June 12, 2002 – Edward E. Thomas Sr., president and chief executive of The West Indian Co., had some heartening news for St. Thomas and even some hope for St. Croix on Wednesday as he provided an overview of WICO at the Senate Finance Committee's second Fiscal Year 2003 budget hearing.
Thomas's expressed hope was for St. Croix is the return of Carnival Cruise Lines — but he said there's a big catch. First, it is contingent on the Port Authority rebating a share of its revenues back to Carnival Cruise Lines in return for the company resuming calls to the island.
But that's just one part of a three-pronged plan Thomas outlined to lure cruise ships back to the port of Frederiksted. Parts 2 and 3, he said, are cleaning up crime and providing specific infrastructure improvements already agreed to by the V.I. government in the long-term operating agreement it entered into last year with the Florida-Caribbean Cruise Association and its member lines.
Thomas explained that WICO gets a wharfage fee of $3.50 for each passenger who alights on the WICO dock, and VIPA gets $4 per passenger aboard each ship, whether the person disembarks at WICO or at the Crown Bay dock.
He said that 500,000 passengers are anticipated for the summer season, all of them aboard ships scheduled to tie up at the WICO dock. He said Crown Bay had its last ship on April 26 and won't see another until Oct. 31.
According to Thomas, 85 percent of WICO revenues comes from fees charged for the use of its property, and about 15 percent comes from being the agent for all ships in the St. Thomas-St. John district. WICO does the billing collection and disbursement work for all of the vessels, he said, and disbursed in excess of $8 million in passenger fees to VIPA last year.
He said there has been "a lot of unnecessary discussion recently" about whether St. Thomas is still a major destination in the Caribbean. He quoted a recently concluded study by the Florida-Caribbean Cruise Association on the economic impact of passenger and crew spending in Caribbean cruise ports.
The report said that while "traditionally St. Thomas has been the world's most famous cruise destination," Nassau in the Bahamas was a close second in 2001, with each receiving about 1.8 million passengers. But it said that Cozumel, which welcomed 1.6 million passengers in 2001, has been the fastest-growing cruise destination in the last decade — and it's projected to surpass St. Thomas this year to become the No. 1 cruise port in the world.
However, Thomas said, passenger numbers do not tell the whole story of the impact of ships on the local economy; spending ashore by passengers and crew determines the strength of a particular destination. He said 1.8 million passengers plus crew create $1.1 billion worth of retail and tour activity.
And among ship's crew, he said, the F-CCA study found that spending on St. Thomas had increased to $108.40 per crew member per day from the $90 that WICO reported in its 1999 study.
Thomas reminded Sen. Alicia "Chucky" Hansen, Finance Committee chair, that a year ago he had projected 1.9 million passengers for St. Thomas by the end of 2001 and 2 million for 2002. Those projections came before the Sept. 11 terrorist attacks on the mainland and the subsequent sharp drop-off in U.S. travel outside the country in the weeks that followed.
Still, Thomas said, a comparative analysis for the last two fiscal years showed St. Thomas in a "very good" position, despite a decrease of 15 percent related to Sept. 11. He said he expects to end the fiscal year with approximately 1.75 million arrivals. "We closed the month of May with 101,000 passengers so we are cautiously optimistic," he said.
Under questioning, Thomas predicted that "the industry will turn around, with a 12 percent increase in passenger arrivals by the end of FY 2003."
Hansen urged Thomas to use his resources to tell the cruise industry that St. Croix is part of the Virgin Islands. She said, "It's all the V.I. You want to divide it in two." Thomas agreed that St. Croix should get more attention.
Thomas cited his disappointment at VIPA's recent decision to proceed with Crown Bay development on its own. Gov. Charles W. Turnbull said in March that he would "instruct" VIPA to cancel its agreement calling for Royal Caribbean Cruises Ltd. and Carnival Corp. to invest $31 million in expanding the dock and building a retail facility. Turnbull said he wanted to leave control of the harbor in the government's hands and, again, said he had "instructed" VIPA to work with WICO to develop the area.
Thomas said Wednesday that WICO's offer still stands to lease the Crown Bay site from VIPA for $1 a year for 20 years and then develop it with WICO funds.
Sen. Donald "Ducks" Cole was skeptical of the idea of rebating VIPA revenues to Carnival Cruise Lines. "I don't think we ought to further erode VIPA revenues," he said. "We would have to look at VIPA's ability to carry its load. This needs to be looked at very seriously," he said.
Thomas replied that the government needs "to be creative" with its revenue sources. He said that in the eight years since he became WICO's chief executive, the company has utilized creative financing that has allowed it to grow.
On March 15, the West Indian Co. reported a net income from operations of $3,134,573 to the Public Finance Authority, which owns it. WICO paid $500,000 into the General Fund in lieu of taxes. On May 30, WICO issued an $800,000 dividend check to the PFA.
WICO manages the Havensight Mall for the Government Employees Retirement System. Thomas said the property has returned in excess of 13.5 percent on investment for the last few years. For FY 2001, he said, WICO collected $7.3 million in gross rents at the mall and turned over net profits of $4.6 to GERS.
Since its purchase in June 1993, the mall has earned $35.8 million, Thomas said, all of which has been turned over to GERS.

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