, stay-over tourists represent 80% of the visitor arrivals and the average stay-over visitor spends almost six days on the island. Add to this the fact that pre-COVID, the Ritz Carlton in Cayman had the highest ADR among all the Ritz properties in the Caribbean, and a picture emerges of the luxury potential of Cayman’s ultra-appealing clientele.
Several additional new ultra-luxury resorts are expected to open on Seven Mile Beach in the next few years, expanding the shopping base even further.
Between January and September of last year, the island welcomed a record 503,000 stay-over visitors, up more than 10% from the year before. Tourists spent some $700 million while they were visiting the island during that time, increasing more than 8%.
Island Companies sees a lot of retail potential from these stayover tourists and residents/ with the presence of the right high-end brands, coupled with first-class customer service.
Island Companies currently operates 13 retail locations spread across Cayman (including the locations now temporarily closed due to the pandemic): Island Jewellers, De Sunglass Man, Churchill’s Cigars, a Pandora franchise, a Swarovski store, Seafire Supply Co. (resort wear/sunglass/etc.) and La Boutique in the Ritz Carlton.
Island Companies’ first store opened on the island more than 40 years ago, and Dart took full ownership of the retail group in 2014. The company has been fine-tuning its merchandise assortments and properties for the past few years to better align with the changing demographics of the Cayman market, says Jackson.
“Island Companies is about growth in line with Dart’s philosophy. We are here as a long-term partner in Grand Cayman, we are not a fly by night company,” explains Jackson. “We are not looking to acquire 10 brands tomorrow. We are looking for the right partner, and the right partner is a brand or two with whom we mutually can connect to the customer, and connect from a luxury standpoint.”
Currently, Island Companies’ watch flagship is Hublot, which was added to the portfolio about 18 months ago.
“We had fantastic results with Hublot in FY 2019. This is a brand that has done exceptionally well for us. In jewelry, we have a large generic selection, and recognized brands like John Hardy. We were the number one retailer in the Caribbean for John Hardy by 2018.
“From a brand perspective, we are looking at how to grow in a measured way, improve our outreach and make our core base better. The idea is not to grow everywhere but to take that measured step. And when we do partner with a brand, we partner well. We make them #1.
“We do not want to have a portfolio of 20 watch brands. We would rather be very strong in a handful of luxury brands. By focusing on a few brands, we can make sure they have the right space, the correct assortment, and that our staff is well-versed on the brand and delivering the best service.”
Data driven models
Diego Stecchi, managing partner at Luxury Retail Partners, is consulting on the market development with Island Companies. He notes that the retailer is looking to focus on a select number of successful and innovative brands.
“We are concentrating on the consumer, researching to understand what the consumer wants, and then finding the right combination, the right mix of brands, that matches with the consumer’s need. The good thing is that Island Companies knows the consumer and the market. Using data from the hotels, the tourism associations and cruise companies, they have been able to identify clearly what this luxury consumer desires. We know what the High Net Worth Individual and the Ultra High Net Worth Individual coming into Cayman is looking for,” said Stecchi.
Adds Jackson: “We are partnering with Diego and his team to look at the international metrics of the tourism throughout the Caribbean, using extensive research. We have essentially worked backwards starting with the customer to us as opposed to us to the customer. We look at what our stores offer through the eyes of the guests, including such metrics as spending patterns, preferences, etc.
“This is especially important now. The traditional approach is changing all over the world. Island Companies is very open to look at fresh ideas with innovative concepts in order to create an environment that best connects with this consumer. It is about the brands and what the consumer likes in this HNW environment,” says Stecchi.
The shopping must be special and reflect the ambiance of the destination, he says.
“We cannot just replicate Madison Avenue in the Cayman Islands. We have to find a way to reach out to the tourist coming over to relax for vacation. The mix of brands that Island Companies presents for this customer might also be different than what other locations in the Caribbean, such as St. Bart or the Bahamas, are offering. It is important to find out from our research that in Cayman it is not necessarily best to open a huge Madison Avenue-like store, but to work with the brands to project the brand’s identity in the market,” he notes.
“Brands want to connect with the customer. The Island Companies team is working with its brands to create the best way to connect with the customer. Wherever feasible, we want to create a unique environment that goes beyond a shopping mall or retail store, one that appeals to our special customer base,” says Stecchi.
Jackson concludes: “We want brands to realize that we have access to their luxury customer. We have retail opportunities throughout the island and can connect them to the Ritz-Carlton customer, the Kimpton customer, and the luxury condo customers. And of course, it should not be lost the way that the Ritz-Carlton can elevate or work alongside a brand.”