Despite repeated references to the administration's five-year economic recovery plan and the need for all major players to be "reading from the same page," it was evident at this week's meeting of the Senate Agriculture, Economic Development and Consumer Protection Committee that disagreements abound.
In the four-hour hearing that attracted only a half-dozen community members as audience, differences were aired between the private and public sectors, between the administrative and legislative branches of government, among senators and even between the governor's nominee to head the Tourism Department and Government House itself.
Five individuals made presentations Monday night and addressed committee members' questions: Tourism Commissioner-designate Rafael Jackson, St. Thomas-St. John Hotel and Tourism Association president Richard Doumeng, St. Thomas-St. John Chamber of Commerce president John deJongh Jr. (who also chaired the governor's Economic Recovery Task Force that produced the five-year plan), and V.I. Carnival Committee chair Kenneth Blake and executive director Caswill Callender.
Doumeng and deJongh in their presentations repeatedly cited points made in the five-year plan. Examples:
– The V.I. government spent only half a million dollars for tourism advertising in fiscal year 1999, by far the least of any destination in the Caribbean. (According to the five-year plan, "most of the department's budget was allocated to the settlement of a contractual dispute between the department and a contracted advertising agency.")
– Tourism is paying $101,000 a year in rent for office space in New York and $78,816 a year in Washington, D.C.
– Visitors staying at time-share units — a growing segment of the local tourism market — do not pay the 8 percent hotel room tax that goes into the Tourism Revolving Fund, which is supposed to fund only tourism advertising.
– While the government's Bureau of Economic Research has assumed since 1981 that 88 percent of the airline passengers flying into St. Thomas and St. Croix are visitors heading for hotels, declining room occupancy rates show this is far from the case today.
Tourism money matters
During a discussion of the six mainland Tourism offices, Jackson said, "I need bodies in those offices. In order to get the bodies, I need a budget." For the coming fiscal year, he said, "I need at least a minimum of $15 million." Later, he said that his department, which got $3.5 million from the General Fund last year, has been "ordered to cut the budget 10 percent" for 2001.
Sen. Violet Anne Golden told Jackson that, given fiscal realities, "You're either going to pay for people or you're going to pay for promotion and advertising." But she also advised him to "Tell those people at Government House they have to let you do your job."
Sen. Lorraine Berry, who chairs the Finance Committee, advised, "Your request has to be made before you get here, because when you get here, you aren't going to get it."
When Sen. Donald "Ducks" Cole reminisced about his younger days working as a waiter and dive assistant and expressed the desire to "recapture our proud past and service," deJongh responded: "I don't think there is any way that we can recapture the past." Years ago, he said, the Virgin Islands had little competition for tourist dollars. Now, islands that formerly had bananas, nutmeg or sugar as their cash crop are aggressively courting tourists instead.
Doumeng said all of the off-shore offices but New York and maybe L.A. should have been closed by now, and the New York one could be moved to New Jersey "for a tenth the cost." In the Internet era, he said, "There is absolutely no business sense in doing what we are doing in the way we are doing it. This is an obsolete practice."
However, he added, closing the offices need not mean laying off the personnel. "Keep the people working," he said. "Put brochures in the trunks of their cars. . . and make them visit travel agents and go to trade shows."
Jackson said he hopes to have the Tourism website online by Oct. 1 and that then he will consider closing some of the mainland offices. Meantime, with regard to the New York rent, "I think I can cut it in half," he said.
Partisan perspectives remained firm with regard to the proposed $2.50 head tax for cruise passengers projected to bring $5 million a year into the government coffers. Sen. Roosevelt David said cruise lines have imposed surcharges in Alaska to cover pollution fines and those calling in the Virgin Islands recently added $3.25 per passenger to cover new federal fees and it hasn't hurt their passenger loads.
But deJongh questioned that lack of impact and said many local businesses depend on the cruise ship industry. "Are you going to manage $5 million going into the General Fund, or are you going to manage an economy that's sustainable?" he asked.
Problems with partnering
Jackson clashed with Doumeng and deJongh over the idea of a private-public partnership to manage the territory's tourism marketing expenditure of the hotel tax funds. "I am totally against it," he said of the private sector having a role in public policymaking. "If the government has to put up the majority of the funding, the government should be in control."
But deJongh said timely response is often critical to take advantage of opportunities, and "the government has to go through 14 steps to secure a document." Doumeng noted that "we do not spend one red cent of our own tax money" for advertising; Tourism Revolving Fund revenues come entirely from visitors.
Sen. George Goodwin, an advocate for decades of regional cooperation, noted that "the other Caribbean islands that are leaving us behind have tourism boards that are private-public partnerships." He also noted that in 1993 he introduced legislation mandating tourism education as a part of the public school core curriculum.
Doumeng said a dozen other islands utilize a gradeschool program, "Hello, Tourist," that was written by the late Betty Sperber, a St. Croix hotelier for many years. And yet, he said, the materials are not used in the territory. "We don't do any tourism education," he said.
Berry quoted Rudolph Krigger Sr., the governor's assistant for economic and fiscal affairs, as saying department heads are being told to adhere to the five-year plan in developing their 2001 budgets. She said it was her reading that Jackson "has not agreed to any of the things in the plan" except that the Tourism commissioner should not chair the Port Authority Board.
Despite the exchanges, Doumeng paid tribute to Jackson at one point, saying the two "may not agree on 100 percent of things, but we agree on 90 percent of them. He has done more to make my life easier in the last eight weeks than was done for me in the year and a half before."
And Jackson told the panel he has "a very good working relationship" with the hotel association.
In summarizing V.I. Carnival 2000, which suffered a $50,000 cut in government funding because of the fiscal crisis, Blake said, "We lost a great deal on this Carnival, but we feel the Carnival was a success." Callender told the senators, "I hope we can get the Legislature to reconsider to give us some funding so we can pay our bills."
Five-year plan proposals
The five-year plan recommends, with regard to the Tourism Department, that:
– the government consider imposing a fee on timeshare units that would go into the Tourism Revolving Fund;
– Tourism get its Internet site up, opting for a less-extensive web presence if the estimated $1.5 million cost cannot be met out of the General Fund;
– Tourism evaluate the cost-effectiveness of its agents in Puerto Rico, Canada, England, Ita
ly and Denmark, and of its offices in New York, Washington, Atlanta, Miami, Chicago and Los Angeles;
– Tourism assess the value of establishing a hospitality industry training school;
– Tourism consider adopting an official logo, to be licensed to businesses for reproduction on towels, posters, T-shirts and the like;
– the government remove the annual molasses subsidy from Tourism's General Fund budget (a carryover from the days when the department was Economic Development and Agriculture, and Tourism was a division within it);
– Tourism hire a professional convention planning service;
– Tourism develop a special events calendar with more private sector involvement;
– the government consider establishing a tourism authority with a public-private board of directors to develop and implement marketing financed by the Tourism Revolving Fund;
– the government consider moving the Film Promotion Office (a carryover from the ED&A days) to the new Economic Development Authority;
– the government consider talks with the Port Authority and The West Indian Co. about their assuming marketing and welcoming responsibilities at the airports and cruise ship docks, respectively;
– the law be changed so that the Tourism commissioner is not the chair of the Port Authority Board and the Industrial Development Commission (another ED&A carryover);
– a 501 (c)(3) not-for-profit entity be established to promote cultural heritage tourism.
