Tourism guru upbeat about island’s recovery
Bermuda’s tourism sector will recover nearly fully from the impact of the Covid-19 pandemic by 2023, a tourism economist said yesterday at the opening session of the Bermuda Tourism Summit.
Adam Sacks said tourism in Bermuda will operate at 20 per cent of 2019 levels this year, improve to 67 per cent next year, reach 79 per cent in 2022, and 94 per cent three years from now.
He said: “Part of the strategy is survival in the three-year period to get to that point.”
Mr Sacks said he expects the first half of 2021 to be “very difficult”, but said the second half of the year will see improvement.
He said tourism accounted for 19 per cent of the island’s gross domestic product, or nearly one fifth of Bermuda’s economic output, adding that 23 per cent of all jobs are directly or indirectly supported by the visitor economy.
Mr Sacks said the downturn because of the coronavirus pandemic came at a time when Bermuda tourism was on the upswing.
He added: “Bermuda has reinvented itself, approached the market in innovative ways, and has done it while staying true to who you are.”
Most noteworthy, he said, was that per-person visitor spending had increased at the same time that volume had increased.
Mr Sacks added that the loss of 80 per cent of the tourism economy this year was “a massive call to action to do all that you can from a policy and strategic standpoint to restore a central pillar of the Bermuda economy”.
The founder and president of the firm Tourism Economics was the opening keynote speaker at the summit, which had the theme “Reset, Reimagine, Renew”.
He addressed virtual audiences at the Hamilton Princess and Beach Club and Rosewood Bermuda on the state of the US and global economies, and the implications for the travel industry, including Bermuda.
Mr Sacks said recovery of the tourist economy faces risks but “is inevitable”, so Bermuda needed to be planning for it.
He said: “By planning for it, we can accelerate it.”
Mr Sacks added: “Travel has always come back. There is no substitute for going somewhere beautiful with the people you love.”
He said that visitor volumes to Bermuda have shown steady improvement since the airport reopened on July 1, hitting 16.1 per cent of 2019 visitor volume earlier this month.
Mr Sacks said: “There is still a ways to go, but Bermuda is on its way.”
He added that the continuing increase in the number of seats and flights available to visitors was “a testament to how Bermuda has positioned itself so well as a safe haven”.
He said that a survey in the US showed that only 50 per cent of American householders felt safe travelling outside their community.
That was reflected in figures that showed that air travel by Americans was at one third of previous levels.
But Mr Sacks added: “That is likely to increase in the coming months as studies show that air travel is relatively safe compared to other activities.”
While 11 million Americans remain out of work, he said high-income earners were least affected by job losses.
Mr Sacks said: “Those people are your customers. The more you earn, the less likely your job is affected by this crisis. That does somewhat insulate Bermuda from the US job market.”
A positive sign, he said, was that US household savings rates were increasing, which means “ammunition is still left for consumption as we move through the difficult days ahead”.
Mr Sacks said a global-risk survey of corporate executives by related company Oxford Economics, which showed that they were becoming slightly more positive about global growth prospects in the next two years, was “somewhat encouraging”.
He said another federal economic stimulus package is necessary and likely to happen in the US “once politics gets out of the way”.
Mr Sacks added that after months of Zoom meetings, and other disruptions to normal life, the enduring legacy of Covid-19 will be “gratitude”.
He added: “Gratitude is what will drive the recovery on the other side.”
David Burt, the Premier and Minister of Tourism, also addressed summit attendees at the morning session.
Mr Burt said the summit, and the international golf, sailing and rugby events being held on the island this month will “drive the message overseas that we are safe”.
He added that Bermuda “did not have to write off 2020”.
Glenn Jones, the interim chief executive of the Bermuda Tourism Authority, said that 66 per cent of the island’s hotel inventory is “now back online”.
He said the summit shows that Bermuda can host in-person meetings safely.
Mr Jones added: “Safety is truly our brand signature right now.”