We need to extend the tourist season in Bermuda

FRIDAY, SEPTEMBER 16: Tourism in Bermuda continues to struggle from the glory days of the late 1980s when total arrivals exceeded 630,000 or even 1980 when air arrivals alone were just under 500,000.

Today, air arrivals are just above the 200,000 mark.  Ironically, it was also in the 80s that the Government of the day decided to place more emphases on International Business, which was seen as less labour-intensive and more financially rewarding.

As a result, sometime early in the 1990s international business overtook tourism as the leading foreign exchange earner.

In 2009, tourism contributed only 16 per cent of the $1.5 billion that International Business contributed to our Gross Domestic Product (GDP).

So can tourism return to the prosperous years of the 80s? Probably not. But we can, if there is a will, make it more prosperous than it is today. A visual look at tourism data may give us some clues as to where to begin. The top chart shows monthly tourism arrivals from 2001 to 2010.  The downward-sloping trend line tells us that which we already know.  But what the top chart also shows, and what anyone in the tourism Industry knows passionately, is that the peaks and valleys are getting lower.  In the July/August periods of 2001, 2006 and 2007, monthly air arrivals nearly hit 40,000.  That is in contrast to the years 2008-2010 when they hovered around 33,000.  On the valley side, tourism’s arrivals in January 2010 were the lowest in the decade at just over 6,000.

So the path to recovery must include ways to extend the now shortening tourism season. That involves creating incentives to come and or stay longer in the summer and to get more of them here in the winter.  Yes, you have heard it all before and this is not rocket science. But, as it has been said before, what is common sense is not necessarily common practice. 

Let’s look at the month of September in particular.  You’ll note that in 2001 there was a huge fall-off in arrivals from August. 

Of course that was due to the terrorists’ attacks, which had a worldwide impact on tourism. But every year there is a fall-off in September and a mini bump in arrivals in October. 

Hurricane month

The primary reason for this is that September is the peak hurricane month.  In modern times, all the major hurricanes to hit Bermuda occurred during the month of September, from Emily in 1987 to Fabian in 2003. Another possible, but lesser, reason for September declines is children returning to school in the US and families being preoccupied with that.  It seems clear, at least to me, that a possible solution is to make September a shoulder month and give people incentives to travel here during that time.

The bottom chart is telling a contrasting story on tourism expenditures.  While arrivals are on a slight, downward-sloping trend, expenditures are headed in the opposite direction.

At first glance this may be a positive trend, but hold on. While it is clear that visitors are spending more, the question is how is this expenditure occurring?

Is it that visitors are finding more things to do or more items to spend their money on, or are local prices increasing, forcing them to spend more? 

My guess is the later. A Visitor Price Index, along the lines of the Consumer Price Index, which measures changes in prices but measuring price changes on goods and services that visitors purchase, would have told us the reason for the spike in spending.  While one was developed more than a decade ago by Government but dropped, it needs to be re-established. If my hunch is correct, the jump in spending will be short-lived and the declines will return.

In the final analysis, any tourism recovery plan must include a detailed analysis of all tourism data to determine any underlying trends. In addition, population trends in our key markets, and those that could become key, have to be studied. 

Canadian Professor David K. Foot, in his book Boom, Bust and Echo: How to Profit from the Coming Demographic Shift stated that we can predict two-thirds of anything if we understood population projections. 

The United States census is complete; we need to start sifting through those data to find our tourists.

Cordell W. Riley is Managing Director of Profiles of Bermuda, a market and business research firm. He holds a master’s degree in Tourism Marketing and his 1985 thesis was titled: The Marketing Problems of Bermuda and their Long-Term Solutions.