Jan. 20, 2006 – An increase in cruise ship calls to St. Thomas during summer 2006 could cause a spike in the territory's revenues, said Ed Thomas, president and CEO of the West Indian Company Ltd.
Thomas spoke about WICO's projections for the upcoming tourism season at a St. Thomas Chamber of Commerce luncheon Friday at the Holiday Inn Windward Passage Hotel. He said he decided to speak at the meeting because a number of St. Thomas retailers experienced a dip in their revenues over the past year because fewer ships were coming to the island.
At a Senate meeting in July, Thomas predicted that the island would be seeing a slower summer season in 2005. He said that after the 9/11 attacks, many companies decided not to build new cruise ships until late 2005 or early 2006. He also said that cruise lines have recently begun to market internationally, organizing trips to Europe and Asia instead of the Eastern Caribbean.
During Friday's meeting, Thomas said the summer of 2006 should be different, since more ships are being built and contracted to visit the Virgin Islands. Thomas additionally projected a total number 192 cruise ship calls during the upcoming season as opposed to the 159 calls to the island in summer 2005.
However, the appearance of new ships does not mean that there is no cause for concern. After Friday's meeting, Thomas said that some ships with larger passenger capacities are being pulled from V.I. routes, and are visiting new ports on islands like Dominica, Grenada and St. Vincent. Other ships, such as the Queen Mary, will be taking on new routes after final visits to the V.I. within the next year.
Furthermore, he said some cruise lines are replacing two ships that frequent the V.I. with one new ship. Vessels such as the Dawn Princess and Star Princess, for example, will be replaced with the Crown Princess, a new flagship, which would make year-round calls starting at the end of June.
During the meeting, Thomas also said some cruise lines are expanding their itineraries to include new ports of call without building new ships.
"That is something that would take business away from us as well," he said.
As a result, Thomas said that there would be days during the upcoming summer season where the island will have no ships.
"But we will make up for that by having multiple ship calls on other days," he said.
Thomas said passenger spending hit a high of $305 per person, per trip in the St. Thomas-St. John district. This has further contributed to an increase in gross receipts taxes, which topped $125 million for the fiscal year that ended on Sept. 30.
He said that gross receipts taxes have recently continued to climb.
"For the first three months of this fiscal year – October to December – the Internal Revenue Bureau has reported that gross receipts tax collections were more than $30 million compared to the $24 million collected during the same period in fiscal year 2005," he said.
However, while Thomas said gross receipts taxes are a "major indicator" of what's being generated in the territory from retail activity, many business owners attending Friday's meeting still had concerns. One store owner, for example, said that her revenues recently decreased by 50 percent, while another owner asked Thomas what could be done to protect businesses from any future losses.
Thomas said that WICO is currently in negotiations with some cruise lines to get ships to extend their visits to the territory. That means that instead of leaving around 5 p.m., some vessels will stay in St. Thomas until as late as 1 a.m.
"This is something that we've been pushing for a long time," Thomas said. "And I think that it would mean a tremendous economic boom because it would offset the loss of the ships. Plus, the cruise lines will be able to save on the cost of fuel since they won't have to be floating around in the ocean for hours during the night."
Thomas added that he is looking into negotiating the building of a "crew club" at the WICO-owned Havensight Mall.
"It's important that we follow the trends, here," he said. "The market is changing, and that means we have to change too."
After the meeting, Thomas said that the territory's retailers should also make a change by swapping some of their old merchandise with jewelry, clothes, and electronics to suit a new group of passengers.
"Some of these new ships are coming from places like New York, and are bringing a different class of people to the islands. We have to bring in goods which will cater to a new passenger profile," he said.
Thomas also took time to answer questions about the status of the proposed road project in the Havensight Mall area and the construction of a new dock at Crown Bay.
He said he could not give any specifics with regard to the road project – a highway that is supposed to extend from Havensight to the Lucinda Millen Home.
"I know that the project was supposed to have gone up for bid in January, but I don't know whether that has been done," he said.
Thomas said that the new Crown Bay dock was a "bad investment."
"There will never be enough traffic in terms of ships docking at Crown Bay to justify the building of this facility," he said. "WICO always has the information in advance about the ships that are coming to the territory, and we know that location won't see much activity."
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