Tourism is the U.S. Virgin Island’s primary industry, accounting for 68 percent of gross domestic product. The average stay on this group of islands—St. Croix, St. John and St. Thomas—is about 4.2 nights, and visitors spend on average a little more than $400 a day. Even at the lowest point of the recession, these eastern Caribbean islands never dipped below 1.5 million cruise visitors a year.
But the U.S. Virgin Islands experienced a significant struggle in 2011. “Last year was bad,” says Commissioner of the U.S. Virgin Islands Department of Tourism Beverly Nicholson Doty, who recently visited the Lodging office while in the Philadelphia area. It wasn’t until Oct. 1, she says, that the territory began to see an overall uptick in business for both land and cruise.
From a lodging perspective, Doty says the U.S. Virgin Islands is not only seeing greater occupancy, it is also seeing higher average daily rate (ADR). “That’s really important for us,” says Doty, who formerly served as the director of the St. Thomas-St. John Hotel & Tourism Association. “Ultimately, because of the recession there was so much discounting—there was certainly so much added value but really it reduced the overall room rate and that’s a concern for the viability of the product and for the ability to put back funds into the overall infrastructure of the hospitality industry.”
Several developments that have been at a standstill since 2008 are beginning to see financial markets open to discussions again, she adds. To help stimulate some of these projects, Gov. John de Jongh Jr. signed the Hotel Development Act into law in October 2011, which allows hotel developers to use a portion of their hotel occupancy and casino taxes to repay their long-term loans.
Hotel development is “a high priority for the government and specifically for the island of St. Croix,” Doty says. “There have been several things we’ve been looking at to strengthen hotel development on the island.” St. Croix is the largest of the three U.S. Virgin Islands, but the least developed in terms of hotel infrastructure.
There are three developments on St. Croix that have gone through most of the permitting processes, Doty says, with the closest to breaking ground likely being a William and Punch resort development on the western end of the island.
The overall development package in the U.S. Virgin Islands is probably one of the most attractive in the Caribbean region, Doty says. It also has the stability of being a U.S. territory and it’s an established product with marketing support.
Because St. Thomas has received the lion's share of cruise arrivals to the region for many decades, Doty says it has helped significantly for the branding of the island as a well-known destination. A number of major brands are available on St. Thomas, including Marriott, Ritz-Carlton, and Best Western. In the last few months, about four new restaurants have opened in the district, Doty says, and its newest attraction is a Magic Ice Gallery. In December 2011, the Frenchman’s Reef Marriott Resort in St. Thomas officially reopened after a $48 million renovation, and Sugar Bay Resort & Spa announced that it would start renovations in June.
Each of the islands has it’s own distinct flavor. St. Thomas is more metropolitan, St. Croix is cultural and historic in terms of its offering, and St. John is more appealing to travelers who are seeking a more natural, eco-environment since two-thirds of the island is national park. St. John only has two major hotels—the Westin St. John Resort & Villas and Caneel Bay, a Rosewood Resort. The majority of the island’s accommodations are an array of villas, which account for the heaviest development there in the last few years in the accommodations sector. There are about 1,500 timeshare units on all three islands, which represent about 20 percent of the total inventory.
Doty says the U.S. Virgin Islands offers a small hotels program that targets properties with 50 rooms and under. These properties can receive assistance with marketing, securing financing, and technical support, such as with energy saving and safety/security measures they can implement to become a more efficient operation.
The U.S. Virgin Islands also has a very healthy airlift situation. Year-over-year, they will have added 100,000 seats to the territory on an annual basis, Doty says. Jet Blue started flying into the territory in December, with flights from Puerto Rico to St. Thomas and St. Croix, and from Boston to St. Thomas. US Airways now flies out of Philadelphia five days a week and out of Charlotte daily to the territory, she says. The U.S. Virgin Islands has also added international service out of Toronto and Copenhagen into St. Croix. “We believe that it should certainly move the barometer,” Doty says, in regards to attracting more travelers.