Sept. 18, 2001 – The terrorist attacks on the U.S. mainland a week ago have taken the traditionally a slow month of September in the Virgin Islands and all but stopped it in its tracks, with hotels reporting dismal occupancy rates and consequent employee layoffs. However, the territory's private-sector leaders are mobilizing in an effort to come up with a workable plan to stay in business, save jobs and stabilize the local economy.
The general mood of hoteliers and retailers contacted by the Source could best be described as a stiff, but trembling upper lip in the face of what many see as imminent economic disaster with fewer flights to the territory and far fewer passengers.
Because of a severe drop-off in passenger loads nationwide, most major airlines have announced massive cutbacks in personnel and flights.
But the territory's business community is working to come up with a strategy to combat the effects of last week's tragic events, Richard Doumeng, president of the St. Thomas-St. John Hotel and Tourism Association, said.
Doumeng said officials of the territory's two hotel associations and two chambers of commerce had a conference via telephone Tuesday morning to set up meetings throughout the balance of the week to address the situation and come up with an action plan. "The meetings will culminate with a joint meeting with V.I. government economic and tourism officials to implement a plan to salvage our tourism economy," he said.
"At least with a hurricane, you can rally the troops, work hard, and have a foreseeable goal in mind," Doumeng noted. "This kind of devastation is absolutely beyond our control. There's no sugar coating."
The St. Thomas-St. John Chamber of Commerce distributed a release late Tuesday afternoon also noting the conference call meeting and plans to develop a plan and present it to government officials on Friday.
On Tuesday morning, it said, the chamber board "began to put in place a plan to address the territory's economic survival and sustainability in the wake of the attack on America." With the Virgin Islands dependent on tourism, John deJongh Jr., chamber president, said, "we have no choice but to develop a strategy that maintains our visibility and positions ourselves as a pre-eminent United States destination in the Caribbean."
The key challenge, de Jongh added, will be to do that "while at the same time working with local businesses to adjust to the challenges of a new economic environment." He also said, "This is the time for the government and the business community to work together in a spirit of cooperation and good faith."
Expectations were already low for fall
Doumeng made a point echoed by all hoteliers contacted: Even before last Tuesday's events, "We were braced for almost the worst September and October ever, with a softening economy and the airlines cap on travel agent commissions. It's an extremely tough time."
Carmelo Rivera, president of the St. Croix Chamber of Commerce, agreed with Doumeng's assessments. "We are deeply concerned about the impending crisis threatening us," he said. "We have already had discussions with businesses about what to do to reduce the economic burden on them. Right now, the Hibiscus Hotel has zero tourists."
Somehow, Rivera said, "We have to find some very creative ways to promote the V.I. "We have to get the public and private sectors working together to find things that may be helpful."
He suggested that "reducing the gross receipts tax might be a start." He said he talked on Monday with Ira Mills, director of the Office of Management and Budget, who was looking for economic indicators. "On St. Thomas on Friday we'll be putting our heads together with the tourism and the industrial sectors, as well as the government," the St. Croix Chamber president said.
The territory's mainland public relations agency, Martin Public Relations, circulated its routine "United States Virgin Islands Update" to the nation's news media Tuesday, its first release since the terrorist attacks. It consists of three short items about Mahogany Run Golf Course renovations and plans for a swimming competition in October and an arts and crafts festival in November.
Preceding the items is one paragraph stating that the territory "has increased security measures and exceeded all safety requirements," that its two airports "have met all Federal Aviation Administration requirements, and flights to and from the United States mainland have resumed." It advises the public to "contact the airlines and hotels directly for specific information."
Resorts have begun layoffs
Doumeng, who operates Bolongo Bay Beach Club and Villas, said the St. Thomas property has lost $40,000 in cancellations in the last six days. "That affects the taxis, the island restaurants, the tours," he said.
"We will know very soon if the traveling public is reassured enough to come to the V.I," he added. "We should have our advance deposits for the holidays in October, so that will tell us where we stand."
Bolongo has had to lay staff off, Doumeng said. "We've asked people to voluntarily give up shifts, and we've had to lay off 15 employees outright."
Bob Siefert, general manager of the Divi Carina Bay Resort on St. Croix, put Divi's status succinctly: "We are dead." He added, "We have less than 10 percent occupancy and no advance bookings coming in right now. We had 38 no-shows over the weekend."
Siefert, like Doumeng a veteran V.I. hotelier, said the Divi, too, has started the layoff process. "It's a situation we look at day by day," he said, "but if there is no turnaround, we are looking at pretty big layoffs. We have 142 employees — and that's a kind of ratio of employees to hotel guests that the Four Seasons on Nevis doesn't even have."
Expressing a thought on many Crucians' minds, he added, "I hope American doesn't pull out our one non-stop from Miami." American Airlines has already announced a 20 percent cutback on flights worldwide.
Two relative bright spots
Another St. Croix resort reported a much brighter picture. "We haven't seen any major drop-off in occupancy or reservations," Chris Goodier, public relations manager for the Buccaneer Hotel, said. "It's been pretty stable. It's the off season anyway, and we weren't anticipating a big month. Some guests weren't able to get here, but we're working with them." Goodier said the Buccaneer doesn't anticipate any layoffs for now.
The Westin Resort on St. John and the Buccaneer were the only hotels reporting positive news. "We are only slightly affected," Graham Davis, Westin director of operations, said. "We were low to begin with for the month, so we have had just a slow drop-off. We are prepared for slow season, and we are not planning to lay anybody off at this time."
The Holiday Inn/Windward Passage Hotel on St. Thomas "had 100 percent no-shows last week, and about 50 percent now," general manager Wein Dimetros said. "We're trying not to have any massive layoffs. We are watching week by week and asking employees to take a voluntary leave of absence. We are working with a skeleton crew now, and hoping against hope that things get better. We shouldn't panic."
Michael Rock, hotel manager of the Marriott's Frenchman's Reef and Morning Star Beach Resorts, was cautious. "Obviously, with air travel grinding to a halt, like all hotels we've had short term cancellations," he said, adding, "It's slow this time of year, anyway."
He noted, "We have a thorough cost-containment plan to address all costs associated with running the hotel. I don't want to use numbers b
ecause they can be misleading, we're not sure what they reflect." He added, "We don't know what the long term will hold. I don't think anybody knows."
Two major retailers report no layoffs
Two of the island's major retailers told a somewhat different story. Darr Conradson, vice president for marketing at Little Switzerland, which has four shops on St. Thomas, said, "If this were February or March, it would be extremely devastating, but September is traditionally slow." He said the company is "not looking at any layoffs now," in the Virgin Islands, but noted that traditionally employees who have worked in Alaska during the summer come down to the territory in November.
"I'm encouraging everybody to go out for lunch, support the downtown merchants," Conradson said. "I tell them, don't go home for lunch. The most important thing we can do is help each other." At Little Switzerland, he added, "We're giving red, white and blue ribbons to every customer who come in."
He said plans for a new boutique, possibly for Lalique merchandise, in space that had been a liquidation outlet store are progressing.
Little Switzerland is the only retailer in the Caribbean traded on the Nasdaq stock exchange, Conradson noted, "and we are completely American owned."
Bill Christie, director of Cardow Jewelers stores, said Cardow isn't laying people off. "I've heard the store is having layoffs and that the managers are being asked to take a 10 percent cut. None of that is true," he said.
Calvin Wheatley, spokesperson for the West Indian Co., said the two cruise ships in port on Monday were far from full. The Monarch of the Seas, with a 2,534 passenger capacity, carried 1,523; and the Carnival Destiny, with a capacity of 2,766, carried 2,117.
But, Wheatley added, "We feel that people simply couldn't get to their ports, with the airline situation."