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Tourism trends

Tourism Minister Dr. Ewart Brown was celebrating the improvement in first quarter tourism arrivals yesterday when he showed the media and industry leaders the new figures for January through March.

He was right to do so. Air arrivals were up 11 percent compared to 2004, and more importantly, both total spending and per capita spending were up as well. That meant that not only were more people coming to the Island, but they were putting more money into the economy as well. For the most part, visitor satisfaction figures were up too, meaning that those people who came to the Island are more likely to return.

Still, these figures must be tempered with caution. The increase in arrivals, according to the Department of Tourism, put Bermuda back where it was for the first quarter of 2003. Arrivals in the first three months of 2004 were severely hampered by the lack of beds and flights after Hurricane Fabian caused cutbacks and hotel closures.

Nor should it be forgotten that 2003 was hardly a banner year compared to the 1990s. So there is still a long way to go. What is more encouraging is the increase in visitor spending, which is a more important measure than raw arrivals figures. If visitors are spending more money, then that means hotels are getting more revenues and so are restaurants, shops, taxi drivers and so on. That?s good for the economy and good for Bermuda.

Improvements in satisfaction levels, although patchy, are generally headed in the right direction. A slight decline in the proportion of visitors on the Island for business is also encouraging; it suggests that the new visitors are coming for vacations and not work.

While no one would deny the importance and value of business visitors, the long term success of Bermuda tourism depends on people who are coming here for rest and recreation, and not because their bosses have told them to come.

What?s a little more worrying is that visitors tended to be older this year than last year. Forty percent of air visitors, according to the Department?s exit surveys, were 55 or older, compared to 33 percent in 2004. To be sure, this proportion is likely to change over the summer season, but the trend is worrying because Bermuda needs younger visitors in order to assure the long term future of the Island.

On the other hand, older visitors tend to have more disposable income and more leisure time. The same airport survey showed that the proportion of visitors with household incomes of $150,000 or more rose to 37 percent from 33 percent this year while those with household incomes of $100,000 or less fell from 44 percent to 40 percent.

That?s good news: Bermuda?s high structural costs mean it must attract a well-heeled visitor and then give them the service they demand. That reality is also reflected in the length of stay figures, which showed a decline from seven nights in 2004 to 6.5 nights this year with drops in virtually all categories of accommodation recorded.

That fall must partly be due to the Island?s high room rates and costs, and given the fall, it is a little surprising that spending rose in the same period since it is a basic rule of thumb that the longer people stay on the Island, the more they will spend.

Still, while the first three months of the year are not enough to offer any guarantees about the rest of the year ? and Bermuda has seen too many false dawns for tourism anyway ? it can be said that at least tourism is headed in the right direction.