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Tourism figures

Last week, Tourism Minister Ewart Brown discussed the latest tourism figures for the Island and announced a raft of new initiatives, including plans for a hotel grading system.

The headline for the story was “Cruise figures lift tourism gloom”, which accurately encapsulated the third quarter’s arrival statistics. Air visitors fell year over year, while cruise arrivals rose again.

This was somewhat depressing news. No one would turn cruise visitors away, but in terms of economic impact, one air visitor is the equivalent of five cruise passengers. In addition, the air arrivals numbers were the first set in which apples could be compared with apples, because it was only in the third quarter of 2004 that the majority of hotels were open after Hurricane Fabian. For air arrivals to fall in the period was disturbing.

Dr. Brown is beginning to give the appearance of a man who is discovering, if not that he has bitten off more than he can chew, that turning around the the tourism industry is harder than it looks.

That includes his criticism last week of the hotel industry, whose buildings and quality are below standard. This was probably an accurate statement, but it is hard to avoid the feeling that his criticisms, made in public, were partly an attempt to shift some of the blame for his own Ministry’s failure to turn around the sector. That Dr. Brown did not criticise the hotels earlier in the year when figures were improving compared to 2004 adds credence to that perception.

It would be unfair to expect one person or one Ministry or one segment of the tourism industry to turn the whole industry on their own.

And it would be nice, just once, to hear a Minister of Tourism admit what everyone must surely know:

[bul] That there is no quick fix for tourism.

[bul] That many of the problems the industry faces are structural — especially the Island’s high fixed costs of labour, construction, food and the like — and will take time to turn around.

[bul] That the quality of the hotels and all the other businesses involved with tourism need to improve.

[bul] That service levels have to improve if Bermuda is ever to justify the high costs it must charge.

[bul] That until the cost of getting to Bermuda by air is reduced, Bermuda will always struggle to turn the industry around.

There have been improvements in the last few years, and Dr. Brown can take credit for some of them. Certainly, there are more airlines, and more seats, serving the Island. Airfares are still high, but they have begun to come down, and the announcement that British Airways will serve the Island seven days a week next summer is very welcome news.

The quality of the hotel plant, is better, on the whole, than it was before Hurricane Fabian struck. The need for massive repairs after the storm was a blessing in disguise in that sense. But there is no argument that more needs to be done.

Still, Dr. Brown should listen carefully to the industry when they say that it is hard to spend millions of dollars on capital improvements when occupancies — and cash flow — are falling.

And service levels are still far from where they should be and need to improve.

One element of tourism that is being reviewed is the Island’s advertising agency. This is one of the few areas that the Tourism Minister directly controls, and Dr. Brown has put Arnold Worldwide’s contract out to tender, although Arnold will be among the bidders.

It is not entirely clear what the problem with Arnold is. If there is a problem, it may be with the lack of exposure Bermuda gets in the paid media, and that is more due to the fact that Tourism has had no Budget increase in real terms in years, while the cost of booking ads has become more and more expensive.

In addition to taking on the hotels and his advertising agency, perhaps Dr. Brown should be taking on Finance Minister Paula Cox about dedicating more money to marketing the Island.