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Aug. 21, 2003 – The Port Authority board's decision on Wednesday to roll back the 25-percent increase in landing and passenger fees it imposed last February could have a positive impact on negative concerns expressed by American Eagle executives at a meeting on St. Croix last week.
American Eagle's president, Gary Elmer, told business representatives and public officials that travel agency ticket sales to St. Croix are down 20.7 percent from last year. Further, he said, unless the V.I. government steps in with a brisk increase in advertising and marketing of the island, things do not bode well for the future.
Elmer said American Eagle is eager to collaborate on marketing with the Virgin Islands, but at this point its officials do not feel that they have a partnership with the territory.
Tourism Commissioner Pamela Richards took issue with Elmer's comments on Thursday afternoon, saying that of her department's $6.5 million budget, slightly over $2 million is "just for American and American Eagle alone — that's a third of the budget."
And, she continued, "I always have a problem when they say I don't get involved in the promotions."
Sen. Louis Hill called the informal meeting of American Eagle and St. Croix hospitality sector representatives to discuss options for increasing airlift to the economically troubled island. St. Croix Sens. Luther Renee and Ronald Russell also were present.
American Eagle provides shuttle service between St. Croix and San Juan, and also between St. Thomas and San Juan. Elmer said the carrier's decline in passenger traffic on St. Croix reflects an overall drop in demand for airline seats to the island from a range of destinations.
The news did not come as a surprise to hotel representatives intimately familiar with St. Croix's steadily sinking economy.
The solution, Elmer and other airline executives at the meeting said, is to sell the island as a destination aggressively. Pedro Fabregas, American Eagle director of marketing and planning, said the decline cannot solely be linked to St. Croix's current social and environmental challenges. Other Caribbean destinations have "more daunting" problems, he said, but "they have not fallen off the radar screen the way St. Croix has."
The reason, Fabregas said, is those other islands' continued commitment to advertising, marketing and promotion.
February's increases in landing and passenger fees at Henry E. Rohlsen and Cyril E. King Airports "was the straw that broke the camel's back," Elmer told the gathering. The airline subsequently terminated its service between St. Thomas and St. Croix and reduced its flights to and from San Juan.
Richards, by virtue of being Tourism commissioner, chairs the VIPA board — which voted the increases in at the end of January and voted them out again on Wednesday.
Fabregas said that even though air fares from the mainland to St. Kitts and St. Martin are $50 to $60 more than to the Virgin Islands, those islands are attracting more visitors than St. Croix. Both of those destinations maintain quality relationships with American Airlines and other sectors of the tourism industry, he said.
All of the airline executives said they are in constant communication with some 41 destinations within their region — and noticeably not with the Virgin Islands.
Richards on Thursday also disputed that. "My staff is in contact with American Eagle at least four to six times a month," she said, adding: "I don't think the left hand knows what the right hand is doing."
St. Croix hospitality industry representatives at the meeting were Fred Laue, president of the St. Croix Hotel and Tourism Association, and Derek Newton and Sue Herzog, managers at Carambola Beach Resort.
A report in Wednesday's issue of The Avis quoted Laue as saying American Eagle blames the Tourism Department for failing to work with the airlines and other tourism-related industries in advertising and marketing St. Croix. He said the St. Croix hotel association and its counterpart for St. Thomas and St. John would work together to develop a plan to market and promote the territory.
The Avis quoted Laue as saying that the Tourism Department does not have the same incentive as the private hospitality sector to develop an aggressive marketing campaign, because it does not lose money — except for the hotel occupancy tax — if it fails to sell the island.
"Unlike hotels," he said, Tourism officials "don't have to lay off people if they don't get tourists."
The senators expressed dismay over Elmer's remarks. In an effort to improve the situation through further discussion, Renee has invited the airline officials to appear before the Senate Economic Development, Agriculture and Consumer Protection Committee, which he chairs. He said he will call such a meeting soon after the Finance Committee's Fiscal Year 2004 budget hearings conclude next week.
Richards said she "cannot market an airline without their permission. I must have written permission, so they have to know we are doing advertising. And we're the only ones who do it for free, complimentary … I'm already doing cooperative ads, and I can't do the hotels without their permission. We already spend money to market — I literally cannot do any ad for anyone without their permission. How can they come back and say we're not contacting them? We are the first with the comp airline ads."
She also said she didn't know what Laue was referring to, "as we have to have the hotels' permission as well."
Richards said she does not make a point of regularly attending hotel association meetings herself. "I don't think it's necessary to attend every meeting, as long as the department is represented," she said. "I send liaisons. I cannot spend seven days a week going to all meetings."
Laue didn't return repeated telephone calls Wednesday and Thursday.
All public comment from both American Airlines and American Eagle, its subsidiary, comes from Minnette Velez, spokeswoman in San Juan, who wasnot available at press time.
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