Nov. 8, 2005 Celebrating the now mutually rewarding relationship between the cruise and hotel industries, Ed Thomas, West Indian Co. Ltd. president, and Beverly Nicholson, V.I. Hotel and Tourism Association president, gave members and guests of the Ad Club of the V. I. a close up look at the coming tourism season Tuesday.
And the season looks good. Very good.
Thomas said that passenger spending at the end of fiscal year 2005, which ended Sept. 30, was at $281 per person and $305 per person in the St. Thomas-St. John district. It is the highest in the Caribbean. As a result, he said, gross receipt taxes, a major indicator of retail activity, increased from $100 million for FY 2003 to $114 million for FY 2004, and to $125 million for FY 2005. "This is an increase in taxable spending of $300 million in each of those years," Thomas said, "or a total of more than $600 million over the three-year period."
He said it is "obvious" that the St. Thomas-St. John district has fully recovered from the tourism decline that started after Sept. 11, 2001. And he described a recent boon to the district, a "homeland cruising" scheme that the cruise lines instituted three years ago. Thomas said it takes a vessel two days to sail from the mainland to the eastern Caribbean. Under this new scheme the vessels come direct to St. Thomas without stopping in San Juan first.
"Now, most vessels steam directly into St. Thomas," he said, "arriving here early and spending the day before going to our major competitor, St. Maarten." As an example, Thomas said, "of the 71 calls this month, 59 will stop in St. Thomas first, and12 in St. Marten."
Emphasizing the importance of tourism to the territory, Thomas quoted the latest report from the Department of the Interior. "It states the gross territorial product in 2004 was $2.5 billion, and tourism accounted for 60 percent of that figure," he said, though he said he thought the actual figure is closer to $3 billion.
Nicholson said hotel occupancy growth increased from five to seven percent in 2004, and the trend has continued in 2005, indicating an 80 percent occupancy rate for the final quarter of this year, and a projected 85 percent rate for the first quarter of 2006.
"This is fantastic progress," Nicholson said, "but we can't rest on our laurels." She said that the HTA, partnering with American Express, is offering a $100 gift card good from Jan. 2 to Feb. 8, with a $500 passport to saving added.
Thomas gave a brief history of the sometimes chilly relationship between the cruise and hotel industries. He said he was "pleased" to be speaking with Nicholson Tuesday, because in the past the two industries in the Caribbean "were at odds over what was perceived to be an intense competition between them."
By the '90s, Thomas said, "managers and attitudes in both sectors changed and there was a realization that both sectors could be complementary to the entire product." The Florida Caribbean Cruise Association (FCCA), started a series of regional conferences in 1994 in Barbados. By the time the third conference was held on St. Thomas in 1996, "there was a complete realization that cruise passengers were an important source market for hoteliers."
St. Thomas, Thomas said, was the first destination to take advantage of the new partnership by establishing a tourism desk in the Cruise Ship Welcome Center at Havensight Mall.
A few years later, he said, the Hotel Association, the Department of Tourism, WICO, and Tropical Shipping embarked on a new strategy. Coins were given out to cruise ship passengers with a Web site on its logo so passengers returning home could follow links to hotels and other land-based attractions.
The strategy evolved into what Nicholson describes as the Cruise Conversion program.
"The program," Nicholson said, "enables us to create a database with literally thousands of names, addresses and e-mail information. The travel and tourism industry spends millions to identify qualified customers.
"About 18 percent to 25 percent of overnight visitors initially came to the V. I. on a cruise ship," she said. "The program is an incredible opportunity as approximately 1.8 million cruise passengers visit annually allowing us to target them for a repeat visit."
And, something new has been added. Nicholson said visitors to Magens Bay, which sees about 500,000 visitors a year, now receive the coins and sweepstake cards. The sweepstakes are a new marketing program where visitors register to win a free vacation which includes air, hotel accomodations, $1,000 for shopping and excursions.
In fact, the first sweepstakes winner landed on St. Thomas for a stay at Caneel Bay on St. John just a few weeks ago. (See "Contest Winner Lands on Island, Courtesy Hotel and Tourism Association").
Nicholson had one more piece of news. "Spirit Airlines just sent me an e-mail, and it said they made over 250 sales on its first day, which would fill a plane and a half. When that happens," she said, "you know your destination is cooking."
Spirit Airlines is a Florida-based airline slated to begin Ft. Lauderdale – St. Thomas service December 15.
Nicholson also said the HTA is sponsoring a customer service training program. "More than 500 hospitality employees have gone through the program so far," she said. "Our goal is 5,000 by the end of 2006." She said that all the promotions in the world won't see repeat visitors if they aren't backed up by excellent customer service. Nicholson said anyone can apply for the training course by calling the HTA at 774-6835.
And, back to the cruise lines, Thomas said several new ships will be calling on St. Thomas this season, including two from Norwegian Cruise lines, the Norwegian Spirit and its new flagship, the Norwegian Jewel, which will make its maiden call Thursday. We can also look for new entrants, the Carnival Liberty and the Noordam, Thomas said.
Thomas said the new Homeland Security regulations, enforced by US Customs and Border Protection, which adversely affect the local charter-boat industry in the V.I.,"will have no impact at all on the cruise lines."
He said, "The only real change with regulations after 9/11 was the request to limit our fence exits and entrances to one, but we now have the three or four that we need."
Lending a little veracity to the topics at hand, the luncheon was held in one of the spacious dining salons of Holland America Line's Zuiderdam.
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