Bermudians are to blame for the decline in tourism

No, the PLP is not to blame for the decline in tourism air arrivals.  They’re to blame for terrible misleading charts but not the decline as it is something that has happened since 1980.

The real hard truth is that Bermudians are to blame.  We can point the finger all we want at politicians but it won’t change the truth.

Oh, but it was 9/11 and 2 recessions.  Sorry to burst your bubble but no, it wasn’t.

The Caribbean Tourism Organization publishes extensive stats on it.  Unfortunately they used to be free and now they’re stupidly expensive so my alternative is to use google images search.

Here’s one.  Arrivals down in the recession?  Not much, spending was.  9/11 fear?  Only till 2004.


Some countries did just fine, like the Dominican Republic, Cuba and Jamaica.

Even Haiti saw improvement from 2006

Let’s stop kidding ourselves.  It’s not a “Platnium Period”, we haven’t set a “gold standard” and for the love of all that is holy it isn’t a “Tourism Renaissance”.

We’d be lucky to call it green shoots appearing long after we thought the plant was dead.

Who’s responsible?  We are.

This ridiculous chart shows how the PLP clearly destroyed tourism

Note: the chart and headline was intended as sarcasm to make a point about how charts and headlines can be misleading of the real story, not imply the PLP actually destroyed tourism.  In no way was it meant to be taken as fact as the chart only represents a small snapshot of a much larger decline (shown in the chart at the bottom) and the y-axis is set at 200,000 to make the decline seem more extreme.  It was only created in an attempt to illustrate my frustration with the PLP’s chart that also took only a snapshot and adjusted the y-axis to 200,000

The above chart clearly shows how the PLP destroyed tourism.  Note the heavy decline from 1998 and the flatline from 2009.  Obviously this chart makes it clear just how massive a decline there was from the UBP days to the PLP’s with 2006-2008 barely registering a blip over what the levels used to be.

Ridiculous misleading charts make me laugh.  For example, here’s the PLP’s version:

Of course the axis is set at 200,000 to emphasize the difference between 2007’s level and 2015’s.

Jahmal Simmons proclaims ‘Numbers Are A Return To Being Average’.  Sure they are.

Let’s be frank here.  When compared to historical figures, the OBA’s tourism numbers suck and the PLP’s numbers sucked.  They’re a shadow of what they once were.

The real question is:  What was the tourism budget and the corresponding visitor expenditure figure for each year?  Now that’d tell a real story.

Oh, and the BTA provided a much more comprehensive 0-based axis chart in their 2016 report that gives a much better picture of the long term failure of tourism.

Disrupting tourism: a ubiquitous platform

The tourism industry has a low barrier to entry and a high barrier to disruption.  Almost anyone can setup a fancy website with a shopping cart and start taking bookings online. Getting online seems incredibly easy, gaining traction, volume, distribution and a foothold isn’t.  This is why, despite many attempts otherwise, the tours and activities portion of tourism hasn’t been fundamentally changed by technology.  Many efforts to get tours and activities online generate a lot of excitement but ultimately fizzle out.  Disrupting tourism and gaining traction requires more than just a fancy website, it requires a distributed ubiquitous platform.

Take Expedia as an example of lack of disruption in the tour and activities sector.  A search for things to do in Bermuda the first two weeks of April comes up with only 12 results.  Do you think that’s representative of all the things there are to do in Bermuda in early April?  Really?

How is it possible that only 12 things are available?  Expedia is a premium travel site with great brand, why isn’t everyone on there?

The trouble comes from when you look at what the average tour operator has to do to get online with Expedia.

  • They have to register with Expedia
  • They have to either provide bookable time slots or accept vouchers to accept participants at any time.
  • They have to give a hefty commission

Seems pretty simple, does it?  Well what happens if you take bookings via the phone and other sources?  What do you do about your Expedia listings?  If you loaded timeslots, you then have to log in and update those timeslots every time you get a booking.  If you have someone with a voucher arrive and your program is full, what do you do?   This becomes a big problem.  Worse, you pay Expedia a huge chunk of your revenue for these problems.

Now, consider that problem amplified every time you want to allow someone with a shopping cart to take bookings for your activity.  There are many options both locally and abroad.  You could have many different places you’d have to update and manage your timeslots in order to ensure you don’t get overbooked.  You’re a small business, cancelling due to overbooking would really upset customers and you can’t necessarily simply shift them to a different tour or time.  So you have to stay on top of it.

Then comes the trouble, you’re not only burdened with trying to run your tour, you’re also juggling a variety of distribution points for it.  If those websites don’t bring you enough regular business, why go through the trouble of listing with them?  If they then doesn’t have many listings, there’s no incentive for others to also list there because it isn’t a very comprehensive source.  An individual might have the great idea to throw up a great website, offer bookability as “the source for Bermuda bookings online”, get a lot of buy in and excitement from operators and then watch as it fizzles.

Activity bookings in tourism is an incredibly challenging market for this reason.  You have to have the ability to build traction, volume and distribution all at low cost in order to gain a foothold.  The barrier to entry is low  but the barrier to disruption is incredibly high because you have to reach critical mass to be able to tip the scales to make the whole thing work.  There has to be enough incentive to participate at low enough cost because everyone in Bermuda tourism feels squeezed like they’re trying to divvy up the same pie which keeps shrinking.  Without awareness of things to do, things don’t get booked and the cycle thus repeats itself. You effectively need a platform that allows bookings to be distributed everywhere and provides operators with a single place to manage their inventory.  Not exactly trivial.

In other news, has 34 activities available to be booked in April. also has 34 activities available.  The very same activities and timeslots offered by Bermuda Hidden Gems and KS Watersports which you can also book via their websites.  Activities which are also bookable via concierge desks in many island hotels.  Its the closest we’ve gotten yet to a ubiquitous platform.

Tourism summit detox

After a rather long day at the tourism summit I think overall it was a good event, a nice thing to see done in Bermuda with many positive signs and aspects.  Ultimately though I am left with mixed feelings as to how successful the end results will be.  It was kind of like a pep rally, it was inspiring, empowering and made you feel like tourism was definitely going to turn around, but after the euphoria fades it is kind of hard to see the next steps.  The sessions I attended were heavy on talk, ideas and information but rather light on real explanations, especially on how to put ideas into action.  As suggested, it was a good event, it is just hard to know if it and the larger strategies will deliver on the hype.

Empowering local tourism

“In April the decision was taken to fund our next generation website as well as rebranding architecture. That has cost millions but we feel will make a difference in the long term.” – Bermuda Tourism Authority CEO Bill Hanbury

The Tourism Authority has spent millions on a “website as well as rebranding architecture”?  That needs a lot more explanation because it is hard to understand how this could possibly be justified and how one can imagine what they’ve really built.  Hopefully more details are forthcoming and we aren’t following the same mistakes of the past of throwing a lot of money at hail mary ideas.  Spending millions on a website and branding is concerning as the Tourism Authority already focuses too much on marketing at the detriment to private business.  The Tourism Authority needs to be more than just a marketing entity.

That being said the Tourism Authority is started down the right track with positive efforts that should be recognized.  Their focus on investing in tourism experiences is wholly welcomed and applauded.  As much as it can it should be focusing on facilitating and empowering not only new players but also existing players across the tourism industry.  It should be helping every tour, activity, guesthouse, hotel and tourism participant on how to get the most our of their efforts.  Training and assistance should be offered for how to improve their own marketing efforts.

For example, here are a few efforts / seminars etc that would be nice to see happen:

  • How to build a good website
  • How to do search engine optimization
  • Education on tools available such as google analytics
  • How to maximize reviews and feedback
  • How to do social media marketing
  • How to generate content
  • How to empower your users and your brand
  • Facilitate strategic partnerships between various tourism industry participants to improve distribution of product and branding.

Today the Tourism Authority will be holding a Tourism Summit which will hopefully introduce and cover many of these, though the fear is that it remains far too hotel focused as it has been in the past.  Hopefully there will be a broader focus that attempts to empower all participants across the tourism spectrum with ideas like those listed above.

Traditional advertising won’t save tourism

One of the greatest problems we face today is that the industry has changed greatly and we haven’t changed with it.  You can see it in the Tourism Authority’s strategy of throwing millions at a website as well as in Shadow Tourism Minister Zane Desilva’s commentary regarding the website investment:

“Bermuda commercials and promotional material are virtually nonexistent in the international arena, yet the BTA has spent millions of dollars building a website that has yet to go live.”

It is then suggested

Mr DeSilva said the next PLP government would increase the advertising budget as part of its tourism plan, as well as strike advertising agreements with the major broadcasting networks in North America, the UK and Europe to build on current markets and increase exposure to new markets.

There is an overhanging fallacy that if you simply throw more money at marketing and advertising that everything will improve.  It not only hasn’t worked every time we’ve tried it since the 80s, it gets increasingly less effective each time we do.

Buying advertising on TV, sponsoring events and the like doesn’t yield the kind of results it once did because the market and industry has changed drastically.  We live in the age of the internet and social media.  Things are very different now than they were 20 years ago, 10 years ago, 5 years ago, even 1 year ago.  Sites like Facebook, Twitter, Trip Advisor and individual websites count for just as much if not more than traditional outlets like tv, radio and sponsoring events.   Tourism marketing needs a much broader focus that empowers all tourism participants to market and promote Bermuda, not simply a singular body with a big budget that throws money at major broadcasting networks or websites.

Tourism Board strangles local tourism businesses

The Bermuda Tourism board is overfunded and as a result strangles local business.  This isn’t the Tourism Board’s fault nor is it the governments.  It comes down to a misunderstanding of what happens when you introduce heavy government subsidies.  Those subsidies make it near impossible for private businesses to compete and in the end we effectively waste tax dollars on mass inefficiencies as private enterprises struggle to survive against overfunded government quangos.

Here’s the Tourism Board’s budget

$25 million is a massive amount of money.  Breakdowns of how that money is spent seem to be unavailable so we’ll just have to look at what is produced.

One of the big investments made with this money is to produce content.  The Tourism Board runs and as a result, has a large dedicated staff producing feature articles, content, media campaigns, videos, promoting and marketing it, you name it.  In the well intentioned context of promoting Bermuda this makes a lot of sense.  However few take a moment to consider the impact this has on private enterprise and how it damages our overall brand and product.

There are a variety of local media outlets that also produce this sort of content.  They produce destination guides, magazines, websites, etc.  The big difference between local outlets and the Tourism Board is that local outlets rely on strategic partnerships, advertising, and product sales to fund their content generation while the Tourism Board gets a hefty handout from government.  How are private enterprises supposed to be able to compete?  They can’t and most are at risk of shutting down.  Worse, our branding and image ends up being very inconsistent.

The Tourism Board was supposed to be an effort to privatize the Tourism Authority and move it towards being self reliant.  Establishing the Tourism Board was a welcome step, but not nearly big enough.  Rather than hiring on a whole raft of staff and doing everything itself the Tourism Board should be partnering with existing local entities to subcontract content generation and other work which helps prop up struggling private entities rather than pushing them down with subsidized competition.

The Tourism Board shouldn’t be in the business of creating content.  It should be buying and featuring content created by local businesses.  Doing otherwise is not only vastly inefficient, it tarnishes our brand, makes it harder for local business to compete and worst of all, achieves the very opposite of the aims it sets out to: improve Bermuda Tourism and help Bermuda get ahead.

Tourism: Understanding the bottom line

The bottom line of improving tourism isn’t just more visitors, it’s also more spending.  Much of the focus and energy tourism evangelists and practitioners place into improving tourism is improving visitor numbers and not nearly enough goes to improving visitor spending.  It serves as an injustice to the true picture we should be caring about most: how much money ends up in our pockets.

Sadly Bermudians have been trained to measure success in tourism by visitor arrivals.  This is a flawed approach, likened to measuring the success of a retail shop by how many people come in to browse.  Now certainly, a shop which is always empty is no hallmark of success.  Neither though is a shop that is always full of people who never buy anything.  In this analogy, Bermuda represents a small boutique shop competing against mega retailers.  We need to tailor our strategy accordingly.  If we fill our shop with non-spenders we will drive away premium shoppers who hate crowds.  If we don’t offer quality products then our shop will sit empty as no one wants to spend more for things of less value.  Thus it is critical that we find a balance where we can maximize revenues.

If you look at the latest tourism statistics you can see a focus on visitor arrival numbers front and center on the first page after the title page.  Sadly we aren’t helping ourselves disrupt the stigma here.  We can see that as of the end of Q2 this year there were over 210,000 visitors and we’ve seen a decline from 2014 of 1%.  By this measure the new Bermuda Tourism Authority, despite all their funding and pizazz, is failing.

However, arrival numbers shouldn’t be what we care about.  We need to focus on what visitors to our shop are spending, not how many come into it.  In more recent statistics visitor spending now dominates a much more prominent position and in this report sits on the 4th page.  This is a very welcome change as expenditure is what should be highlighted.  The visitor spending numbers paint a very different picture thus far for 2015.

The average visitor spent $41 dollars more in the year up to Q2 in 2015 vs. 2014. This is a very good improvement of 7%.  If we take the “Estimated Economic Impact” numbers at face value (no justification for the calculation used to generate this number was provided), we see an estimated impact of $74.4 million, $3.4 million more than 2014 and representative of a moderate 5% growth.

Spending over Arrivals should be the focus of our attention.  By measure of arrivals, the new Tourism Authority is decried for not improving the picture, however by measure of expenditure an entirely different story is told.  Quite sadly the Tourism Authority, the government and the local media are not doing enough to focus the populace on the correct part of the story.  Visitor spending is up, revenue numbers are up and this means we’re generating more money for less people in our little boutique shop.  This is a good thing which should be celebrated and sadly it is not.

Visitor spending must be our focus not arrivals.  Bermuda cannot and will not ever be able to compete with the discount megastores of tourism.  We shouldn’t even try.  Bermuda can and should reposition itself to improve the quality of its product and offerings so that it can maximize the revenue it gets from a smaller number of people.

We can’t and shouldn’t support mega cruise ships

The case was made before, mega cruise ships aren’t the answer to reviving tourism.  We simply can’t compete on volume and need to include the tax cruise ships place on our infrastructure when considering whether they are a net add to our tourism industry.

It is increasing becoming clear that we managed the problems caused by the influx of cruise ships by throwing money at the problem, money we did not have.  Our bus schedules were heavily reliant on lucrative overtime pay to maintain the chaos that includes thousands of tourists flooding our transit network.  Now that the funding has dried up and we’re forced to cut costs, the system is decending into chaos.

The evidence is mounting to support our warnings of a few years ago that the model does not work.  It is important to ask what impact cruise ships have and whether we should be in the volume tourism business or not.  Volume tourists means they pack our streets, pack our buses, pack our best beaches and strain our infrastructure and yet because they’re here on volume, they expect ‘discount’ to be included.

The tourist paying $600 a night to stay at a hotel gets second class treatment when our best beaches are packed, buses are full, taxies huddle around the cruise ships but are absent elsewhere and businesses cheapen their products trying to cater to discount.  We offer a poorer product which simply cannot compete with larger islands who can manage discounted volume tourism.  It damages our product and our reputation to trade for short term gains in visitor statistics for long term declines in visitor spending.  Thus we reiterate our calls to go for quality over quantity and focus on providing the best product, not the cheapest.



See only what I want you to see

Our latest example of spin comes from today’s paper where Senator Dunkley of the United Bermuda Party where he highlights the incredible drop in visitor spending from 2007 to 2009.  Mr. Dunkley is indeed correct in his analysis however one could be forgiven for questioning why he compares against only the last two years?  Indeed, looking back to 2001 through 2006 tells a different story than the picture he paints.  That doesn’t lend itself to his argument now does it?  When tourism was on its way up, the incumbent could do little less than to spin numbers in every way possible to accentuate the job they were doing, conversely now that tourism is on its way down the opposition is taking the opportunity to spin things the other way.  Politicians.

Looking at tourism numbers there is no denying that we’ve seen significant declines since 2007 highs.  Analyzing since 2007 however doesn’t paint a complete picture.

Let’s take a look at an old chart we put together back in 2007.

Admittedly numbers are only presented for the first 3 quarters however a comparison of 2009’s $276 million vs. 2007’s $414 million in visitor expenditure paints a rather incomplete picture.  Noting the above chart we can see annual tourism expenditures and how Bermuda had a pretty poor few years from 2001-2004.   Is it not a bit ingenious disingenuous to leave such years out of your analysis and simply compare against the best recent year while leaving out the details for the previous few?  Though of course, doing so would lessen the dramatic effect now wouldn’t it?