Tourism Minister David Allen unveiled a raft of new initiatives as debate on the Budget for the coming year continued in the House of Assembly yesterday.

And he released air arrival figures that he claimed showed that his Ministry's programmes were working.

“A year of challenges in tourism certainly lie behind us,” the Minister told his House colleagues. “A year of very distinct challenges lies ahead of us.”

But he said he was optimistic for the future, saying Government's initiatives in the sector was bearing fruit.

The Hotel Concessions Act 2000 had played a major part in six new or upgraded hotel developments, starting with the $250 million Tuckers Point Club which is expected to begin to come online this year, he said. And, referring to the United Bermuda Party's suggestion last week that an independent Tourism Authority be set up, he said through the Bermuda Alliance for Tourism (BAT), the private sector was already working in successful partnership with the Government.

Mr. Allen pointed to the Bermuda Elegant Escapes promotion as another initiative that had borne fruit. Under that programme visitors received $100 in vouchers to spend on the Island and that had benefited local businesses, he continued. Hoteliers had agreed it was a success and good for Bermuda, he added.

Mr. Allen criticised his Opposition counterpart for a suggestion in September that Government should give cash back to airlines.

“We said at the time to give cash back to the airlines was a bad precedent,” he said. But cash back to visitors had worked, “It boosted the economy and protected local jobs. That is what a forward thinking Government does.”

Last month air arrivals increased 4.2 percent over the same time last year, he announced. Figures for this month are even better - with a 19.36 increase in air arrivals.

And he released Caribbean Tourism Organisation figures which showed that Bermuda's air arrival figures for August 2001, as compared to August 2000, were down 1.9 percent - as compared to Aruba, which were down 3.0 percent, and St. Kitt's-Nevis where arrivals declined by 39.5 percent.

Arrivals to Barbados went down by 5.8 percent over the same period,” Mr. Allen said. “These statistics show that Bermuda, prior to September 11, was ahead of the game while competitors were spiralling downwards.”

Air arrivals were projected to increase when the World Trade Center disaster occurred, he said, adding that anybody who claimed the incident did not have a negative effect on tourism in Bermuda, would be denying the facts.

But in the immediate aftermath of September 11, his department responded quickly, he claimed. “We were told by wholesalers we were the first to approach them in a proactive way... Bermuda was that far out of the gates.”

The tragedy slashed air arrival figures by 45 percent for September, 40.45 percent in October and 25 percent in November. But by December air arrivals were down by only six percent and in January and February are showing positive figures, he said.

“We are showing a surplus as we would have done, but for the attacks,” Mr. Allen said. But he added that there was no room for complacency. “We are going to put our collective shoulders even more to the wheel so we can turn this around.”

Bermuda was going after “high yield” visitors, who despite being well heeled, are discerning and demand value for money. High yield visitors were appropriate because the Island could not sustain unlimited numbers and can not compete with other destinations on price because the cost of labour here is relatively high.

“The price value relationship must be bought back into the balance - it has been skewed for years... Things are now being done to redress that balance,” the Minister said.

He added: “We must give something profoundly unique... We must not only meet but exceed our visitors' expectations.”

He said his department had fine-tuned its approach by decreasing the number of programmes with tour operators and wholesalers from 20 to nine and decreased the number of trade shows attended by 25.

“We are refining, we are focussing, we are targeting,” Mr. Allen said. “By targeting more we get bigger bang for our buck.”

He then outlined the targets of the Tourism department's three year business plan. The visitor demographic targeted is 36 to 65 years old with an annual income of $135,000, he said.

He added that the Island had a comfortable carrying capacity of between 600,000 and 650,000 visitors annually.

The Tourism Minister said he was also seeking to increase lodging capacity by 500 beds and hotel occupancy by 25 percent.

Bermuda will have 134 new hotel beds this year, he pointed out. Mr. Allen also announced that construction of the long discussed seven storey hotel in Hamilton will begin later this year and last some 30 months. “All of this investment in the hotel sector speaks volumes... the stability and long term prospects of Bermuda,” he said. “And it speaks volumes to the stewardship of this Government to make this happen.”

Other targets in the three year plan include increasing the share of European visitors to 20 percent and increase visitor spending by 20 percent by 2004.

Currently, European visitors comprised only 12 percent of total arrivals but accounted for 17 percent of bed-nights, because they tend to stay longer, he revealed.

“Average spend” figures had gone down, from $1,369 per stay in 2000, to $1,325 in 2001, “a clear indication of a softening global economy, particularly in the United States”, as well as hotel rates reductions, he said.

But the Bermuda Elegant Escapes program had attracted 3,566 adults to the Island. “This programme has been so successful that the booking window has been extended to March 31 and the travel window extended to April 16.” He quoted a letter from a local restaurateur which complemented the programme as an “unqualified success”.

And Mr. Allen announced a new summer promotion called “complements of Bermuda” where a companion flies free for stays of seven or more nights.

And a new division in the department of tourism is being set up specifically for meetings and conventions business.

“We are taking a giant step forward to establish a meetings and conventions division,” he said. He said large conventions had a “tremendous” knock-on effect as regular visitors sought out alternative accommodations when the large hotels are full.

The division will be represented in each of the regional offices and in Bermuda “to ensure follow through”, he said.

Another new initiative this year is the opening of a regional office in Washington D.C., which is expected to be in place in preparation for the launch of a new US Airways route from the nation's capital. Mr. Allen declared that development as a “breakthrough because it will open up the affluent suburbs”, and stand enable the Island to target a well heeled community of diplomats and politicians.

“We're going to make Bermuda the place to be,” he said. In April several hundred travel agents will be flown to the Island for a week in Bermuda, the Minister continued, saying there's no substitute for experiencing the product first hand.

He also announced that the Island will have a new advertising agency this year - Arnold McGrath of New York City - to replace J. Walter Thompson.

The contract was now being finalised, he said.

Turning to the department's marketing efforts to attract more affluent African Americans to the Island, Mr. Allen said that another agency was being contracted to focus on the segment - Henderson Associates which would be the first African American agency ever appointed by the Bermuda Government to target the African American tourism market.

The department will be including a weekly There would be a guided tour through the Trail in packages sold overseas, he said.

He said a marketing programme for African Americans was “long overdue” and he reminded the House that Shadow Tourism Minister David Dodwell had criticised his proposals saying the market was only three percent. But the lack of marketing toward the segment was the reason “why it stayed at three percent. If you don't put the money in, it won't grow.” Another African American agency - Emerald Entertainment, was being contracted to produce two on-island events to attract African Americans - a Neo Soul Music Festival and a Black Celebrity Golf Tournament, the Minister revealed.

“This Government is proactive, and, yes, aggressive in its marketing. And we will not hide our light under a bushel.”

He said the UBP had not recognised that the United States is not a culturally homogeneous country. “It's a multi-ethnic country” and the “black American market is worth millions”.

And he accused the Opposition party of being schizophrenic in its criticism of tourism policies.

“Will the real Opposition please stand up,” he said. “Will they deal with their bouts of schizophrenia ?”

In May the Island will host the first African Diaspora Heritage Trail conference which should “propel Bermuda as the lead country on the Heritage Trail, he said.

The Trail spans the Caribbean, African and North America.

Mr. Allen said that niche markets are very important. “We don't see the African American market as a niche market, we see it as a very important market... But generally we feel niche markets as very important.”

Another new initiative is the launching of a “National Concierge” for Bermuda to provide personalised service to visitors.

The office will augment the Visitors Service Bureau, he told the House. And the department is negotiating with cruise lines to put Bermudians on the ships to advise visitors about on-Island attractions.

“We'll be the first country in the world to give our visitors a concierge for the whole industry,” he said. “It's my plan to have Bermudian concierge desks on the cruise ships that can tell our visitors first hand of the opportunities available in Bermuda. Now we will have Bermudians telling the real deal on the ships without any outside or ulterior motives.”

The Bermuda Jazz Festival will have a new producer - one with major media links - the Minister said.

“Jazz is music from the Diaspora and so there is great synergy between the Heritage Diaspora Trail and the Jazz Festival,” he pointed out.

And the department's website will have a multi language facility - with German and Italian to be the first languages introduced. The Tourism Minister said that some money for events sponsorship had been cut to “broaden the mix of events” and encourage local producers to work with private sector sponsors.

“This allows us to spread the funding more evenly” and “it's weeding them off a level of dependence on Government - and a more efficient use of tax dollars.”

This November Bermuda will hold its first Festival of Culinary Arts, he said

Mr. Allen continued: “One of the great things about this Budget... is the provision, for the first time, for incentives for the restaurant business.”

He said it was also planned to amend time-sharing legislation.

He then gave a run down of Government's Human Resources achievements in tourism - including the setting up of a $1 million endowment fund for students in the hospitality industry and internship programmes which give locals cruise ship experience and opportunities to work abroad in the marketing agencies.

Mr. Allen said he had approved five sailings to Bermuda of Carnival Cruise Lines top of the line mega ships. The programme, he said, was on a trial basis.

“We want to focus on smaller ships,” he said. “To that end we have negotiated with Renaissance Cruises.” Bermuda will be the first stop of the maiden voyage of the world Residensea” - a floating village - when it launches next month for a voyage across the Atlantic.

Mr. Allen said that despite budget cut backs, the Ministry was continuing to market new initiatives.

Advertising in North America will increase by 11 percent and the direct marketing budget has been increased said the Minister, as the Island tries to deal with the September 11 fall out.

The Bermuda Alliance for Tourism is being given funding for a chief executive officer and staffing but Mr. Allen said the other half of its funding should come from the private sector.

He said Bermuda's reliance on the American market had meant the island suffered more in the terrorism aftermath than other destinations such as Barbados where 50 percent of tourists come from Europe.

There were signs of a revival in visitor numbers in January and February and he said the August deficit was only 1.9 percent. He said: “The projections are looking healthy. Company businesses is coming in the summer.”

Bookings from Italy would already double that country's usual arrival tally and Arab countries were also looking to have conferences here, said Mr. Allen. Shadow Tourism Minister David Dodwell said a watershed had been reached and Bermudians were really fearful about the future. He said: “My concerns were not eased by the presentations over the last two and a half hours.

“We are hearing a lot of marketing ideas. I don't hear how to solve the systematic problems.”

A tourism authority comprising key players was needed to re-define Bermuda's tourism and cut a reliance on the strategy of one person - the tourism minister, said Mr. Dodwell.

He said a similar approach was typical in the States and Canada and was presently successfully used for the Bermuda International Business Association. He said such a formula allows for a quicker response to disasters such as September 11, which Bermuda was struggling to get to grips with.

“Others can turn on a dime, you would not be mired in bureaucracy.”

Mr. Dodwell called for a board of inquiry to monitor how money was spent in the tourism department, though he stressed his plan for Tourism Authority would not signal the demise of the department.

It was significant that the Minister of Transport was calling for a transport authority said the shadow Minister.

He noted there was no plan for reviving tourism such as his party's five-year-plan unveiled in 1998. “People don't know what's going on, there's no umbrella. You look at the spokes of the wheel but you never really see what's at the hub.”

However, Mr. Allen hit back at this suggestion and pointed to the Bermuda Alliance for Tourism (BAT) initiative and the Elegant Escapes initiative which had hundreds of thousands of dollars poured into it.

But Mr. Dodwell said BAT's total budget was only $350,000 and that Mr. Allen was waiting for the private sector to come forward before he invested government money.

Instability in the tourism department was shown by the departures of eight to ten key people including Gary Phillips and Richard Calderon, said Mr. Dodwell.

Mr. Dodwell said: “Look what happens when you work with three directors in three years.”

Six key points needed to be addressed, said Mr. Dodwell, including a five-year recovery plan, product development management, air strategy, cruise policy, on-Island tourism awareness and investment.

He chided Mr. Allen for blowing money on needless trips but he also lamented the fact that the Tourism department had its budget cut by two million dollars when extra spending was needed after September 11.

He said: “We need to prime the pump.

“Other countries doubled spending because they recognised that's what they have to do.” He said the minister had spent 78 days away last year on 12 trips costing $64,000.

Among the trips Mr. Dodwell drew attention to 20 days in South Africa and Spain, 13 days in Berlin and Toronto and 13 days in an unspecified Meditteranean location. He added: “I am told the Minister has lost five passports.” Passenger satisfaction was declining with 70 percent of tourists declaring they got their money's worth in 1996 compared to just 54 percent in 2001. Meanwhile more tax dollars were beings spent on getting fewer air visitors to come said Mr. Dodwell.

He said: “We were saved by international business.”

He added that it was an incredible indictment that Mr. Allen was boasting of arrival figures which were “only two percent down last August”.

The claim by Mr. Allen that Bermuda was not alone in having poor August figures was derided by Mr. Dodwell who said he had only picked countries that proved his point such as Caribbean nations in their off season, while ignoring those who were doing well such a Puerto Rico and the Virgin Islands.

He added: “How can you claim lack of hotel beds caused the decline when you can't fill the ones you have got?”

Shadow Tourism Minister David Dodwell said the Department of Tourism should be spending the $22 million in its Budget marked for marketing on investments instead.

The United Bermuda Party member reissued a call for a private institution separate from tourism to take over the reigns of managing the product.

He added that there was a need for more investment into the tourism industry, especially post September 11, and he used other Caribbean countries as an example.

“Puerto Rico spent $10 million on airline tickets to give to people to come to their country,” he said. “They gave each person two round trip tickets if they agreed to spend five days in the island. I am suggesting that the Minister of Tourism do the same thing. “

He also added that in order to revamp Tourism, Government needed to develop a better cruise ship policy.

According to Mr. Dodwell, Government did not have a solid one in place and he said he was opposed to the current six ship policy that Government has now.

“We cannot fit mega-ships here,” he said. “I am under the belief that Bermuda would be fine with five cruise ships - that would be a balance.”

Mr. Dodwell also unveiled a plan that had the Tourism Department investing strongly into development of attitudes of those who worked in the tourism industry.

He suggested that more pride demonstrated by those who worked in the industry, translated into better results, alluding that Government's Visitor Industry Partnership was not doing enough to garner results.

“We must do it internally. Are we treating our visitors today the way we did five years ago, ten years ago or 15 years ago? We may have lost a generation in how we treat our visitors.

“Therefore, we must invest several million dollars in a tourism attitude development programme. The level of hope and despair that is out there now, I think we can change it if we had this programme.”

He added: “Yes it's painful to look inward, but we cannot market ourselves out of this problem. “No matter how good places like Barbados or Hawaii are doing it, the way we are doing it we are going to lose.”

PLP backbencher Delaey Robinson was the final speaker on the Tourism Ministry Budget last night.

Mr. Robinson said the PLP had done more to revive tourism in three years that the UBP had in 34 years. And he invited members of the public to pick up a copy of the blue budget book - Government Approved Estimates of Revenue and Expenditure - to see what Government was really doing. Mr. Robinson proceeded to layout the “bundle” of initiatives the PLP Government has put in place to “re-invent” tourism starting with the Hotel Concessions Act.

Between the investment at Tucker's Point Club and the refurbishing going on at the two Fairmont Princesses alone, he said, the Act had already represented almost $300 million in new investment in tourism.

Also highlighted were reductions in the hotel occupancy tax and tax incentives on wine and spirits offered to properties offering Bermudian entertainment.

“The Minister of Tourism won't leave any bone alone, he has to suck all the marrow out of it,” Mr. Robinson said in reference to the tax incentives offered for developments which lease back properties for tourism use for six months each year.

He also praised Government's efforts to soften relations between hotel employers and union members saying negotiations are now completed on time where as in the past it was a near constant battle between the two groups.