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Gloomy tourism

Last week, two new sets of tourism statistics were released by Government; neither of them good.First, the Cabinet Office released a partial set of arrival statistics that attempted, in what is by now absolutely typical spin, to make out that August air arrivals were a triumph because they were only slightly below the figures for last year, despite the current global economic upheaval.That would appear to be good news, at least until reporters at this newspaper got hold of the full set of statistics, which put a rather different spin on the August arrival figures. While it is true that the total arrival figures were just one percent below August 2007, it's worth noting that Government has refused to release the arrivals figures for July, presumably because they are bad.

Last week, two new sets of tourism statistics were released by Government; neither of them good.

First, the Cabinet Office released a partial set of arrival statistics that attempted, in what is by now absolutely typical spin, to make out that August air arrivals were a triumph because they were only slightly below the figures for last year, despite the current global economic upheaval.

That would appear to be good news, at least until reporters at this newspaper got hold of the full set of statistics, which put a rather different spin on the August arrival figures. While it is true that the total arrival figures were just one percent below August 2007, it's worth noting that Government has refused to release the arrivals figures for July, presumably because they are bad.

This is typical of the way that the Tourism Ministry is run; it is not about informing the public, it is about making the Tourism Minister and Premier look good. Even when the results are released, they are selective. Dr. Brown failed to release the cruise ship arrivals. He no doubt will say that cruise arrivals are less important than air arrivals, and he is right. But that never stopped him before, especially when the surge in cruise arrivals in the early part of his tenure in tourism boosted overall numbers.

What is most interesting about the August figures is the dramatic change in patterns of where people stay and why they come to Bermuda.

First, leisure visitors – tourist arrivals – slumped by nine percent. And the number of people staying in commercial properties plunged by 17.3 percent. That was offset by a roughly equal increase in the number of people staying in private homes, and this may be because of the recent surge in fractional ownership in hotel resorts. But that won't give much satisfaction to hoteliers, who get nowhere near the same level of spending from their fractional guests.

The fact that air arrivals in August were roughly equivalent to the previous year was due to two things. One was a jump in air arrivals from Europe, presumably due in large part to the presence of Zoom Airlines – one of Dr. Brown's successes, but now bankrupt and gone – which offset a fall in US visitors. The other was a 63 percent or 1,637 person surge in business visitors.

Dr. Brown has long argued that a visitor is a visitor, and he's right about that too. In fact business visitors armed with expense accounts may spend more than the average leisure visitor.

But a business visitor's reasons for coming to Bermuda have almost nothing to do with the Tourism Ministry, unless it is for a convention. A business visitor is not coming on the basis of an advertisement, or the $500,000 New York Mets sponsorship or the multi-million dollar Bermuda Music Festival. He or she is coming to Bermuda because it is a good place to do business, and credit for that, if it belongs with any Minister, should go to the Finance Minister.

Turning to the first half of the year, the results get grimmer. As had been previously reported, arrivals for the first six months of the year were worse than any of the last 28 years. And if the best measure of the health of tourism is spending, well, it was down by 10.4 percent. For the first half of the year, they are down 16 percent.

For hotels, the picture is a bit better; revenue was down 3.7 percent for the quarter and 6.7 percent for the half. But for businesses that run on tight margins, a decline of 6.7 percent can be disastrous. If there was a glimmer of light, it was that cruise visitors' spending held up pretty well, but since they are estimated to spend one seventh of what an air visitor spends, that's a pretty thin silver lining. In fact it's less than that; Premier Brown's strategy after losing the regular cruise ships in Hamilton was to have cruise ships stay longer in Dockyard, thus spending more per visit. But the evidence from the first half of the year suggests they did not.

It can be argued that the current weakness of tourism is due to external factors over which Bermuda has little control. But Bermuda's tourism sector is woefully unprepared for an economic downturn, the marketing efforts of tourism are making no difference, and Dr. Brown's claims of a platinum period in 2010 are wearing thin. He is beginning to sound like President Herbert Hoover's declaring in the middle of the Great Depression that "prosperity is just around the corner".