This entry comes from a post made on my now defunct former blog back in June of 2006.
I read an article on heartbeatnews.com on Bermuda tourism the other day that contained a few very interesting statistics. Apparently, in 2005, we had the highest level of visitors in 2005 with a total of 521,043 arrivals by air and sea. Air arrivals reached 269,587, down marginally. Cruise arrivals rose by 20% to 247,259. Tourism earned a total of $448 million with an estimated $39 million in revenues coming from cruise visitors. It then pointed out that this is less then 10 percent of overall spending.
Let’s take a moment to think about this for a second. Cruise arrivals accounted for nearly HALF of incoming visitors yet earned us less then 10 PERCENT!?! Looking at Bermuda as purely a business, I’d have to say I really don’t like those numbers; this venture doesn’t seem profitable at all.
Let’s compare Air earnings to Cruise shall we?
$39 million / 250,000 = $156 a person approximately
$409 million / 270,000 = $1515 a person approximately
So using these numbers, let’s assume we invest $50 million into tourism hoping to revitalize it. I’ll suggest a couple projects which that money could be used to boost numbers on one side or the other. For Cruise, let’s assume we use it to construct new docks and for Air, say a conference center.
So let’s figure out how many more people we need to bring in to recoup that cost for our people.
$50 million / $156 = 320,000 people approximately
$50 million / $1515 = 33,000 people approximately
So, if we wanted to recoup our investment, how much of a gain in each industry will we need to see?
Over 1 year: (320,000 / 250,000) x 100 = 128% increase
Over 5 years: (320,000 / (250,000 x 5)) x 100 = 26% increase
Over 1 year: (33,000 / 270,000) = 12% increase
Over 5 years: (33,000 / (270,000 x 5)) x 100 = 2.4% increase
I’m no rocket scientist, nor am I a CEO of a super rich reinsurance company, but to me, if Bermuda were my business, it would seem that it would be a hell of a lot better to invest my money in Air and not even bother with Cruise. That’s not even considering the costs in terms of the people that flood our beaches, our roads, contribute to waste and take up spots in valuable activities that should instead be going to air visitors who earn us a good deal more?
If someone would be so kind, please explain to me why we’re even remotely considering building new docks for super ships as part of the waterfront revitalization plan? Why are we also planning to destroy our heritage so that town cut can be widened?
Hell, if you can tell me that, perhaps you can also tell me why we’re even bothering to compete with the sun and fun tourism industry in the first place? Our peak season is the Caribbean’s off season and frankly 4 months of sun worthy weather just doesn’t cut it in terms of competition.
If it were up to me, I’d be chasing the business rewards, international conferences, trade shows and incentive planning industries instead. We are after all an international business center. We also happen to be a short hop from the east coast, and businesses just happen to have the money to spend where “discount tourism” just doesn’t cut the mustard in comparison. On top of that we’d get free advertising in terms of inviting more business to locate here, if we so desired to let them, that is.
Why is targeting business an easier sell? Businesses give expense accounts to their traveling employees. Foreign companies are taxed on profit so if you can write off expenses and lower your profit; you don’t get taxed on it, and happier employee’s too boot. What better way to reward your workers then sending them to a conference in beautiful Bermuda?
I just don’t understand it why Vegas needs to be the only place where all the big conferences go. Wouldn’t people enjoy coming to a destination like Bermuda? Perhaps if we build a conference center or two, pandered to the industry a little, and capitalized more on our location, location, location… tourism wouldn’t be such a dead industry and we’d actually be running a profitable business.