May 13, 2003 – The territory's Tourism Advertising Revolving Fund has collected almost $2 million more so far this fiscal year than in all of 2002, according to Tourism Commissioner Pamela Richards.
But hospitality industry leaders told the Senate Committee of the Whole on Tuesday night that the Virgin Islands has failed to keep up with tourism revenue growth in other Caribbean destinations over the last 10 years and has, in fact, lost ground.
Thirteen senators and a roomful of private-sector representatives were on hand for the public hearing on St. Croix on the proposed V.I. Tourism Authority that would take on the duties of the Tourism Department. It would be governed by a board consisting of six private-sector representatives and three government officials.
Fred Laue, president of the St. Croix Hotel and Tourism Association, said that 10 years ago the Virgin Islands had 60 hotels with 4,328 rooms. As of last year, he said, those numbers had shrunk to 47 hotels with 3,991 rooms.
Louis Willis, director of the Internal Revenue Bureau, had stated at an economic issues forum Saturday on St. Thomas that the territory has 5,200 hotel rooms.
The average occupancy rate in 1993, Laue said, was 60.9 percent, while last year it was 57 percent. "The average occupancy rate for most Caribbean islands is approximately 75 percent" at present, he added.
David Yamaha, St. Thomas-St. John Hotel and Tourism Association president, said air arrivals to St. Thomas have "floundered for more than 10 years" and what until now has been the upward trend of cruise arrivals to his island has become "increasingly unstable."
Before 1989, Yamada said, the V.I. economy moved in sync with the national economy, basically lagging by six months. This, he said, is no longer the case. The United States' unprecedented economic gains of the 1990s were not felt in the territory, he said, making economic indicators for the nation unreliable to the Virgin Islands.
"We need to take a pro-active approach to ensure the future of our tourism industry," Yamada said. Elsewhere in the Caribbean last year, he said, island destinations such as Aruba, the Caymans and Sint Maarten experienced double-digit growth, while the territory showed a loss of 8.1 percent.
Richards said travel is declining throughout the region and globally. The Tourism Department "has delivered well for the Virgin Islands."
The territory's hotel associations and chambers of commerce support the creation of the proposed tourism authority as a means of ensuring input on the spending of government tourism marketing dollars. But Richards said that, without such an authority, the private sector is already involved in decisions about marketing the territory, as her staff members meet with "just about every private-sector organization in the territory."
Richards also questioned the legislation's definition of "tourism authority." In other jurisdictions, she said, the term refers to a marketing and promotional arm of existing government entities. This argument also has been advanced by Gov. Charles W. Turnbull, who announced at a press conference last month that while he supports a tourism authority, he never envisioned such an agency replacing the Tourism Department. He cited the Bahamas, the British Virgin Islands and Barbados as examples.
"Formulating a tourism authority is not a bad circumstance," Richards said Tuesday. "I don't believe that I've ever heard anyone state that our private sector should not have a voice in the marketing decisions of the territory."
All of the hospitality industry representatives offering comments Tuesday said a business partnership with the government is the way to make progress. "The largest single deterrent to the growth and vitality of tourism," Laue said, "is the disjointed efforts of the many different tourism-related organizations, including the Department of Tourism."
Yamada said the private sector already spends about $30 million yearly to market the territory. "At the end of the day, our goals are the same" as the government's, he said, "and that's to grow the V.I. economy."
Cassan Pancham, St. Thomas-St. John Chamber of Commerce president, said the private sector is not interested in eliminating the jobs of Tourism Department employees. "Under the bill they would all be transferred to the authority," he said. "Let us once and for all debunk this myth."
The bill further provides that if any Tourism positions become redundant under the tourism authority, those employees will be transferred to other departments.
The makeup of the authority board continues to be a stumbling block. The bill as introduced called for a board with five public-sector members and four business members, all to be appointed by the governor, with the hotel associations and chambers of commerce each to "recommend" a member to the governor. The private-sector members would require Senate confirmation.
The bill was amended in two Senate committees to replace two of the government members with representatives of the taxi industry from each district. Turnbull has objected to a private-sector majority and two years ago vetoed a bill passed by the 24th Legislature creating such an authority. Several of the business leaders testifying Tuesday said they would be willing to compromise on that issue.
"We may have gone too far with the proposal for the private-sector majority on the board," Pancham said Tuesday. "We're willing to modify our position on this issue."
Sen. Luther Renee spoke in support of the authority. "The very destinations that we claim are our competitors, and the very ones whose growth has surpassed ours, have tourism authorities. That should tell us something," he said.
The Committee of the Whole will reconvene at 6 p.m. Wednesday on St. Thomas to continue taking testimony on the measure.
Present at Tuesday's hearing were Senate President David Jones and Sens. Norman Jn Baptiste, Lorraine Berry, Douglas Canton, Roosevelt David, Carlton Dowe, Emmett Hansen II, Louis Hill, Shawn-Michael Malone, Luther Renee, Raymond "Usie" Richards, Ronald Russell and Celestino White. Absent were Sens. Adlah "Foncie" Donastorg and Almando "Rocky" Liburd.
Publisher's note : Like the St. Thomas Source now? Find out how you can love us twice as much — and show your support for the islands' free and independent news voice … click here.
