Recent tourism figures paint a contrasting picture of the industry in the V.I., with Bureau of Economic Research statistics showing a surge in visitors in 2000. But hoteliers insist that has not translated into more overnight stays and that the room tax hike approved by Gov. Charles W. Turnbull will be "devastating," costing them hundreds of thousands of dollars in the coming months.
According to the bureau, now part of the V.I. executive branch, air arrivals were up by 12.4 percent in 2000, while cruise-ship passenger arrivals grew by 26 percent.
But the St. Thomas-St. John Hotel Association said in a statement Friday that several hotels indicate business is slowing. Carter Donovan, Ritz-Carlton general manager, cited some shocking figures.
"At our recent regional meeting it was stated that new group and incentive business is down 51 percent, and transient business travel is down by 60 percent," she said. "Our customers are more value-conscious, and both companies and their employees are looking at every dollar being spent."
In its statement, the association said it had been unable to find out from different government agencies when the tax hike will go into effect. But if it takes effect anytime before June 1, the effects, the association said, will be "devastating."
Richard Doumeng, president of the St. Thomas-St. John Hotel Association, made a "conservative estimate" that the tax hike will cost members on the two islands about $100,000. St. Croix Hotel Association president Wendell Snider said this tourist season is already running behind last year's and the tax increase will only make things worse.
The increase in the room tax here, from 8 percent to 10 percent, makes it the highest such rate in the Caribbean apart from Mexico, according to the Caribbean Hotel Association. Only the Cayman Islands and Trinidad and Tobago have comparable room tax rates. By comparison, the British Virgin Islands' room tax is 7 percent.
V.I. government officials insist that if the number of visitors drops and tourism suffers, the culprit will be continued high airfares, not the room tax, which they estimate will now bring in about $3 million more annually for the Tourism Revolving Fund.
The jump in the room tax particularly rankled hoteliers because it was coupled with the governor's refusal to create a semi-autonomous tourism authority. Instead, Turnbull said he will create a tourism advisory board and name its members.
Turnbull said he vetoed the tourism authority because it would vest too much power in a community board without enough public-sector involvement. He also said eliminating the Tourism Department "overnight" was not prudent and called for more study.
"It's a crime. It's a tragedy. It's illogical," Snider said earlier this week. "The governor turned his back on the hotel industry."
On Tuesday, Senate Finance Committee Chairwoman Alicia "Chucky" Hansen vowed she would seek the 10 senatorial votes needed to override the governor's actions on tourism.