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Winners face fixing struggling tourism industry

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Whoever wins the election tomorrow will be forced to manage a struggling tourism industry.

One hotelier, who asked not to be named, said Covid-19 was “an elephant in every room” of the industry.

He said: “Our numbers for the years had looked all right — not record-breaking, but far from the worst year we have had — but then Covid came and all the business went away.

“Could Government have done more to get people here? Probably, but with the state of the world right now I don't know what kind of return on investment there would be, and the health implications are clear.”

The hotelier said the industry would need continued Government support as many potential visitors would be hesitant or unable to travel because of the pandemic.

He said: “We do have a reputation as a safe destination, which is a plus, but a lot of people are nervous about going anywhere right now.

“The health issue is one piece of the puzzle but there is also the cost. Bermuda isn't the only place where people are having a hard time financially.

“Selling Bermuda as a safe and clean destination is absolutely something we can and should do, but there are going to be a lot of people who don't want to travel for a while or who can't afford to travel.”

According to figures from the Bermuda Tourism Authority, visitor arrivals rose from 580,000 in 2013 to a record 808,000 in 2019.

Those figures were bolstered by a growing number of cruise travellers, which increased from 340,000 in 2013 to 536,000 last year.

However, air arrivals — the figure more closely related to visitor spending and economic benefit to the island — has been less consistent.

The number of visitors who flew to the island fell from 236,000 to 220,000 between 2013 and 2015 before they began to rise.

In 2016, the island recorded 244,000 visitors, which rose to 270,000 in 2017 and 282,000 in 2018.

Air arrivals, however, slipped last year to 269,000 with a drop in air lift blamed as the chief culprit.

The One Bermuda Alliance has claimed credit for the industry's turnaround through both its creation of the Bermuda Tourism Authority and the island hosting the America's Cup.

The party's time in power also saw the launch of multiple hotel projects across the island.

The Pink Beach Club was torn down to make room for the Loren at Pink Beach, which opened its doors in February 2017; the Surf Side Beach Club received a major revamp to become the Azura Hotel; and major investments were made in both the Hamilton Princess and Rosewood Tucker's Point.

The OBA administration also saw ground break on two long-awaited hotel projects — the St Regis Hotel development in St George's and the Caroline Bay development in Southampton.

But while the St Regis Hotel is on course to open next year, the Caroline Bay development halted work last year over financial challenges, which left taxpayers with a hefty bill.

The project was backed by a $165 million government guarantee arranged under the OBA administration, which had to be paid to lenders last year.

The payout required Parliament to approve a $200 million credit line for the Ministry of Finance and the island's debt ceiling was raised by $250 million as a result.

While the 2020 tourism year is not over, quarterly figures released by the BTA have painted a grim picture due to the cancellation of cruise visits and the prolonged closure of the airport because of the Covid-19 pandemic.

The BTA said that half-year data tallies, incorporating the second-quarter results, revealed an 85 per cent drop in leisure air arrivals from January to June, along with a 66 per cent decline in air capacity.

Total spending by leisure visitors arriving by air fell 85 per cent to an estimated $20 million over the first six months of the year.

Cruise arrivals went down 96 per cent, with a single ship call in February before an industry-wide shutdown.

As part of its platform, the PLP has pledged to seek out new investment for the halted Caroline Bay development and support the $100 million redevelopment of the Fairmont Southampton.

The party also promised to pursue a state-of-the-art medical tourism facility, develop signature events to attract visitors to the island and move forward with a long-discussed marina in the Town of St George.

Both the PLP and the OBA have pledged to move forward with casino gaming, promote Bermuda as a destination for film productions and create opportunities for local artists.

The OBA has also pledged to continue to grow sports tourism to help bolster visitor numbers in the quieter shoulder months, work with partners to increase airlift to the island and work to develop a “blue economy” focused on Bermuda's marine environment.

The FDM meanwhile has said it would remove regulations that prevent the development of “island-wide beach facilities, inclusive of food and alcohol” and boost nightlife by allowing entertainment establishments to stay open until 6am.

Selling island: Bermuda is a safe and clean destination (File photograph by Akil Simmons)
The shuttered Fairmont Southampton

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Published September 30, 2020 at 9:00 am (Updated September 30, 2020 at 8:09 am)

Winners face fixing struggling tourism industry

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