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If today's pie-in-the-sky becomes tomorrow's pie-on-the-table; if Bermuda gets back to a national stock of 8,000 hotel beds; and if Bermuda retains enough of the international business mass that we now have; Bermuda will have maintained an existing though precarious economic balance.

For tourism's bread-and-butter, Bermuda would need 425,000 to 500,000 high-spending air arriving tourists and business visitors to profitably fill 8,000 beds. Adding 350,000 to 400,000 lower-spending cruise visitors produces jam. Numbers in this kind of combination will likely provide the maximum number of visitors that this island will be able to profitably accept, adequately sustain, and successfully entertain.

These maximums mean 775,000 to 900,000 visitors per year. That's 17-37 per cent higher than our best ever 659,000 (in 2007). Or 41-64 per cent higher than our 550,000 total (in 2008).

 In 2006, a typical year, international business brought in about $1,900m U.S. dollars in foreign currency receipts. Discounted for business visitors, tourism brought in about $400m U.S. dollars.Throughout the past decade, tourism brought in just under 20c of each dollar of foreign currency receipts.  Of this 20c, air arrivals provided 17 cents and cruise visitors provided three. International business earns the remaining 80c in the financial process that keeps our Bermuda dollar equal to a U.S. dollar.

Current income levels

If Bermudians are to maintain current incomes and living standards, total foreign currency receipts must remain at or near current levels. Even re-grown, tourism will still only contribute a maximum of 20c - 25c towards the relative value of a Bermuda dollar. The remaining 80c - 75c will still have to come from somewhere else - if foreign currency receipts are to remain at current levels.

If tourism climbs back to higher levels, but international business declines or disappears, Bermudian incomes will fall. That fall will mean that relative to the U.S. dollar, the Bermuda dollar will decline in value. Or, the amount of Bermuda dollars that finally reach your pocket will decline.

What will happen if air arriving leisure tourists stay below 2007's fully discounted figure of about 244,000?  Or 2008's similarly discounted and even lower figure of about 212,000? And if they plummet and don't recover from 2009's likely range?

Too few air-arriving leisure tourists will bring these consequences. 

Insufficient scheduled flights. Insufficient hotel beds. Insufficient quality restaurants. Further reduced retail choice.

A string of negatives like these will degrade Bermuda's ambience. In turn, this will adversely affect international business and its pool of resident guest workers. If adversely affected, international business will probably shrink below critical mass. Once below critical mass, remaining businesses may well dribble - or run - or fly - away.

Suppose international business leaves anyhow? Bermuda might always draw some cruise visitors and land tourists. So some level of tourism may always exist. 

But even if a massive 1,000,000 cruise visitors floated in, they would still only spend the equivalent of $250m. Air arriving tourists at today's 250,000 [or less] may deliver a better spending return of about $360m.  Even with the very high number of 1,250,000 tourists, we would still only have between $600m and $700m of total foreign currency receipts. We'd be short by at least $1,500m in total foreign currency receipts.

Without international business's big chunk of foreign currency receipts, Bermuda's seemingly ever-refilling pot-of-gold won't refill to customary levels. Government revenue from Payroll Tax and Customs Duty will sink. Without exception, all our individual incomes will drop by more than half. So will our living standards. Black and white, all of us will react to that. Some will take to the streets to express their anger.

Some will emigrate

Some Bermudians - black as well as white - will emigrate. Those who don't or can't will stay and scrabble for low-income jobs. Those who stay will have to take jobs servicing the vastly reduced number of hardy tourists who keep on coming - but not spending in the old way.          

Bermuda's national business model has changed. Tourism has become a support system for international business and the number of air arrivals is the hinge factor. At three cents in the dollar, cruise business is peripheral, not central. It can never replace a loss of air arrivals.

Keeping international business requires maintaining a high rate of air arrivals. Lose air arrivals and we could lose international business.  

The new Bermuda reality is that Bermuda must maintain the right working balance between junior partner tourism and senior partner international

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