Aug. 16, 2001 – "Good news" tourism statistics released by Government House Wednesday paint only part of the picture, the presidents of the territory's hotel associations agreed Thursday.
Citing government Economic Research Bureau statistics, Gov. Charles Turnbull said the number of visitors arriving in the territory during the first half of this year was up by 14 percent from the same period last year, to a total of 1.46 million. The figure includes arrivals by both air and sea.
"Concentrating on head counts is how to lie with statistics," countered Richard Doumeng, president of the St. Thomas-St. John Hotel and Tourism Association.
Wendall Snider, president of the St. Croix Hotel and Tourism Association, called Turnbull's claim that the territory's tourism picture is steadily improving "a trip to fairyland."
Snider and Doumeng both pointed out that two of the territory's small hotels recently closed — the 12-room Admiral's Inn on St. Thomas and the 8-room Sea View Farm Inn and its restaurant, Bandanas, on St. Croix.
Saying he fears that such closings may become a trend on St. Croix, Snider noted that smaller properties are the first to feel the pinch in economic downturns. They typically are independently owned by people without the financial resources of hotel chains. "The question is, how deep are their pockets?" he said.
Doumeng said the Economic Research Bureau uses inadequate methods to count people. The numbers don't take into account travelers' ultimate destinations — St. Thomas "arrivals" include a high percentage of people who stay with family or friends as well as people headed to the British Virgin Islands. And the St. Thomas/St. John district statistics do not separate St. John from St. Thomas. This means St. John tourism professionals have no count of how many people have the island as their destination.
In the case of St. Croix, the statistics include the large numbers of arrivals who are heading to work at the Hovensa coker construction project. While some of these workers stay at hotels and condominiums, many are housed in accommodations on the Hovensa property.
Snider, who runs the 38-room Hibiscus Beach Hotel, said that his hotel is running at 50 percent occupancy, but that 40 percent of those guests are on St. Croix in connection with the Hovensa project. While these guests help his occupancy rate, Snider said, they do not for the most part spend money on hospitality-oriented items as tourists do. "Taxi drivers don't get the revenue. Restaurants don't get the revenue," he said.
He said the Hovensa construction workers typically cook for themselves or eat at low-budget restaurants because they get a set food allowance.
Stays are shorter, rates are down, costs are up
Other factors also are hurting hoteliers' bottom line. For one thing, the average visitor stay has gotten shorter. Doumeng said many people now come for only a few days. "Instead of six nights, they might stay three nights," he said.
Doumeng, who manages Bolongo Bay Beach Club and Villas, said that his guests are spending more at the resort's restaurants because they don't venture off the property the way visitors used to. "They don't get rental cars. They don't eat at Craig and Sally's," he said, referring to an upscale Frenchtown restaurant.
To stay in business, Doumeng said, he has slashed rates. When he started working at Bolongo in 1989, the summer rate was $175 a night. Twelve years — and many cost-of-living increases — later, it's $165 a night. Operational expenses have escalated in those dozen years. Property insurance now runs him $190,000 a year. In 1989, it was $36,000. And Water and Power Authority costs are "through the roof," he said.
Doumeng pointed out that the drop in room rates means that the government is getting less money in gross receipts taxes and hotel occupancy taxes.
Actually, the Economic Research Bureau statistics show little change in the numbers of visitors arriving in the territory by air. For St. Thomas, the total from January to June of this year was up 4.1 percent, to 282,161, over the same period last year. In St. Croix, the total number of air arrivals rose by 1.7 percent, to 79,705.
Cruise ship arrivals for the same six-month period showed bigger gains. For St. Thomas/St. John, the number arrivals increased by 12.7 percent, to 1.05 million. On St. Croix, the increased 17.2 percent, to 148,164.
Mike Daswani, who owns the Royal Caribbean camera and electronics shops on St. Thomas, said his revenues were up slightly the first half of this year, but not significantly. "The increase in ships did help," he said.
Cruise ships account for most of the increase
For the first six months of this year, the territory's hotel occupancy rate stood at 67.8 percent, just a tick above last year's 66.3 percent. For St. Thomas/St. John the rate was 71.4 percent, up from 69.4 percent last year. For St. Croix, the rate barely changed, at 56.5 percent from January to June this year, compared to 56.4 percent for the same period last year.
The Government House release also noted that the percentage of tourists from Canada, Europe, Central America and South America registering at V.I. hotels in the first half of this year was down from the corresponding period last year. The numbers dropped by about one-third in the case of Europe and Central America, and 25 percent in the case of South America, it said.
"We are pleased that the economic indicators reflect that we are presently exceeding tourism-related activity achieved during 2000 when we experienced a banner year," the release quoted Turnbull as saying.
Tourism Commissioner Pamela Richards did not return a telephone call requesting comment.
