Members of St. Croix’s tourism industry painted a gloomy picture of the territory’s future for senators Thursday evening.
At a hearing of the Senate Committee on Economic Development, Agriculture and Consumer Protection, representatives from St. Croix’s hotel association warned that if the government continued to underfund the Department of Tourism’s marketing efforts, the territory's ranking as a destination would further diminish.
In 1992 the U.S. Virgin Islands was ranked as the No. 1 tourist destination in the Caribbean. Since then, the territory has dropped to 13th place, according to the Caribbean Tourism Organization.
"Our tourism sector is in dire straits," said Peter Locke, president of the St. Croix Accommodations Council and owner of the Chenay Bay Resort. "There is no one performing worse than St. Croix."
Locke said the annual occupancy rate for St. Croix’s hotels is about 45 percent. The industry standard and the mark at which most hotels break even is 60 percent, he said. Without a well-funded marketing campaign to attract more overnight visitors to the territory, Locke said, occupancy rates could drop to around 30 percent on St. Croix and 45 percent on St. Thomas.
The Accommodations Council plans to submit draft legislation that would place tourism in the hands of the private sector. The main reason hoteliers want to privatize is because of the Hotel Occupancy Tax, which totals approximately $11 million a year.
Those funds are, by law, supposed to be deposited in the Tourism Revolving Fund and used to market the territory as a tourism destination. However, much of that revenue has been diverted to meet government obligations.
Committee chair David Jones said the fiscal year 2000 budget contains $6 million to promote the territory. The British Virgin Islands spends about $12 million more a year.
"We wrestled long and hard to find the level of appropriation that would make a difference," Jones said. "When we looked at the options, it was a very difficult choice and we held back, not sure if the general population would want to" spend the money on marketing.
Acting Tourism Commissioner Monique Sibilly-Hodge said Gov. Charles Turnbull is organizing a public/private task force to evaluate the Department of Tourism. One practice that will be evaluated is the department’s funding of the carnival events held on the territory’s three main islands.
Hodge said the department contributes $250,000 to V.I. Carnival on St. Thomas, $150,000 to the Crucian Christmas Festival and $50,000 to the St. John Fourth of July Celebration.
"The question that many people ask is what’s better? Using that money for events or on advertising?"
