Last chance to save tourism

Lack of investment in destination resorts and a failure to refresh and refurbish existing hotels have been blamed for the long decline. Industry experts acknowledge Bermuda is unlikely to return to the glory days of the 1980s.

But they believe that by focusing on a niche market of affluent tourists the island can provide a powerful shot in the arm for an industry Premier Paula Cox acknowledged is “anaemic”.

In a Bermuda Sun special report today a series of depressing statistics and anecdotes from struggling businesses on the front line catalogue tourism’s decline.

But amid the gloom many see reasons for hope in the formulation of Bermuda’s first strategic plan for the industry, the prospect of progress at Morgan’s Point and a new focus on getting locals back at the forefront of the hospitality industry.

The beginnings of a financial recovery in the US should also guarantee an increase in visitors in the coming years. The wider trend for Bermuda tourism, though, is downward. The hotel and restaurant sector now contributes just 4.5 per cent to the island’s GDP — more a matchstick than a pillar of the economy.

While a steady increase in cruise ship arrivals has seen visitor numbers remain steady, air arrivals have consistently dropped to a record low of 232,000 in 2009 — the last year that stats are available. In 1987 the figure was close to 500,000. The effect of the decrease in air arrivals has had an impact across the board. As many as 83 guest houses and hotels have closed since 1980, according to an updated Bermuda Department of Tourism list seen by the Bermuda Sun.

The diminished stature of tourism in Bermuda’s economy has left some questioning the place the industry enjoys in the national political debate.

But Malcolm Butterfield, head of the new Bermuda Tourism Board, insists it is still central to the island’s success. “It’s important that the industry gets back to being a more successful contributor to the island’s economy. Tourism isn’t international business — it is much more labour intensive. It is a key industry for different reasons.”

Mr. Butterfield said the Tourism Board — which will formulate the basis of its plan in a two-day retreat later this month —was optimistic that it could produce a ‘road map’ that would take the industry out of its current malaise. “The plan will look to the next five years and beyond. There will be issues that can be dealt with in a couple of months, others will take years.”

He said clear performance indicators needed to be built into the plan, including a target of reversing the downward trend in air arrivals. He was ‘hesitant’ to suggest Bermuda could recover the numbers it enjoyed in its heyday in a new world of increased competition for tourists dollars. But he added: “If Bermuda gets its brand right and responds appropriately to the tourist profile that is keen to visit Bermuda then we will see improvement. It’s going to take time and patience but we must begin to see an upward spiral in tourism soon.”

 Tourism Minister Patrice Minors said the plan would be central to the direction of the industry. Bermuda should be looking forward instead of back to find the formula for success, she said: “Any new resurgence in Bermuda will take on the characteristics of a new era of global tourism.”

She said the current marketing strategy was to target affluent tourists, earning $135k or more as household income.

Ms Minors accepts new and improved resorts are essential to hooking big-money tourists: “Bermuda’s hotel product has been undergoing a period of rejuvenation in recent times and this trend needs to continue. Today’s traveller is more discerning, demands value for money and expects a high quality product.”

She said the Government remained firmly committed to the revival of tourism despite its decreased role in the economy.

Economics lecturer Craig Simmons said the question was not whether to focus on tourism — but who should lead the charge.

With an annual budget hovering between $30m and $40m since the early 1980s, Bermuda has spent close to a billion dollars over three decades of decline.

The figure would be even higher taking into account subsidies in the form of uncollected taxes.

 “There is a suggestion that maybe Government should get out of it and let the private sector figure it out for itself.

“There is no ministry of international business and it does extremely well. People give Government too much power, too much credit for what it can do. The economy is based on what private individuals do.”

Special report: Tourism

• Last chance to save tourism
• High-class hotels needed to hook wealthy travellers
• 'Success lies with well-heeled visitors'
• Promise of cruise business a cause for optimism
• Watersports firms feel the tourism squeeze
• Liveries slash number of bikes to rent
• Eateries cautiously optimistic for 2011
• Cruise ships are 'wiping out' mid-size hotels but there's reason for hope
• Ten ideas that might boost the industry
• One of our pressing needs in hospitality: good service
• Viewpoint: Has Bermuda lived up to expectations?
• Bermuda has to re-price itself into a niche market