USVI Tourism Continues to Rebound

USVI Tourism Continues to Rebound
By Aldeth Lewin

While the tourism industry in the US Virgin Islands is growing, visitor numbers and revenues still have not returned to pre-recession levels. Statistics released last week by the Bureau of Economic Research showed 2010 had a 13.5 percent increase in the total number of visitors to the territory, compared with 2009.

The number of people arriving through the territory's airports grew by 4.1 percent - about 27,300 more visitors arrived in 2010 than in 2009. The number coming in by cruise ship increased by 17.5 percent, 1.8 million cruise passengers arrived compared with about 1.5 million the year before.

The annual hotel occupancy rate increased slightly - from 54.9 percent in 2009 to 57 percent in 2010, but revenues remained flat. The Bureau of Economic Research measures the revenues gained through the 8 percent Hotel Occupancy Tax charged to each room night sold in the territory.

Annual hotel tax revenues peaked in 2008, before the recession took hold, at $18.4 million. Revenues in 2009 reached $16.4 million and actually decreased slightly in 2010 by about $15,700.

Lisa Hamilton, president of the USVI Hotel and Tourism Association, said hotels are trying to balance regaining room rates without sacrificing too much in occupancy. “We have a long way to go, and our expenses keep rising. We need to focus on enhancing the customer experience so our guests want to return,” she said.

The recently released data for January and February shows that occupancy is staying flat or even dipping compared with the previous year, but revenues are on the rise.

In January, occupancy and revenues were lower than the prior January. The number of room nights dropped from 102,260 in January 2010, to 89,808 this year, lowering revenues by 25.3 percent year over year.

In February, occupancy rates also were less than the previous year - yet tax revenues were up from $1.7 million to $1.9 million. While occupancy and revenues might have been down in the first two months of the year, arrivals were up.

In January, air arrivals increased only slightly - by 1.6 percent - but about 49,000 more cruise ship passengers entered V.I. ports compared with January 2010. In February, air arrivals fell by 3.9 percent but cruise passengers were up 16.6 percent compared with February 2010.

Hamilton said the territory is holding its own against other Caribbean islands because of the amount of flights into the territory island compared with other islands. She gave credit to Tourism for their ongoing efforts with the airlines.