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US Virgin Islands Tourism: Wealth and Poverty Collide - Not so safe - Cruise Control - Tax Relief ...

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US Virgin Islands Tourism: Wealth and Poverty Collide - Not so safe - Cruise Control - Tax Relief Plus SCUBA


Interview: The Honorable Beverly Nicholson-Doty, Commissioner of Tourism, United States Virgin Islands

Dr. Elinor Garely, Editor-in-Chief, TourismExecutives.com  Nov 09, 2014

This article is about The Honorable Beverly Nicolson-Doty, the Commissioner of Tourism for the United States Virgin Islands and former Chair of the Caribbean Tourism Organization (CTO).

Before it was published on Tourism Executives, the author was waiting for more data and clarification from the USVI Tourism office. They were not provided. After the article was published, eTN received a phone call from the Caribbean Tourism Organization. CTO claimed the articles had many errors. A team of people was supposed to get back to eTN to clarify these errors - this did not happen.

One point raised was the "Not so safe" paragraph. After checking with the United States Centers for Disease Control and Prevention, eTN stands by the Tourism Executive article. Of course, it should be acknowledged the US Virgin Islands is one of the safest travel and tourism destinations in the world when it comes to crime and overall standards.

USVI

The three primary districts of the Virgin Islands are St. Thomas, St. Croix, and St. John. There are also two smaller islands, Water Island and Hassel Island.

St. Thomas is the capital with 18,000 people. It is the primary resort destination as well as the center for government, trade and finance. Charlotte Amalie has a deep water harbor that is part of major shipping routes to the Panama Canal and is located east of the Cyril E. King International Airport, one of the busiest airports in the Caribbean.

St. John lies to the east of St. Thomas. Cruz Bay is on the western coast of the island and is its primary port and link to St. Thomas.
St. Croix is the largest of the three islands and lies to the south of St. Thomas. The primary towns are Christiansted and Frederisksted. As of 2002, nearly 95 percent of the Virgin Island’s total farm land was on St. Croix. While tourism is the most important economic activity, there are manufacturing operations and other businesses at this location.

Skill-Set

The Honorable Nicolson-Doty holds a cabinet-level position in the USVI and is responsible for domestic and international marketing tourism activities to selected target markets (i.e., tour operators/travel agents; consumers).

Created in 1995, her Department of Tourism is tasked with finding ways to increase the visitor numbers to the USVI and getting tourists to spend their more money. To fulfill the mission, the Department developed a strategic plan that positioned the USVI as a unique, competitive and desirable tourist destination. The Commissioner and her team are tasked with increasing both domestic and international visitors, improving community awareness of tourism, differentiating the uniqueness of each island and building brand equity.

These objectives are reached by working closely with multiple partners (i.e., hoteliers, attractions, National Park Service, tour operators, travel agents, airlines, the media and the local community).

The Planner

Beverly Nicholson-Doty was appointed Commissioner for the USVI Department of Tourism in 2007. After graduating from the College of the Virgin Islands she started on her career path in the hotel, travel and tourism industry at the Virgin Isle Hotel. Quickly climbing the management ladder she was promoted to Marketing and Sales Director.

In 1993 she became the Executive Director of the St. Thomas-St. John Hotel and Tourism Association where she is credited with directing the strategic plan for this organization. Her programs included education and training, community projects, government relations and marketing. She is also credited as an innovator, forming the Cooperative Marketing Initiative that encourages tourism-related businesses to form strategic alliances for product promotion. She also initiated a student internship program that introduces the industry to young men and women while they are still in school

Considered a visionary, the Commissioner was named executive director of the Year (2000) by the Caribbean Hotel Association. She has served as vice president of the Caribbean Society of Hotel Association Executives (CSHAE) and is the former chair of the Caribbean Tourism Association. Active in her local community the Commissioner serves on the Boards of the Small Business Development Agency, the Boys and Girls Clubs of the Virgin Islands and the Caribbean Society of Hotel Association Executives.

Not Tranquil in Paradise

Her job is not an easy one. Visitors to the USVI (arriving by air) declined 5.5 percent from 613,647 (first 10 months for 2012) to 579,613 (first 10 months 2013); St. Croix figures indicate a decline of 17.8 percent, from 131,573 to 108,185 over the same period.

While cruise ships are often looked upon as the pain- relief medicine for declining tourism, the visitor numbers are not encouraging. Approximately 2.0 million passengers arrived aboard cruise ships in 2011-2012; of these 1.8 million disembarked and visited but did not spend lots of money. In 2008-2009 visitor expenditures reached $384.4 million declining to $339.8 million in 2011-12.

On average, passengers spent $146.70 while crew members spent an average of $138.30. The purchase of shore excursions dropped from 51 percent to 46 percent, watches and jewelry shopping declined from 39 percent to 34 percent, clothing declined from 54 percent to 48 percent and local crafts dropped from 36 percent to 34 percent.

For fiscal year 2014 the Tourism Commissioner requested a budget of $2,705,068 from the General Fund for annual operations. This represents a decline of 31 percent from the first tourism budget in 2007. Personnel accounts for approximately 55 percent of the requested amount. There was also a request of $17,500,000 from the Tourism Advertising Revolving Fund for marketing and promotional activities. The request is based on projected hotel occupancy tax collections.

Stresses

St. Thomas is considered the most culturally diverse island in the Caribbean and more so when tourists land on its shores. These visitors create a heavy demand on limited island resources like water, electricity, and gasoline. Even the beaches and waterways, heavily used by vacationers, are hard to sustain.

Wealth and Poverty Collide

A third of the 104,700 residents live below the poverty line with per capita annual income approximately $13,139, around 35 percent below that of Mississippi, the poorest state in America, according to Census Bureau data.

Profoundly dependent upon tourism for economic survival the USVI receives 30 percent of its GDP from this industry. While necessary, visitors add stressors to the environment and the Islands’ culture, evidenced by consistently low rankings in customer service and island cleanliness assessments from guest surveys (Bureau of Economic Research 2005).

Cruise Control

To add value to the economy and enrich the cruise tourist experience, The West Indian Company Limited (WICO) - the organization that operates and develops the cruise ship port serving Charlotte Amalie (St. Thomas), is increasing services and amenities.

Currently three cruise ships line up on the port’s berth most days of the year; however, WICO and its stakeholders have short and long-term plans to increase cruise ship visitors in the next few years. The new capital project will accommodate larger and heavier ships. The dock will be extended by 150 feet and allow three ships to continue to berth at the same time. The harbor will be updated by the replacement of the existing bollards and the dock will be strengthened against erosion by the thrusters of today’s bigger and heavier ships. There will also be an extension to the port by building a finger berth for two more ships.

WICO controls the flow of cruise visitors by arranging shore excursions and ground transportation.

And More Shopping

In an attempt to encourage shopping, the US Virgin Islands offers US citizens a US$1600 tax-free exemption rather than the standard US$800.
WICO owns the Havensight Shopping Mall, adjacent to the Charlotte Amalie dock. With 70 retail stores in the mall, passengers looking for tax-free shopping find opportunities to buy t-shirts, jewelry and other souvenirs. WICO provides facility management services to the stores and 30 other businesses including doctors and lawyers.

Timeshare

Timeshare operations are well represented in the USVI by Marriott (Frenchman’s Cove Resort and Ritz Carlton Club); Starwood Vacation Ownership (St. John at the Westin St. John Resort and Villas) and St. Croix One (LLC’s Chenay Bay Beach Resort). There are 13 different timeshare programs throughout the USVI equaling one-fifth of all hotel rooms. These rooms enjoy an 80 percent occupancy rate and help to sustain the USVI tourism during economic downturns.

According to a 2008 Ernst and Young report, timeshare in the USVI accounted for 1300 jobs, $25 million in income and $125 million in total sales in 2006, generating $15.5 million in additional tax revenue for the USVI government.

Tax Relief Plus SCUBA

The US Virgin Islands is the only nearly tax-free haven to fly the US flag. Companies and their executives can experience dramatic savings on both corporate and personal taxes combined with a beautiful place to work. Incentives, modified by the US Treasury and US Congress ten years ago were intended to improve the economy.

Federal Aid

Regardless of the tax incentives and timeshare properties, the Islands are deeply in debt and lobby the Federal government for assistance. In 2009 the USVI received $364 million as a Federal economic stimulus package. The Federal government recently approved a $3 million grant for capital improvement that will be used in projects that include hospitals, schools and government facilities as well as correctional facilities, a motor vehicle lane on St. John and improvement in the Territory’s electrical underground system. The Federal government also provides relief to USVI residents in the form of subsidies for telephone service, power, healthcare and housing.

Not So Safe

The US Centers for Disease Control and Prevention recommends that visitors to the Territories receive Hepatitis A and Typhoid vaccines because these medical issues can be acquired through contaminated food or water in this locale, regardless of dining or accommodations.

Four cases of chikungunya fever, a mosquito-borne illness characterized by fever and incapacitating joint pains, were reported from the U.S. Virgin Islands in the spring and summer of 2014 (mdtravelhealth.com).

Jim walker’s Cruise Law News ranks St. Thomas as Number 8 among his Top Ten Most Dangerous cruise destinations (2014, cruiselawnews.com).
According to Jenny Kane (virginislandsdailynews.com), the USVI is considered as having one of the highest per capita murder rates in the nation and the world although there was a decline in 2013. The territory has a population of about 106,405, according to the most recent 2010 U.S. Census, leaving it with a per capita homicide rate of about 35.5 per 100,000 people. The national average is reported as 4.7 per 100,000 people in 2012 by the Federal Bureau of Investigation's uniform crime reports of 2012.

Put It Off

The discrepancy between the socioeconomic status, ethnicity and colonial history of the local population stands in contrast to that of the tourist, straining the relationship between residents and visitors which is evidenced, in some cases, by poor service and worker hostility. Negative employee behavior combined with infrastructure decline pushes tourism to other destinations and creates a downward spiral for USVI visits.

There is precious little time for the USVI tourism practices to meet 21st century demands. The needs of the community and the tourists may be diametrically opposed; however, for tourism to flourish cooperation is a necessity. From reduced energy costs to increased educational opportunities, from improved healthcare to a continued reduction in crime, these and many other challenges must be tackled. There is only “now.”

Honorable Beverly Nicholson-Doty, Commissioner of Tourism, United States Virgin Islands

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