Home News Local news Slowdown in Economy Expected to Impact V.I. Tourism

Slowdown in Economy Expected to Impact V.I. Tourism


March 3, 2008 — Hotel bookings for the next few months have slowed compared to last year, some hoteliers said.
"It's election year and the economy," said Lisa Hamilton, president of the V.I. Hotel and Tourism Association.
Hoteliers began to see the slowdown starting in October 2007, she said. There are also early indications that visitors are spending less on things to eat and drink.
Food and beverage receipts are well off last year, said Joel Kling, manager at the Best Western Emerald Beach Hotel and Best Western Carib Beach Hotel on St. Thomas.
"They don't spend as much, especially for dinner," he said.
While he initially thought the March occupancy rate would hit 84 percent, Kling has revised his estimate to 76 to 78 percent.
"I think there's starting to be a little pinch in the economy," he said.
He has focused on things like customer service to bring guests back. Emerald Beach had a massive renovation that includes items like flat-screen televisions, new linens and travertine floors in the bathrooms in an effort to bring guests to the hotel.
Hamilton, who until recently served as marketing director at Marriott Frenchman's Reef Beach Resort on St. Thomas, last week took over the Hotel Association presidency. She isn't up to snuff yet on the upcoming picture for the entire territory, but said Frenchman's Reef will benefit from group business in the second quarter.
This slowdown means hoteliers have to be proactive in their promotions, Hamilton said. The territory's spring, summer and fall promotions will be announced this week, a positive development, she said.
"We got into the market early," Hamilton said.
Guests have gotten savvy about booking late, with many waiting until between 45 days and the day of their arrival to make a reservation. They book their airfare, then wait to see which hotel is offering what deal before deciding where to stay, Hamilton said.
"Consumers are trained to do that," she said, citing Priceline and late-booking websites as the reason.
Seventy percent of travel consumers make their buying decision by looking at websites, with "the high 30s to low 40s" booking online, Hamilton said.
At the Divi Carina Bay on St. Croix, manager Pat Henry agreed that guests are now shopping online.
"You get on the Internet, you don't have to call anybody and you don't have to go through a travel agent," he said, adding that he now books his hotel stays the same way.
Henry also agreed that guests are now booking last minute. Two or three years ago visitors booked in advance, but now he sees about 40 percent of his business booked during the month the visitors arrive.
Henry doesn't expect this spring to be nearly as good as last year. He summed up last spring and early summer's excellent occupancy rate across St. Croix with one word: "Hovensa." The oil refinery was in the midst of a project, and workers filled the island's hotel rooms.
That said, Henry still expects the hotel to do well because of the Easter holiday and the Tourism Department's promotions. In addition to participating in that promotion, the Divi is part of the Caribbean Marketing Initiative, as well as the Divi chain promotion.
"It gives me exposure and I reach different markets," Henry said.
At Caneel Bay Resort on St. John, Manager Nikolay Hotze said this year's early Easter — March 24 instead of a more customary April date — hurts April occupancy rates.
"And the challenges will come in the summer if a recession comes," he said.
About 75 percent of winter visitors book a year ahead, but like other hoteliers, Hotze foresees late booking for the rest of the year.
"Last year, we saw two weeks, three weeks out," he said.
On St. John, early Easter is having an impact at Maho properties, but late bookers will help improve the projected outlook, said Melody Smith, marketing manager for Maho Bay Camps. Families tend to book far in advance, but others who can be more spontaneous decide they want to escape the wintry chill, she said
"So they head to the Caribbean," Smith said. Others are looking for a deal, so they wait till the last minute, she said.
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