Premier’s Statement On First Quarter Tourist Stats

Premier and Minister of Tourism Dr Ewart Brown gave a press conference this morning (May 27)  in relation to the tourism statistics for first three months of 2010, his full statement follows below:

Good afternoon Ladies and Gentlemen,

The first quarter of 2010 remained as challenging as the first quarter of 2009 and, as a result, Bermuda continued to experience declines in visitor arrivals.

Total visitor arrivals to Bermuda for the first three months of 2010 were down 7% year over year with 30,078 visitors arriving on our shores during this period, down from 32,361 visitors in 2009. Cruise and yacht arrivals saw increases this quarter.

It should be recognized, however, that the first quarter is not our peak period and will account for approximately 15% of all business activity that will be realized for 2010. For this reason alone there is room for some optimism as we take a look at the business trend for the next few quarters.

Although there is a fairly clear indication that business demand is slowly improving, very unusual storms, particularly in the northeast US spreading all the way to Bermuda, resulted in an unprecedented 45 flight cancellations in January, February and March. This caused a dramatic blow to visitor arrivals. Many visitors had to cancel their trips to the island, obviously contributing to the decline of 10% in air arrivals during this period. A total of 28,865 visitors flew to Bermuda in the first quarter, down from 32,235 visitors in the first quarter of 2009.

While air visitation may have been down in Q1, visitors to the island stayed longer with average nights stay increasing to 6.63 nights from 6.17 nights during the same period in 2009. Average nights stay in commercial properties also increased during the first quarter of 2010 up to 5.03 nights from 4.71 nights.

Two occasional cruise ship calls led to an increase in cruise visitation for the first quarter of 2010. The two small ships brought 985 cruise passengers to the island during this period. Cruise activity in the first quarter of the year is usually minimal as the season begins to pick up steam in the months of April and May. As we move through the second quarter we will begin to see cruise passenger arrivals increase as 2010 is expected to be a fruitful year with a projected increase of 11%.

Yacht Arrivals for the first quarter were up by almost 81% with a total of 228 visiting yachtsman sailing to our shores during this period up from 126 yachtsmen in the first quarter of 2009. Yacht visitation should increase even further in 2010 as the bi-annual Newport to Bermuda race, the island’s biggest yachting event, is slated for this year.

Statistics compiled by the majority of Bermuda Hotel Association (BHA) members painted a similar, but improving, story. Room occupancy for Q1, reported by the 7 largest hotels or 75% of the inventory, was 35% compared to 37% in 2009. The average room rate for these hotels was flat, $202 compared to $203 in the previous year, and this was an encouraging sign. Total revenue, however, declined by $4 million, or approximately 20% to $17 million. Hotels are currently working on many initiatives of their own in an attempt to raise the average rate to previous levels.

Three key signature events, occurring once again in the first quarter, achieved good results.

• The International Race Weekend in January achieved a higher turnout than previous year, 680 visitors, and the 2011 event is already being planned. This event will also be highly profiled in the Runners World schedule next year.

• The Bermuda International Love Festival was again one of the key events in February. We have seen this event evolve to one where our key advertising partners now step up to sponsor and we will continue to extend the event to encompass food, fun, fashion and golf. One of the prime objectives of this event is to attract new visitors and we have no better an example than first timers Emil and Wyn Whitby of Toronto. The Whitby’s saw the Love Festival advertisement on line and booked during Festival week this year. They loved the event. We received word just today that they have booked another vacation and are staying this week at the Fairmont Hamilton.

• The Bermuda Regional Bridge tournament attracted over 300 vistors, slightly below 2009’s numbers, and will continue to be a staple event in the coming years. Several visiting school sports teams used Bermuda for winter training and matches and we will look to grow this sports tourism sector in 2011.

All tourism related businesses are likely already experiencing what the hotels’ advanced bookings are indicating for Quarter 2. The months of May, June and July are showing signs of life and are trending very positively compared to previous year. We anticipate very tangible improvement in business in the next few months.

We believe that this is due to the aggressive partnerships between BDOT and the hotels with several promotional initiatives which began in 2009. BDOT has consistently stuck with the game plan of encouraging cheaper air fares with attractive hotel promotions, while at the same time investing its dollars in raising awareness for Bermuda, even in this challenging period. The all important group market segment is also showing some signs of life and BDOT will continue to support the efforts of the hotels as they attempt to win back this key contributor to hotel occupancies.

The Sizzling Summer promotion, co – partnered with hotels, and advertised throughout the month of April in the USA, has realized an amazing 15,000 room nights of business for this coming summer. The hotels are extremely pleased and want more.

Major producers of business are reporting very positive trends for bookings. Expedia, by far the largest producer of leisure business to the island, is pacing 93% ahead of its 2009 production. Orbitz is 60% ahead, Travelocity is 21% ahead. Total wholesale production is currently 41% ahead of 2009.

US airline carrier loads are trending very positively, at least till the Fall of this year. Jetblue Airways has reported great improvement in leisure traffic, both out of New York and Boston.

In the UK BA Holidays has already doubled their production on previous year and they are the #1 producer from this market. British Airways, despite the major challenges with ash and union negotiations, is also reporting solid double digit increases for this summer.

We have seen the launch of Westjet service out of Toronto on May 3, and early indications are that bookings are really encouraging. We consider Canada as our single biggest opportunity for growth in the coming year and this will clearly be reflected in the sales, advertising and promotional support that will be directed to this market.

The quarterly exit survey of 752 visitors, carried out by Total Research Associates, gave some interesting insight into our business patterns. Some of the highlights included:

• Almost all visitors to Bermuda (99%) were satisfied with their visits to the island in the first quarter of 2010, with two-thirds of these travelers completely satisfied. (67%, down 1 point).

• Per person visitor expenditure in the first quarter of 2010 ranged from $913 – 1,026, up from a range of $734 – $922 per person during the same period in 2009. While the island had experienced a decline in visitors during this quarter, the increase in per person expenditure resulted in total expenditure remaining relatively constant at a range of $26.4 –$29.6 million. compared to a range of $23.6 – $29.7 million in 2009.

• The majority of visitors continue to book their trip directly (62%, up 3 points), while fewer use a travel agent (13%, down 8 points). Among those who book their trip directly, nearly all (94% down 3 points) use the internet to book their flight, while fewer (57% down 9 points) use the internet to book their vacation.

• Fewer visitors booked their vacation as part of a package (down 9 points) but the average cost of a vacation package remained constant at $2,085 (vs. $20,093 in Q1 2009.)

• Travellers continue to book their trips closer to departure date, thus making forecasting of business very difficult. Indeed, in Q1 2010 visitors booked their trip an average of 6.1 weeks in advance (vs 7.6 weeks in Q1 2009). This trend is a key component of determining advertising strategy and figuring out the optimum time to get the message out to the market.

• Similar to the same quarter last year, one half of visitors can recall a Bermuda advertisement (52% down 3 points). Recall for television ads is significantly higher (52%, up 8 points) while recall for magazine ads is stable and unchanged at 44%.

• Opinions towards having a casino on the island are similar to those measured in Q1 2009. One third of visitors polled visitors say they would definitely or probably visit such an establishment if it were available (30%, up 2 points). One third think having a casino on the island would make it more or as appealing (30%, unchanged).

• Visitation to Bermuda’s Visitor Information Centres (VICS) has increased significantly (30%, up 8 points)

• Complete satisfaction with the quality of commercial accommodations is significantly higher year over year at 75%, up 7 points.

One area that continues to keep the attention of all of us is the success of our digital strategy and this will be a major focus in the coming year.

The first quarter continued to reveal healthy website usage with customers staying longer on the site. In our efforts to further leverage this important media, BDOT has commenced the development of a brand new website to be launched in early 2011.

We take note of recent observations by the Secretary General of the Caribbean Hotel Association (CTO).

“The second half of the past decade experienced a virtual revolution in information technology development and usage, that has battered traditional media in print and broadcast to the edge of extinction, or beyond for many magazines and newspapers on both sides of the Atlantic. Over this period, mobile technology and social media have now become staples among the growing ranks of Internet users everywhere. In short, the new media is now mainstream and has produced a younger generation of travelers who grew up in the computer age and are capable of adapting instantly to today’s constant changes in technology. At the same time, older segments of the population have demonstrated their willingness to invest in new gadgets like the Kindle and are heavy users of the Internet. Forward thinking governments in the region, and their private sector counterparts with the responsibility for tourism promotion, need to stay ahead of the curve in this new reality while laggards may court disaster”

We fully endorse the sentiments of the Secretary General as this fits perfectly with our social media objectives. We will increase our visibility in key social spaces like Facebook and Twitter. We will also drive brand awareness of Bermuda with specific promotions, and will encourage Bermuda advocates to join in this process.

As we look ahead, therefore, to summer 2010 we can see clear and positive results from several initiatives and announcements this year.

We are pleased to announce that this year’s Bermuda Music Festival weekend will be September 30, Oct 1st and 2nd . An open request for proposal was put out some weeks back and the recommended promoter for the event will be made to the cabinet very shortly. We anticipate a full announcement of this year’s venues, and full line up, before the end of June.

The creation, and launch, in March of the hugely successful pink taxis in the streets of London is just one example of the out of the box thinking by the team to differentiate Bermuda from the clutter of our competition.

The proximity message of just two hours away or less, particularly for the northeast of the USA, is the key strategy for all out of home advertising for this summer period. The “feel the love” theme, with the signature Bermuda shorts, has been extended to buses all over the streets of Manhattan, billboards in strategic airport exits in New York, New Jersey, Boston and Philadelphia and current consideration is being given to extending this to the streets of Toronto.

On May 8th we were very pleased with the national airing of the half hour Global Golf adventure programme on NBC just prior to the Players Championship.

The viewership ratings are in and Global Golf Adventure-Bermuda returned an excellent 0.6 rating. It stacked up very well versus other sports shows on that Saturday such as ABC’s Sports Saturday, which had a 0.4 rating and CBS’s Sports Spectacular, which had a 0.5 rating. It was only bettered by the CBS NCAA Women’s Gymnastics Championships, which had a 0.7 rating.

Bermuda has long been an ideal honeymoon destination and, in more recent times, an excellent venue to get married away from home. Honeymoons and weddings continue to be a buoyant market segment and Bermuda Tourism’s strategy this year is to maximize awareness for potential honeymoon visitors.

Two initiatives recently launched have been designed just for this purpose. We are delighted with the results. The free flights from UK promotion for couples to get married in Bermuda has been extraordinarily successful. We have received publicity to well over 16 million British residents in such publications as Travel Bulletin, The Sun, The Sunday Times Travel, Selling Long Haul, GMTV, theweddinggirl.co.uk, Woman and Brides. We have received 176 inquiries and five registration forms, with two bookings confirmed.

Prospective winners have to book stay and get married on island prior to receiving an airfare rebate. This promotion has cost nothing to promote but has delivered excellent PR value.

The Bermuda Perfect 10 promotion is a significantly unique promotion that has made Bermuda stand out in a major way. The contest was launched on April 23rd and the finalist selection will be made on May 31. The winners are scheduled to be announced on June 18. The PR value is enormous and yet to be fully tallied. Jetblue Airways has been a major partner with their donation of a totally free charter flight that arrives on October 8, 2010. There have been 767 entries to date on this promotion, and Bermuda is guaranteed over 1 million impressions in the knot.com.

June 17, 2010 will be the first Bermuda Night with the Boston Red Sox partnership. Young talented Bermudians, Khano Smith of the New England Revolution and accomplished young singer Twanee Butterfield will throw out the first pitch and sing the US National anthem. It promises to be a great evening where Bermuda will be exposed to our key target audience. Our Red Sox partnership this year also includes key sales opportunities at the Fedex Cup PGA golf events The Barclays in New Jersey and the Deutsche Bank Championship in Boston.

In conclusion, we are setting up for solid, steady improvement of our business for 2010. Complacency will never be part of the vocabulary, consistency of effort will be.

Ladies and Gentlemen, thank you!

#BermudaTourism

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