2013 Second Quarter: Visitor Arrivals Down 12%

Good Afternoon, it is my privilege to be here today to share with you the results from the second quarter of the year as it relates to our tourism industry.

Before I proceed, I would like to first and foremost thank all of you. Indeed, I would like to thank all the people of Bermuda. It is the unwavering spirit, indomitable will and unceasingly hard work of the Bermudian people that continues to be our greatest asset. It is what inspires me and it is what will help us to achieve the kind of tourism success that this country so richly deserves.

It has been encouraging to hear from many of you in the industry in the past few weeks, and to receive stories of your confidence that the business is indeed coming back.

But in order to attain that success, we know that the hard work must continue as we advance to meet both the challenges and opportunities that we face. Ladies and gentlemen, let me share with you our progress thus far.

First, I am happy to say that we saw an upward trend in air arrivals in May and June, which both increased by approximately six percent. As I will discuss further on, this is a very good sign and indicative of the trends we are seeing moving forward into Quarter 3 and beyond.

However, an unusually weak April that saw a 17 percent decline essentially made air arrivals for the quarter flat with a total of 75,013 visitors flying to the island, which was 173 less than the same period in 2012. This disparity was primarily a result of the hundreds of athletes we hosted last April during the 2012 Carifta Games.

Total visitors to Bermuda for the second quarter of 2013 declined by 12 percent year over year with 210,964 tourists arriving in the months of April, May and June. In analyzing the data, once again, we see that this decline was fueled mainly by a decrease in cruise and yacht arrivals.

We knew going into the second quarter that there would be 15 less cruise calls scheduled as compared to the same period in 2012. However, this decline was exacerbated by the cancellation of four further calls due to the cancellation of the Emerald Princess prior to the completion of the Heritage Wharf repairs, and three cancellations due to a fire on the Grandeur of the Seas. The quarter thus ended with 133,676 people cruising here, representing a decline of 17 percent.

Yacht arrivals also saw a 43 percent decline year over year, that is, of course, directly related to the biennial Newport to Bermuda race which happened in June of last year. Yacht arrivals will increase next year as the race returns.

The cruise and yacht markets notwithstanding, when we look at the numbers broken down by our key regional markets, we were very pleased to see increases of eight percent and 10 percent from the United Kingdom and Europe respectively.

Overall visitors from the United States remained flat, however our key gateway markets of New York grew by 9.5 percent, Massachusetts grew by nearly 1.5 percent, Pennsylvania by 3.5 percent and Georgia by more than three percent.

Looking at figures from the rest of the world category, year over year we saw an 11 percent decline in visitors that can be attributed to the spike in arrivals from the Caribbean we saw in April 2012 for the Carifta Games.

Looking north, Canada is another area that faced challenges due to reduced service by Air Canada, which dropped its daily flight from Toronto to five times a week in April, three times a week in May and four times a week in June. This caused visitor arrivals from Canada to decline by nine percent. This is obviously an area of concern and I can assure you that we are making every effort to resolve the reduction of airlift by Air Canada from the Toronto gateway that we’ve experienced in 2013. We have also held meetings with WestJet to determine opportunities there and I will keep you updated as to the progress of those talks. I anticipate a favorable solution to this current situation in the near future.

In the meantime, you may recall that in my last report I talked about the reduction we had seen in business and convention travel in the first quarter. Ladies and gentlemen I am happy to say that arrivals from this sector increased by 14 percent and 27 percent respectively, mitigating a smaller decline of two percent by those saying they were visiting on vacation, and an eight percent decline in those visiting friends and relatives.

The growth of the convention market especially is a good sign, as is the fact that overall visitors to the island stayed longer in the second quarter. Length of visits increased from 5.82 nights to 7.61 nights and visitors staying in commercial accommodations also increased with an average night stay of 6.42 nights, up from 4.73 nights. A 35% increase in the time spent on island is a significant statistic, and those numbers are particularly important as they lead to more money being spent in our hotels, restaurants, taxis and shops.

As we continue our efforts through the third quarter, we are particularly heartened by the reports we are receiving from our hotel partners. The pacing of Bermuda Hotel Association members reveals solid bookings that commenced in May and have continued through August. So far in the peak months of May, June and July, which is where it counts, we have welcomed over 5,000 more air visitors, a 6% increase over the same period in 2012.
Looking ahead to the fall, we are receiving some encouraging reports of partners who are seeing demand for rooms straight through October, except the traditionally soft period in September after Labor Day in the United States.

Of course, in order to fill our hotel rooms, we need a way to deliver guests to our shores. On that front, I am happy to report that the new Delta service out of New York’s LaGuardia Airport has thus far been well received. Delta has been pleased with their load factors and all indications are that we can expect this flight to continue through winter 2014 and beyond.

While we view the air situation in the ever-important New York metropolitan area as a positive, we are working diligently to address those gateways that have presented a concern. In Philadelphia, for instance, we continue to work with US Air in an effort to convince them to reconsider their decision to reduce their schedule between January and March 2014.

We recognize that we can do everything possible to create demand for this destination, but if there are not sufficient and convenient ways for our customers to get here, they will go elsewhere. That must not happen, and we will continue to explore all avenues possible to ensure that no prospective customer will turn away from Bermuda simply because there wasn’t the means to get here.

Ladies and gentlemen, the Department of Tourism and the Tourism Board continue to work tirelessly in marketing Bermuda and putting on numerous events to attract visitors to our shores. For their efforts I remain extremely grateful. I will not take up time in enumerating all the good work that is being done but if you are interested the information is available.

I strongly believe that the plan we set in motion to create a Tourism Authority is vital to our success and remains my number one priority. I have stated on record that we need an entity which would ensure that tourism is in the hands of industry experts who can drive this critical industry with as much independence and autonomy as possible.

We are making progress on this front, and I am pleased to confirm that we are very close to making this vision a reality. We cannot simply continue with business as usual. This Government will create a paradigm shift in this industry which I believe will be paramount to its revitalization.

Thank you.

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