Visitor arrivals fell 22 percent between July and September and those that did come spent less, Premier and Tourism Minister Ewart Brown announced yesterday.

A sharp decline in cruise ship visits and the global economic crisis are the key factors behind the slump, the Premier told a press conference on the third quarter 2008 tourism statistics.

However, air arrivals have so far withstood the effect of the credit crunch and remained virtually unchanged, dipping marginally from 97,875 in the three months last year to 97,477 in the same period this year.

Of these, the number of business visitors increased six percent from 10,599 to 13,828; while those here on vacation slipped 11 percent from 68,144 to 63,284.

Cruise ship passengers tumbled more than a third, from 175,148 to 114,233; with the total number of tourists dropping from 273,242 to 211,917.

Visitor arrivals from the United States went down seven percent, but numbers from Canada were up 27 percent and numbers from the UK were up 20 percent. Estimates of total spending based on exit surveys from visitors went down – from a minimum of $127.4 million to a minimum of $106.8 million and from a maximum of $149.3 million to a maximum of $129.5 million.

Tourism-sponsored events during the three months included the Grand Slam of Golf and the Music Festival featuring pop superstar Beyonce.

The Premier told the media Bermuda's tourism industry had felt the knock-on effects of "dizzying volatility" in recent months.

"It's been said that these are the most uncertain financial times since the Great Depression. That is hard to argue," he said.

"Without a doubt the domino effect of the strained global financial industry, which has been hindered by the US credit crunch and a stagnant housing market, has caused us to take a sobering look at how we conduct business during these challenging times. The uncertainty in the global market has meant that the consumer has become more cautious and wary about how they spend their money and what they spend their money on.

"However, in the midst of this uncertainty, Government has remained front and centre, standing shoulder to shoulder with all our partners in every sector of the community to not only offer reassurance as we navigate through these troubled economic waters, but also to pledge that we will continue to respond proactively to the financial challenges by enacting aggressive programmes and initiatives to stave off the negative effects.

"The effect of the slowdown is clearly manifesting itself in the bottom line for tourism. We believe, however, that we can retool and refocus in an effort to strengthen our tourism industry for the months to come."

On cruise ships, he said: "It is important to note once again that the decline in cruise arrivals was long planned and often explained to the public as we prepare the new cruise ship port in Dockyard.

"We made significant progress on that project in the third quarter and the forward-thinking is paying off with renewed interest from the cruise ship industry. Just today Celebrity Cruises announced it will return to Bermuda in 2010 with the Summit, berthed at Dockyard.

"I should also note that Holland America made some positive waves in Bermuda when we secured its Veendam to return to Bermuda with calls in Hamilton and St. George's in 2009."

He said he was encouraged by the stability of air arrivals, which he described as "fairly positive news". But he warned he was extremely concerned about worrying signs of cancellations at major hotels as companies, particularly those in the US, tighten their belts.

A breakdown of spending patterns reveals people splashed out less on accommodation and eating out during their stays.

The amount spent on accommodation by the average person fell from $871 to $791; and that spent on meals and drinks dropped from $334 to $283. Based on travellers' exit surveys, it is estimated the total amount spent fell from a minimum of $1,330 to $1,100 per leisure visitor; and from a minimum of $1,128 to $1,081 per business visitor.

New director of Tourism Billy Griffith, whom the Premier said has shown an invaluable knowledge of the industry during troubling times, told The Royal Gazette: "The figures released today show that there is clear reason to believe that all is not lost, but it is also clear that the next six to 12 months is going to be extremely tough in terms of how we face and deal with the issues. My objective is to ride on whatever momentum there is in any specific market.

"I do not know what the Ministry can or cannot overcome at this stage but we will certainly not be paralysed by the situation that we find ourselves in. There are some things in our arsenal that we can use — we have to be realistic to know that there are many things which will be out of our control, and this is what we have to manage."

Dr. Brown said efforts to cope with the difficulties facing tourism included:

• packages geared towards capitalising on the 400th anniversary of Bermuda in 2009;

• continue committing funds to corporate and incentive group business promotions, which helps large hotels;

• encourage key airlines to increase their loads;

• continue hotel co-op partnership promotions and solidify agreements with key wholesale and tour operator partners.