January 30, 2013 at 5:54 p.m.
Part II of III
Tourism's Promised Land is barren
Even if ‘pie-in-the-sky’ hotel developments do pan out, we won’t have sufficient airlift
Overall, Bermuda might add about 1,400 more regular hotel beds. Fractional and Residential Units? If everything here pans out, there could be about 700 of these.
So Bermuda might climb back to around 8,000 commercial beds of various kinds - which is what Bermuda had 37 years ago in 1972.
Still, 8,000 is better than today's total of fewer than 6,000, but less than our 1987 high of 10,040. So 8,000 isn't exactly growth, nor is it really a step into the future. More like a half-step out of the past.
However, that's all 'pie-in-the-sky'. If Park Hyatt... if Sonesta... if Jumeirah... if... if... if...
Bermuda's 1970s era 8,000 bed inventory grew to 9,299 in 1980. During the '80s, average year-round hotel occupancy rates went as high as 73.9 per cent (in Gold year 1980) and 67.1 per cent (in Silver year 1987).
Two new ifs. If Bermuda re-achieved a total of 8,000 beds, and if Bermuda could get its hotel occupancy rates back up to those 1980s levels, then Bermuda needs 400,000 heads-in-beds Air Arrivals - which is what Bermuda was achieving from 1974 to 1994.
Achieving 400,000 Air Arrivals requires a 33 per cent increase over our best recent year of 2007 when we managed to get 305,548. This means that Bermuda's total Marketing and Advertising package must achieve far greater success.
Successful marketing must pull an additional 100,000 North Americans and Europeans away from cheaper cruise-ships, and other older as well as newer attractions like Jamaica, Seychelles, Thailand, Eastern Europe, South Africa, and so on... Having attracted their attention, Bermuda's marketing campaign must then convert this interest into real people who fly to expensive Bermuda and spend their dollars and euros here.
But that's still 'pie-in-the-sky'.
In 2009, Bermuda has fewer than 6,000 beds. On current form, in 2010, Bermuda will still only have around 6,000 beds. With 2009 half gone, can Bermuda get back to the number of air arrivals needed and the occupancy levels achieved in the 1980s? Starkly - can Bermuda attract an additional 100,000 air-arriving leisure visitors?
If this is possible, then, right now, Bermuda is getting it wrong. Bermuda's last 'best' tourism year was 2007. In 2007, out of 305,548 air arriving tourists, after discounting for 'business visitors' [15 per cent] and 'family and friends' [5 per cent], Bermuda had fewer than 250,000 air-arriving leisure tourists. That was what Bermuda was achieving forty years ago in 1968. So even with total visitor numbers reaching 659,572 in peak year 2007, tourism was still downhill.
The big gamble
What can fix the problem? Gambling casinos? With casinos in Las Vegas, Atlantic City, on nearby Indian reservations, and on cruise-ships, will North Americans choose to ignore these and fly to expensive Bermuda just to spend time gambling? Will gambling casinos pull in additional people?
Improved on-Island entertainment? This entertainment would have to service a large, affluent, but static residential market as well as a revolving tourist market. Two entirely different demands but an overall demand that would have to be met in a limited number of venues.
Also, if the entertainers are Bermudian, they have to be able to earn 'Bermuda rates of pay'. If 'Bermuda rates' cannot be paid, then these entertainers will have to be foreigners; so another set of guest workers. Gambling casinos, as another form of entertainment, might help.
Will improved entertainment pull in additional people? Shopping? Replace damaging Customs Duties with less-damaging Sales Tax, and thus give disappearing local retailers a fighting chance. This is the only way to lower some costs of doing retail business and thus get lower and more competitive pricing in place. Bermuda is currently competing with high-class shopping malls that are only a short car ride away from an affluent potential visitor. Bermuda needs to recognize and respond to that.
Will improved shopping pull in additional people?
Better marketing? On my foreign travels and in foreign media, I rarely see Bermuda ads or offers. But I see Barbados, Jamaica, Kenya, South Africa... Over the past 15 years, Bermuda's marketing efforts have lacked the consistency and media presence - now including the Internet - of the very successful marketing campaigns of the 1960s, 1970s, and 1980s. Will improved marketing pull in additional people?
What are we doing now?
What is happening now?
We're fretting over Casinos. We've gotten nowhere with on-Island entertainment. We seem, literally, to have a death grip on our one hundred and eleven year-old Victorian era Customs Duty system. Tourism Department? Is it on its tenth - twelfth? Fourteenth? - 'initiative' to revive Tourism and get more 'heads-in-beds'?
Marketing? Does Bermuda have a strategic plan? Does anyone know what it is? Is it achieving anything? Watch this space.[[In-content Ad]]
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