Tourism in 2006

Once again, it?s the time of year when hopes abound for a successful tourism season. Confident predictions are made. Glossy advertisements are rolled out. Talk about hotel proposals fill the air.

It will be some months before the all-too familiar feelings of depression sweep across the tourism market.


Once again, it?s the time of year when hopes abound for a successful tourism season. Confident predictions are made. Glossy advertisements are rolled out. Talk about hotel proposals fill the air.

It will be some months before the all-too familiar feelings of depression sweep across the tourism market.

A year ago, Tourism Minister Ewart Brown announced the following targets: an increase in air visitors to 400,000 a year within three years; an increase in visitor satisfaction by ten percent; an increase in per person visitor spending of seven percent; Sixty-six hotel properties on the Island by the end of 2006, with 60 by the end of 2005, up from 58 at the end of 2004.

So did Bermuda meet the targets?

Air arrivals fell by 0.7 percent by the end of 2005, although there are two more years to run to meet the 400,000 figure.

Per visitor spending fell by marginally from between $1,081 and $1,239 in 2004 to between $1,077 and $1,238 in 2005. Statistically, that?s a wash, but an increase of seven percent it?s not.

Satisfaction levels levels ?remained high? among air visitors, with 89 percent saying they would definitely recommend Bermuda as a travel destination.

The number of hotel properties on the Island were not given at Dr. Brown?s press conference last week. It is encouraging that there are more hotel rooms available than there were in 2003 and 2004. However, the numbers still lag well behind what was available in the years prior to that.

Dr. Brown did deliver on one promise in a big way. There was more airlift to the island in 2005 with the launch of the Miami flight and other services. Last week, he had even better news with the announcement ? fortuitously timed on the same day as the tourism launch ? that Jet Blue Airways had applied to come to Bermuda this year.

That is a significant milestone in the efforts both to increase lift and to reduce fares, and Dr. Brown deserves credit for that. There is some risk that the flights will end up being filled with Bermuda residents rather than visitors, but if it forces airfares down generally, that?s all to the good.

There was also some good news in the sense that air arrivals generally tracked up in October and November last year. That suggests Bermuda is beginning to slowly rebuild the so-called shoulder months.

But overall, one can only take a wait and see approach on tourism. Many hotel properties remain marginal, as the closure of the Wyndham this winter shows, and it is likely that few new properties will come on line this year. Last year?s most significant new opening, 9 Beaches, had severe teething problems, but could produce a better performance this year.

It is not known yet when Tucker?s Point, Lantana or the Newstead-Belmont developments will open, although all will at some stage. Any redevelopment of Club Med in St. George?s seems further away than ever.

Dr. Brown has stated that Government is looking at rezoning land for hotel developments, but it is not at all clear that a lack of sites is the problem. The more severe issues are, as ever, structural. Bermuda?s high cost base ? not only for hotel workers, but for construction, services and everything else ? makes it difficult for hoteliers to charge a competitive room rate, and service levels still need more work to justify the rates that must be charged.

Bermuda?s tourism recovery requires baby steps, and not grandiose promises. Over the years, there have been far too many of those.

This newspaper would be satisfied if air arrivals simply increased this year.

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