STATEMENT BY PREMIER AND MINISTER OF FINANCE DR. THE HONOURABLE ORLANDO SMITH, OBE
URING THE ELEVENTH SITTING OF THE SECOND SESSION OF THE THIRD HOUSE OF ASSEMBLY OF THE VIRGIN ISLANDS
N MONDAY, 13TH NOVEMBER, 2017
AT THE HOUSE OF ASSEMBLY
ARBITRATION CENTRE, RITTER HOUSE
ROAD TOWN, TORTOLA AT 10:00 A.M.
The Way Forward for BVI Tourism Post Hurricanes Irma and Maria
Madam Speaker thanks for the opportunity to make this statement on Tourism.
Madam Speaker, as I have stated at every opportunity post Hurricanes Irma and Maria, my government’s top priority is rebuilding the economy of the British Virgin Islands, which we view as most critical to returning a firm sense of normalcy to the lives of our people of this territory. In this regard Madam Speaker, our tourism sector, the largest sector of our economy in aggregate will play a leading role.
Madam Speaker, the passage of Hurricane Irma on September 6, 2017 resulted in near catastrophic damage to what was a thriving tourism sector in the BVI, having finally recovered from the post 2008 global financial crisis. Visitor expenditure for 2015 stood at approximately $485 million and the territory’s GDP stood at approximately $1.115Billion. In 2016 the destination achieved the 1 million arrivals mark for the first time in our history. Growth in all sectors contributed to this significant achievement.
Madam Speaker, the damage to our tourism sector has been wide spread affecting all subsectors; land based accommodations, the yachting sector, the dive and marine sector, the cruise tourism sector, resort islands, the small properties and the villa sector, car rentals, beach bars, restaurants, ferries, marinas, other key attractions such as our museums and other key services providers. No sector or island was spared. An initial estimate puts the damage at approximately $2.8 billion dollars.
Madam Speaker for the first time and unlike past hurricanes such as Hurricane Hugo in 1989, Hurricane Irma devastated the yachting subsector of the BVI tourism product. Post the 2008 recession, this subsector was the growth leader in the recovery in the overnight visitor category, both in terms of overall spend and arrivals. This sector has a key role is spreading tourism benefits to all parts of the territory and its people, particularly of sister islands. Traditionally, this sector was always relied upon to lead post hurricane tourism recovery because of how fast it was able to recover and set sail again due, in large part, to the effective pre-hurricane storage system in such areas as Paraquita Bay. This system failed to protect vessels during Irma mainly because of the size and the growth in the number of vessels in the territory’s charter fleet, which stood at approximately 800 vessels..
Madam Speaker, the resort and hotel sector also experienced similar widespread and crippling damage. As we are all fully aware, the significant majority of these properties are located on Virgin Gorda and its immediate environs and our other sister islands. As we meet today these properties are all closed. While some have already started the rebuilding process others are still in various stages of the insurance adjusters’ process.
Madam Speaker ten days ago I met at the owners level with the majority of these properties and the lead charter yacht companies from throughout the BVI in New York on my way from London. I called this meeting for a critical face-to-face discussion with a view to assess their damage, how they are assisting their employees and their timelines for rebuilding and their overall recovery. While the road ahead will be long and challenging, I am pleased to report that I received firm feedback from all present of their commitment to the BVI and the rebuilding of their individual properties and the BVI tourism product and the BVI overall. Madam Speaker it goes without saying that the rebuilding and recovery of these properties will play a lead role in the recovery of our tourism and overall economy.
Madam Speaker, the tourism sector is one of the primary areas where BVIslanders have invested millions of dollars in our economy via small hotels, villas, restaurants, car rentals, shops, food suppliers, tour operators, taxis, maintenance services for villas, marinas, boat rentals etc. These investments are in many ways the lifeblood of the tourism sector and they have all been severely affected. Like the resort owners, they too have committed to rebuilding and will need governmental support and we have pledged such assistance in their rebuilding effort.
Madam Speaker in the area of cruise tourism, the damage to the key infrastructure of the cruise pier and Pier Park facilities was not catastrophic. Notwithstanding, the key supporting infrastructure that is critical to the experience of our day visitors such as the roads, beaches, historical sites, lookout sites, shops and other key visitor attractions will require repair, restoration and improvement. The cruise lines are making their own independent assessments of our infrastructure with a view to working with us to set dates and a timeline for the cruise lines to start calling on the Virgin Islands again.
The Rebuilding Effort
Madam Speaker, my government strongly believe that the rebuilding of our tourism sector must be guided by following five primary principles:
- Protecting the BVI Brand position globally
- Rebuilding to a Category 5+ standard, this is critical to protecting and reducing the level of damage to the sector from future hurricanes on the landside and on the marine side designing a new strategy for pre hurricane storage of the BVI Yachting Fleet
- Leap frogging wherever possible the destination’s immediate competitors in our key areas of differential advantage such as: environmental management, yachting, local investment, resort development and island hopping capability
- Positioning the destination to attract new investment in the tourism space both local and foreign with special emphasis on assisting local investors
- Government stepping up its investment in key infrastructure to foster the continued long-term development of the sector.
The rebuilding effort will have four main areas of focus:
- Existing properties/stakeholders
- Fast tracking new investment that is already on the approval track/pipeline
- Seeking new investment, local and foreign to fill strategic gaps in our tourism product
- Maximizing employment opportunities via retaining in the short term local labour and business opportunities given that construction will become a dominant sector in the near term.
Given the destination’s market positioning targeting the higher end of the market, a significant rebuilding and repair effort will be required. Informed initial thinking is that the winter of 2018/19 should be viewed as a logical planning window. Participants at the owners meeting in New York affirmed this.
Madam Speaker, in the meantime we expect that the tourism recovery leaders, namely the yachting sector, the cruise sector and the villa and small properties subsector will rebound. Accordingly in the government’s short-term strategy we have directed resources in these key areas over the next 120 days to jump-start the recovery.
Last week I attended the Boat Show here in the BVI and was very encouraged by the positive attitude of the paticipants and their readiness to get up and running. , Similar sentiments and energy surround the BVI Tourist Board’s attendance at the major Fall Boat Shows in the United States, the upcoming Anegada Lobster Festival, and the Spring Regatta during Easter next year. Other significant developments include a dedicated destination recovery web site, the completion of a destination marketing strategy by the BVI Tourist Board and a ramping up of positive recovery articles and press releases with on rebuilding of the sector.
Madam Speaker, we have also allocated resources to the initial rebuilding and cleanup of key visitor areas and attractions, and to assisting the small properties and villas with a view to expanding the number of available rooms in the Territory. We are already seeing an increase in persons wanting to visit the Territory in the area of volunteer tourism, particularly past visitors.
Madam Speaker, disasters create real challenges for any affected population however, they also create opportunities and in the case of tourism, the hurricanes have created what some brand as the ‘Irma Opportunity’ to move BVI tourism to the next level. Some of these opportunities include:
- rebuilding the sector’s physical plant to withstand category 5+ hurricanes, hich will be the new normal, hence ensuring speedy recovery and reduced adverse economic impact from these storms in the future;
- developing of a National Strategic Plan for the continued development of the BVI Tourism potential. If strategically planned, this is an opportunity to leapfrog or at least put some distance between the BVI and some of the destination’s immediate competitors;
- being bold and imaginative in how we address the destination’s air access challenges and how we finance the expansion of our primary airport facilities;
- filling gaps in our tourism product by attracting new investors in emerging areas of tourism which target and reflect the new tourism trends such as in the wellness and medical tourism space;
- completing the work started on updating the territory’s Charter Yacht legislation and implement a new Charter Yacht Strategy 2.0;
- Positioning the destination in a derection to capture a larger segment of the burgeoning global millennial market (which is projected to be even bigger than the Baby Boomers) while at the same time continuing to meet the needs of the ageing baby boomers;
- Deepening the nexus between tourism and financial services to the benefit of the territory’s economy;
- Continuing to move forward the initial work started in developing the territory’s medical tourism sector as a high priority. In this regard keeping on track the accreditation of the hospital must be a top priority;
- introducing and institutionalizing new mandatory industry standards for service and related training for all employee/entrants;
- encouraging a new generation of Virgin Islanders to invest in and seek career opportunities in tourism;
- rethinking the pre-hurricane storage strategy for the territory’s yachting sector; and
- enhancing the territory’s ferry operation, which is critical, as part of the destination’s island hopping advantage.
Madam Speaker, these areas of opportunity and others have all been included in a sectoral plan (short and long term) for the redevelopment and rebuilding of BVI Tourism, which forms part of the government’s Recovery Plan for the Territory. Madam Speaker, I will be reporting to this Honourable House on the progress on these initiatives throughout the next year.
Madam Speaker, in closing I want to assure this Honourable House and all who are within the sound of my voice, that in partnership with our private sector stakeholders we will rebuild BVI Tourism ensuring its continued contribution to our economy and way of life for many generations to come. We need all hands on deck.
Madam Speaker, I thank you.