Invasion of the Boomer Snatchers
We've been talking about it for years:  How the wave of retiring Baby Boomers - the first of us hit 60 in 2006 - will flood the warmer climes with bazillions of young codgers waving cash and looking for a bit of tropical real estate.  I pooh-poohed that for years, but it's finally, actually happening. 

In Belize, they've just about bought up the affordable seafront land, and now they're plopping down deposits in developments like Progresso Heights and Cerros Sands in Corozal, Sanctuary Bay near Hopkins, Coco Plum on the Placencia peninsula, and others.   Whether they'll end up staying and building or buying, or, faced with the frustrations of daily life in a developing country, head back to St. Petersburg with tails between their legs, it's probably too soon to tell.

Yet, maybe this time things are different.  If the Boomers really end up coming to Belize en masse, enough of them will stick it out, and the developers will end up doing okay at last.

Tourism Folks Singing the Blues
“September and October are always bad, but it’s been a long time since it was this bad.” 

 “We had a record June, but then things went south in July – it wasn’t this bad after the hurricanes.” 

 “Everything looked great … until July and August.”

“August, September and October were really slow. November hasn’t picked up much.”

Tourism operators have various explanations:

The bandit incidents in Cayo of course had a major impact there, but they spilled over into other areas, including Placencia.  First-timers to Belize don’t really have a good grasp of Belize geography, so if they hear of crime in one area they may decide to cancel or postpone a trip to anywhere in the country.  One lodge owner said they lost US$150,000 in cancellations, so they were ready and willing to contribute to the fund to get the Guatemalans responsible out of Guate and into a Belizean jail.

The U.S. Department of State travel advisory that remains in effect clearly is hurting business.  You can see the advisory, posted July 18, at http://travel.state.gov/travel/cis_pa_tw/cis/cis_1055.html. 

I’m told that a meeting set up with the U.S. embassy in Belize to discuss this didn’t come off because representatives from the Belize Tourism Board didn’t show up.

Others thought that the election in the U.S. might have kept some Americans at home. Some ascribed the problem to lack of European tourists -- Europeans hate to have to go through the U.S. to get to their final destination. 

Still others think the residual fear of terrorist attacks in the U.S. and Britain has an impact on international travel.  Some think that rate increases at hotels and the general increase in prices in Belize, in part due to the GST, play a role.  A few said they thought the increase in the number of condos in Placencia and on Ambergris Caye was hurting hotel and restaurant business, as owners now stay in their condos and prepare meals there.

The good news:  Bookings for the Christmas season seem excellent everywhere.  Most hotels report good, though not record, bookings for the rest of the high season.

As always, some hotels are doing well even as others struggle.  When I was in Placencia in mid-November, Turtle Inn was 100% booked and the larger Robert’s Grove was about 75% full.  Victoria House in San Pedro was bustling with guests, especially in the gorgeous new villas section, and places like Banana Beach in San Pedro also were doing a good business.  At the more modest end of the scale, Martha’s Guesthouse in San Ignacio said its new annex was already 100% booked for January through April.

Is the Condo Bubble About to Burst?
Anyone who returns to Placencia or San Pedro after being away for a year or so will be amazed by the number of condominiums going up.

The Placencia peninsula, as I reported in my last Rambles, has some 1,500 units either under construction or planned.  I don’t expect all of the Placencia condos to actually get built, but from the talk you hear San Pedro is going to get dozens of more projects in the next year or two.  Hopkins is also getting a wave of new condos.  Even Caye Caulker is getting a couple.

Developers are doing business plans and projections on the backs of envelopes, and the excavators and dump trucks are running full out.

To me, it looks like a classic bubble that’s about to burst.  Already, I’m hearing about condo projects that are hitting up their owners for extra bucks, special assessments and higher monthly maintenance fees just to keep things afloat. 

I think many of the condos will sell, and some have been pre-sold, but not many owners plan to live in Belize full time.  Most will use the units just a few weeks a year.  The owners are buying on the expectations of getting cash from the management company for their share of rental fees from the rental pool. 

But unless Belize gets a lot more tourist boots on the beach, these condos are going stay empty much of the time, and the owners can take the rental income projections with a grain of salt.

I’m also hearing about some serious softening in prices.  Units that were going to sell for six hundred grand are now available for $395K, and when you look at the listings in the windows of real estate offices you’ll see a lot of markdowns.  Yet, in my op, they’re still overpriced on any rational ROI basis, though in the long run the owners may get price appreciation, especially on beachfront property.
 

Mark my words:  Look for a fire sale on condos in the next couple of years.  And if you’re buying a condo, don’t book on paying the mortgage with income from the rental pool for a while.

Price/Value Issues 
Belize has a reputation as the most expensive destination in Central America, but you can still find some excellent values in Belize, both in travel and in real estate.  In fact, in many cases it is actually cheaper to travel or live in Belize – at a level of health, hygiene and amenities that are acceptable to most Americans or Canadians – than in some other countries in the region.  Sure, you can travel or live cheaper in Nicaragua or Guatemala than in Belize, but you’re living or traveling on a different level than in Belize. 

Corozal Town, for instance, remains a good value.  You can get a hotel room in a new or completely renovated hotel for 40 to 60 bucks, complete with a new bed, A/C and cable TV.  You can get a delicious dinner for under US$10.  Real estate is also still affordably priced.  You can rent a nice house for US$250 to $600 a month, and buy a building lot for around US$15,000 to $25,000 or an attractive, modern house for US$100,000 to $200,000.

Cayo, Toledo and Caye Caulker in many ways offer similar value for the money. 

However, I’m seeing more hotels, resorts and lodges that are raising their rates by 20% or 30% or 40% or more.  Places that use to cost US$150 are now $300, and some are getting up into stratospheric rate territory, US$400 to $800 a night.  Simple breakfasts at hotels often are US$10 or $12, dinners $30 or more. The average tour is now approaching $100 or more per person, and many are twice that.  Hotels try to hit you up for US$10 to $15 for internet access, I was at a modest restaurant in San Pedro, the kind where you sit on stools, the other night and the dinner special was BZ$65.  In a grocery, a fifth of One Barrel was US$12 and Belikin was near US$10 for six bottles.  A car rental costs US$90 a day, plus 10% tax and various other charges, and gas is still near $5 a gallon. 

Many visitors can pay those rates, but it’s also the case that the vast majority of Americans and Canadians, and presumably Europeans as well, don’t pay those kinds of prices back home.  When they travel, they stay at places like Fairfield Inn or Hampton Inn, where a big, recently refurbished room with king bed, cable, free broadband internet, free local calls, free included breakfast runs around US$100, and no service charge.  They eat at restaurants where they might pay US$10 to $14 for a full dinner, or at McDonald’s where you can get a double cheeseburger and fries for US$2 from the value menu.  Beer is under four bucks a six-pack.  A car rental is usually US$30 to $50 a day, and gas is US$2.10.

If Belize can offer a truly special experience, visitors may be willing to pay extra for it.  Frankly, though, I’m getting concerned that too many places are trying to increase revenues simply by raising rates without offering a better product.  If the experience isn’t there, and the value isn’t there, Belize is going to lose business.

Likewise, developers are asking the U.S. prices for condos and building lots.  They may get a few suckers to buy at these prices, but anybody who spends time in Belize doing due diligence will figure out that US$200 to $400 a square foot for a condo or house borders on the obscene.

Taxopan?
The U.S. may have its “tax-and-spend liberals,” but Belize seems to specialize in grab-and-tax politicos. New taxes are blooming in Belize like bougainvillea on a wall. Businesses that are suspected of making a little money are being audited right and left by the tax guys.  Maybe the name of Belize's capital should be changed to Taxopan City. 

The Goods and Services Tax (GST) of 10% impacts just about everybody. The GST went into effect in mid-2006. 

I happened to be in Canada when the GST was implemented there in the 1990s, and the impact on business was considerable, because consumers saw the price of restaurant meals, store merchandise and nearly every item they bought suddenly increased.  With the GST, the selling price of most items includes the tax, rather than being added on as a sales tax at the cash register, so buyers perceive it as a price increase. 

More Motos
Used to be, I rarely saw a motorcycle on the roads in Belize.  Now, they're fairly common, especially around Belize City and on the main, paved roads.  I guess the price of gas, which reached more than US$5 a gallon before it fell back a bit recently, is driving the interest in motorcycles.

Everybody's a Real Estate Agent
Every time I look around, there are more real estate agents in Belize.  It's rare for a week to go by without somebody opening a new office.  Some of them are gringos trying to make a buck while waiting for a real job.  But a lot of the real estate agents are Belizeans.  Do they actually sell anything?  I don't know.  Some do, I assume.  There’s even a new Multiple Listing Service, of sorts, in Belize.  I take the mushrooming growth of real estate offices as a bad sign.  It's a leading indicator of a real estate bust.

Internet Everywhere
Belize has been wired for a long time, but now the internet is ubiquitous in Belize.  Cybercafés seemingly are on every corner.  It's the rare hotel that doesn't offer internet access in some fashion, whether wireless or via a DSL Ethernet network or broadband satellite.  Even the smallest places offer connections.  For example, D'Nest Inn in Belize City with just three rooms and Coral House Inn in Punta Gorda, with four, both offer free and speedy wireless (and at D'Nest Inn you can also plug into their DSL Ethernet hub).  BTL is even promoting its WiFi Hot Spot at the international airport (there's a fee, of course).

Blowing Cold Air
A few years ago, hotels started putting in swimming pools.  Now, everybody is putting in air conditioning.  Even the jungle lodges. Maruba and Jaguar Paw have had A/C for years.  Now, even fairly rustic lodges such as Lamanai Outpost Lodge offer cold air in at least some rooms.  Mopan River Resort has added A/C in all its units.  Air conditioning has long been a staple in the upmarket hotels in San Pedro, Belize City and Placencia.  But, now, even budget hotels routinely have A/C.

Anger Management
It seems to me that Belize is becoming an angrier place than it used to be.  Belize has a reputation for being laid back, accepting, a no-shoes, no-shirt, no-problem kind of place.  In some ways, I fear, that's changing.  The guy robbing a store in Belize City gets the money and then blows away the shopkeeper, for no reason.  Drivers blow their horns to warn other drivers to get moving.  And have you seen the terrible blow offs and rants that go on over the internet?  Post a question on a Belize bulletin board and you risk that half a dozen irate, but anonymous, boarders jump on the poster, accusing you of every ecological, economic, and anti-Belizean crime on the books.
 

Things I Thought I'd Never See in Belize

• Bridge Over the River Channel to North Ambergris Caye
• Belize City Cleaned Up
• Broadband Internet in the Bush
• Traffic Jams in San Pedro
• Million Dollar (US dollars) Homes on Ambergris Caye
• Upmarket Restaurants and a Resort with a Swimming Pool on Caye Caulker
• Real Estate Subdivisions in Sarteneja
• A Night on the Town in San Pedro with Dinner and Drinks, US$200 for Two
• Four Cruise Ships Berthed Off Belize City at One Time

Best Destinations to Stretch Your Dollars:  Caye Caulker; Tobacco Caye; Corozal Town; Placencia Village

Most-for-Your-Money Budget Lodging:  The Trek Stop, Cayo; Hotel de la Fuente, Orange Walk Town; Casa Blanca Guest House, San Ignacio;  Martha's Guest House, San Ignacio;  Hotel Aguada, Santa Elena, Cayo;  Lydia’s Guest House, Placencia

Top Jungle Lodges:  Chan Chich Lodge, Gallon Jug, Northern Belize; The Lodge at Chaa Creek, Cayo; Blancaneaux Lodge, Mountain Pine Ridge; Hidden Valley Inn, Mountain Pine Ridge;  Ek’Tun Lodge, Cayo

Top Jungle Lodges for Not a Ton of Money:  Black Rock Lodge, Cayo; Pook's Hill Lodge, Belmopan;  The Lodge at Big Falls, Toledo;  Five Sisters, Mountain Pine Ridge;  duPlooy’s, Cayo

Greenest Eco-Lodges:  duPlooy's Lodge, Cayo; Mama Noots, near Dangriga;  Black Rock Lodge, Cayo

Most Romantic Hotels:  Turtle Inn, Placencia; Blancaneaux Lodge, Mountain Pine Ridge; Victoria House, Ambergris Caye; Portofino, North Ambergris Caye

Most Romantic Restaurants:  Rojo Lounge, North Ambergris Caye; Capricorn, North Ambergris Caye; Harbour View, Belize City; Rendezvous, North Ambergris Caye

Most Upscale Condotels:  Chabil Mar Villas, Placencia; The Phoenix, Ambergris Caye;  Grand Colony, Ambergris Caye;  Bella Maya, Placencia;  Sueno del Mar, North Ambergris Caye

Most Atmospheric Bars: Sugar Reef, Placencia; I&I, Caye Caulker;  Palapa Bar, North Ambergris Caye;  Rojo Lounge, North Ambergris Caye;  Putt-Putt, Belize City 

Most Charming Small Hotels:  Coral House Inn, Punta Gorda;  Casa Blanca by the Sea, Consejo, Northern Belize;  Iguana Reef Inn, Caye Caulker;  Seaside Cabanas, Caye Caulker

Best Restaurants:  The Bistro at Maya Beach Hotel, Placencia; Rendezvous, North Ambergris Caye;  Rojo Lounge, North Ambergris Caye;  Harbour View, Belize City;  Chon Saan Palace, Belize City

Most Deluxe Accommodations:  Azul Resort, North Ambergris Caye; Seascape Villas, North Ambergris Caye; Caye Chapel Island Resort (villas), Caye Chapel; Grand Colony, Ambergris Caye; Cayo Espanto, near Ambergris Caye

Best B&Bs:  D'Nest Inn, Belize City; Villa Boscardi, Belize City;  Lazy Iguana B&B, Caye Caulker

Best Snorkeling:  Glover's Atoll; Hol Chan Marine Reserve, Ambergris Caye;  Silk Cayes, Southern Belize

Best Diving:  Turneffe Atoll; Glover's Atoll; Lighthouse Reef Atoll

Worst Roads:  Peninsula Road to Placencia; parts of the Old Northern Highway;  golf cart path on North Ambergris

Best Beaches That Don't Take Forever to Reach:  South Water Caye; Placencia Peninsula; North Ambergris Caye

Postcard-Perfect Little Islands:  Silk Cayes, Southern Belize; South Water Caye, off Dangriga;  Half Moon Caye, Lighthouse Reef Atoll

Best Beach Resorts:  Caye Chapel Island Resort, Caye Chapel; Inn at Robert's Grove, Placencia; Hamanasi, Hopkins; Turtle Inn, Placencia

Most Memorable Belize Experiences (not requiring extreme physical effort):  Caving at Actun Tunichil Muknal; snorkeling with nurse sharks and sting rays at Shark-Ray Alley; diving with whale sharks at Gladden Spit; seeing the barrier reef for the first time

Uniquely Belizean Experiences:  Belize Zoo; Belize Botanic Gardens, duPlooy's;  cave tubing, Caves Branch River

Best Gift Shops:  Caesar’s Place, Cayo;  National Handicraft Centre, Belize City; Maya Centre Women’s Co-op, Maya Centre

Greatest Adventures:  Hiking to the top of Victoria Peak, Cockscomb Preserve; skydiving into the Blue Hole, Lighthouse Reef;  going on Lost World adventure trip with Caves Branch Adventure Co.;  exploring the Columbia River Forest on the Maya Divide trip

Most Knowledgeable Travel Agents:  Katie Valk, Belize Trips;  Barbara Kasak,  Barb’s Belize

Best-Run Hotels:  Banana Beach, Ambergris Caye; Lodge at Chaa Creek, Cayo;  Inn at Robert’s Grove, Placencia

Best Birding:  Crooked Tree Wildlife Sanctuary, Northern Belize; Chan Chich Lodge, Gallon Jug, Northern Belize; New River Lagoon, Northern Belize

Best Wildlife Spotting:  Belize Zoo;  Chan Chich Lodge, Gallon Jug, Northern Belize; Programme for Belize, Northern Belize;  (also, in the Petén, Tikal Park) 

Most Astounding Views: Views into Guatemala from El Castillo, Xunantunich; the Blue Hole, Lighthouse Reef Atoll, seen from above; views around Baldy Beacon area, Mountain Pine Ridge; also, panoramic jungle views from Temple IV, Tikal

Best Fishing Lodges:  El Pescador, Punta Gorda; El Pescador, North Ambergris Caye; Turneffe Flats, Turneffe Atoll

Scenic Drives:  Hummingbird Highway; through the Mountain Pine Ridge to Caracol; through Programme for Belize and Gallon Jug lands

Most Colorful Local Markets:  San Ignacio (Saturday); Punta Gorda (Wednesday, Saturday);  Belmopan (the old market, daily except Sunday)

Don't-Miss Mayan Sites:  Caracol, Lamanai, Xunantunich (plus Tikal in Guatemala, of course)

Interesting Off-the-Beaten-Track Spots:  Sarteneja Village, Northern Belize; Blue Creek Village, Northern Belize; Blue Creek Village, Southern Belize

Friendliest Villages:  Hopkins; Sarteneja; Crooked Tree