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V.I., HOTELIERS DIFFER ON DROP IN TOURISM ARRIVALS

Aug. 23, 2002 – Statistics from the V.I. Bureau of Economic Research showing the number of tourists coming to the territory in the first six months of 2002 down by 7.8 percent from the year-earlier period are being seen in different lights by the government and the private sector.
Lauritz Mills, director of the Bureau of Economic Research, sent out a press release saying, in essence, wait a minute, things aren't as bad as they seem.
"Let's put it in perspective," she said in a Source interview.
Across the Caribbean, she said, tourism fell by double digits following the Sept. 11 terrorist attacks on the U.S. mainland. Until Sept. 11, she said, Virgin Islands tourism was strong.
Thanks to a healthy winter, spring and summer in 2001 that offset plummeting figures after Sept. 11, tourism arrivals increased by 5 percent overall for 2001, she said.
While the number of cruise ship passengers increased by 7 percent for all of 2001, the number of air arrivals dropped by 3 percent.
Mills' press release was followed by one from gubernatorial candidate John de Jongh that said the figures don't lie.
"We're in trouble, and those at the top refuse to acknowledge it," de Jongh said, calling for the creation of a V.I. Tourism Authority.
The V.I. business sector in general and the hospitality industry in particular lobbied several years ago for the creation of a private/public tourism authority that would replace the government's Tourism Department. The semi-autonomous authority would have majority membership from the private sector. The 23rd Legislature passed a bill creating such an authority, but Gov. Charles W. Turnbull vetoed it.
In his release, de Jongh said the territory needs leadership that "understands the basics of a tourism economy and who knows how to partner with all components of the industry … the airlines, the cruise ship companies, the hotels, the travel agents, the charter boat companies and all others that impact this most important segment of our economy."
In addition to the effects of Sept. 11, observers say the drop in tourist arrivals reflects a downturn in the economy — the plummeting stock market and the fact that major corporations are laying off workers left and right.
Bob Siefert, president of the St. Croix Hotel and Tourism Association and general manager of the Divi Carina Bay Resort and Casino, said that economically "bulletproof" resorts such as Caneel Bay on St. John, Little Dix Bay on Virgin Gorda and the Four Seasons on Nevis aren't affected. But, he added, properties such as the Divi suffer because their middle-income guests are worried about whether they'll have jobs next month.
And, he said, the publicity about Carnival Cruise Lines dropping St. Croix as a stop for two of its larger ships because of concerns about crime hasn't helped.
A look at the January-June figures for 2002 and 2001 show that St. Croix took the biggest hit, with air arrivals down 11 percent this year over last. For St. Thomas and St. John, the drop was 4.4 percent.
Cruise passenger arrivals were off 28.7 percent for St. Croix, which had relatively few ships calling, and down 8.7 percent combined for St. Thomas, by far the territory's major port of call, and St. John.
As far as overnight visitors, since St. Thomas and St. John numbers are lumped together, they may not reflect St. John's reality. Kathy McLaughlin, who heads the St. John Accommodations Council, said that while this January looked a little soft compared to January 2001, bookings were strong throughout the spring.
"We had a lot more last-minute bookings," she said. And she said vacation villa managers were occasionally driven to discount their prices to fill their properties.
McLaughlin's remarks reflect what hoteliers said throughout the winter and spring season — that people were waiting until right before their departure to book, so as to see what sales might materialize and whether it was safe to fly.
However, Richard Doumeng, former president of the St. Thomas-St. John Hotel Association, said that given what the industry had anticipated after Sept. 11, the winter season turned out better than expected.
But number of visitors does not tell the whole story. Territorywide, hoteliers slashed their prices to entice tourists. "It's a double whammy," Siefert said.
Siefert said a government-sponsored promotion giving guests their fourth night free, a 35 percent discount on the room rate and a $100 gift certificate that cost hoteliers $50 helped to fill rooms. But, he added, it didn't generate as much revenue as rooms sold at the usual rate would have done.
Doumeng said rates published in The New York Times showed the upscale Renaissance Grand Beach Resort offering deals cheaper than the middle-of-the-road Bolongo Bay Beach Club and Villas, which his family owns and for which he is the general manager.
"That's not good for the Renaissance, and it's not good for Bolongo," Doumeng said.
Siefert said the prognosis for the coming winter season doesn't look promising. "We’re not seeing anything," he said.
But Doumeng said he's not worrying yet. Long before Sept. 11, the travel industry created a "society of procrastinators and bargain hunters," he said. "It's not unusual to pick up 30 to 35 percent of the occupancy rate for the month in the month."
David Yamada, president of the St. Thomas-St. John Hotel and Tourism Association, and the organization's executive director, Beverly Nicholson, were both off island on Friday.

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