July 20, 2007 — While the number of visitors to the territory has continued to climb, revenue figures are down for the West Indian Co. Ltd., as a dispute between the agency and the V.I. Port Authority continues.
During the second round of budget hearings Friday, WICO Chief Executive Officer Edward Thomas said the exclusive agreements struck between the port and two premiere cruise lines have continued to divert ships from the Havensight Mall area on St. Thomas.
"As you are aware, our company lost two very important clients during this year when both Princess Cruise Lines and Holland America Cruise Line entered into 10-year berthing agreements with the V.I. Port Authority," Thomas explained. "Our analysis shows that our company stands to lose some $1.2 million in this fiscal year as a result of these agreements."
WICO will also suffer a loss of some 200,000 passengers, he added, which would add up to a $20 million reduction in retail sales, along with a decrease in the wharfage, docking and per-passenger fees the company collects from vessels berthing at Havensight.
As an autonomous agency of the government, WICO does not depend on local funding to sustain its yearly budget. However, the company is mandated to contribute $1 million annually to the General Fund — a contribution that Thomas said must be reduced in light of WICO's lack of revenues.
"We firmly believe that our payment … should be no more than 10 percent of our net profit, or $500,000, whichever is greater," Thomas said. WICO's remittance to the government has gradually increased over the years, after starting out at about $300,000, he added.
While it was not difficult for the company to sustain the payments in the past, the loss of ships has since decreased WICO's bottom line and stymied any increase in gross receipts tax collections, Thomas said.
"Passenger arrivals continue to grow, but gross receipts taxes — a good barometer of retail spending — have not kept pace this year with the increase," he explained. "We are of the firm opinion that a major factor is the movement of Holland America and Princess Cruise ships from the bustling Havensight area to the undeveloped Crown Bay area."
Senators had few questions for Thomas during Friday's hearing. But some, such as Finance Committee chair Sen. Terrence "Positive" Nelson, said the two agreements executed with the Port Authority would also continue to keep ships away from St. Croix, which is still hoping for a revival of its cruise industry.
Staying positive, however, Thomas said that a few new attractions in the Havensight area — such as the construction of the new Yacht Haven Grande facility, a sushi bar and the popular butterfly farm — is anticipated to bolster WICO's revenues and jump start a more successful 2007-2008 cruise season.
During this period, which spans from Oct. 1, 2007, to Sept. 30, 2008, the territory will receive more than 700 cruise-ship calls between the Havensight and Crown Bay docks, he said. Included in the lineup will be the Freedom of the Seas, the newly commissioned Emerald Princess and the famous Queen Mary 2, which will stop in the territory 15 times between November and April.
Present during Friday's meeting were Sens. Liston Davis, Carlton "Ital" Dowe, Juan Figueroa-Serville, Neville James, Terrence "Positive" Nelson and James Weber III.
Back Talk Share your reaction to this news with other Source readers. Please include headline, your name and city and state/country or island where you reside.
