Jobs lost in hospitality despite arrivals boost from Canada

Air arrivals during the second quarter of 2010 rebounded 3.4 per cent compared to the same quarter in 2009. A total of 77,512 tourists arrived by plane to the Island during the second quarter of the year, up from 74,985 in 2009. The increase was primarily attributed to an influx of tourists (+42%) from Canada, as air arrivals climbed to 10,368 passengers compared to 7,308 reported in the same quarter of 2009. The introduction of a new low cost carrier offering daily flights from Canada was the main reason for the growth in arrivals from that market.

The visitor count from the United States increased to 57,243 air passengers compared to 56,766 reported in the same quarter of 2009. In contrast, the number of air travellers from the United Kingdom and the rest of the world decreased 9 per cent and 10 per cent, respectively.

The increase in air arrivals translated into higher bookings at tourist properties. The number of visitors staying at resort hotels during the second quarter of 2010 rose 3 per cent over the same period in 2009. A total of 35,182 tourists stayed at resort hotels this quarter compared to 34,142 visitors in the same quarter of the previous year. Smaller accommodations such as small hotels, cottage colonies and clubs experienced a 28 per cent increase in visitors, while visitors staying at guesthouses advanced 15 per cent. In contrast, visitors staying in private homes and housekeeping accommodations fell 9 per cent and 40 per cent, respectively.

Expenditure by Air Arrivals

Visitor spending totalled $117 million during the quarter and was boosted by the increase in total air arrivals and average per-person expenditure. This level of spending was 35 per cent or $30.3 million more than in 2009.

All categories of expenditure were higher, with spending on accommodation and food accounting for the largest portion of the increase with growth of $28.4 million. Visitor spending on shopping, entertainment and transportation rose by 9 per cent.

Cruise Arrivals & Expenditure

A total of 171,295 cruise passengers travelled to Bermuda during the second quarter of 2010. This represented a 38 per cent increase year-over-year and marked the highest cruise passenger total since the third quarter of 2007.

Cruise ship passengers spent an estimated $30 million while visiting the Island this quarter, or about five million dollars more than in the previous year.

Overseas Spending by Residents

Travelling residents declared a total value of $18.1 million on overseas goods during the quarter. Purchases abroad were 1 million less than the same quarter of 2009.

Outlays on clothing & footwear continued to represent the largest portion of resident purchases abroad.

Although second quarter purchases of these items fell by 5 per cent to $9.7 million, they still accounted for 53 per cent of total overseas purchases.

Amongst other commodity groupings, residents spent less on tapes, compact discs, jewellery and watches, toys and sports goods and household items. In contrast, expenditure on computer hardware and software increased. Local retail sales of these items were also lower during this period.

Retail Sales

Consumers spent 3 per cent less on retail goods during the second quarter of 2010 compared with the same quarter of 2009.

All sectors reported lower sales this quarter with the exception of service stations which reported an increase of 11 per cent. Higher sales were boosted by a rise in the price of fuel during the quarter.

Sales of building materials and motor vehicles declined 23 per cent and 13 per cent, respectively. Increases in liquor and food prices did not translate into higher sales as liquor store sales dipped 5 percent and food sales remained relatively flat this quarter.

Hotel Employment

There were 2,475 employees in the hotel accommodation industry at the end of April 2010. The level of employment in the hotel industry represented an overall decline of 3 per cent compared to the same period in 2009. The largest absolute decline in the number of employees was reported for cottage colonies & housekeeping with 40 fewer workers compared to April 2009. The drop in employment level can be attributed to the closure of some smaller establishments or their transformation to private dwellings.

Major hotels also hired fewer workers.

Major hotels remained the largest employer accounting for 79 per cent or 1,952 workers in the accommodation industry. Cottage colonies and housekeeping units employed 20 per cent or 504 workers, while guesthouses and micro-units employed less than 1 per cent of the workers in the hotel industry.

Hotel Gross Receipts

The 3 per cent growth in stay over visitors translated into a near $3 million increase in hotel gross receipts this quarter. The hotel industry collected $69.7 million in the second quarter of 2010 with resort hotels earning 88 per cent of total hotel revenue. Small hotels also benefitted from the increased occupancy which earned them an additional $1.3 million compared to the same period of 2009.

Lower occupancy at cottage colonies and other tourist accommodations factored into declines in revenue experienced at these properties.