It’s still unknown when cruise lines might resume operations as the COVID-19 pandemic continues to rage, but government leaders are doubling down on the Long Bay Landing project in an effort to attract new megaships to the Virgin Islands.
V.I. Public Finance Authority board member Dorothy Isaacs pushed back during the second half of the PFA’s annual meeting Thursday, saying the investment is a risky move that will do little to benefit the local community.
The West Indian Co. is forging ahead with efforts to find investors to finance the new cruise pier that would be located on the opposite side of Yacht Haven Grande from the present WICO dock, and interim WICO President and CEO Anthony Ottley said he expects cruise lines will pay upfront for the project in exchange for breaks on the per-head embarkation tax when passengers use port facilities in the Virgin Islands.
“Ultimately we are paying for it. That’s exactly what you’re saying,” Isaacs said. “I will fight this thing to the end because I think it’s ill conceived, it’s expensive, the cruise ships are going to be the one making the money, and we’re going to be the ones paying for it. Not only in the money we’re going to pay for it, but in the inconvenience to all St. Thomians really, every day when we have to cope with these people.”
Several officials argued that the Virgin Islands is completely dependent on cruise ship tourism for economic survival, including Tourism Commissioner Joseph Boschulte, and the territory has no alternative but to do whatever it takes to keep the cruise lines happy.
“Tourism represents 60% of the Virgin Islands GDP,” said Boschulte, who also serves as Chairman of the WICO board.
“You don’t think I’m aware of that, Mr. Boschulte? You don’t think that being a lifelong Virgin Islander, that I am aware we’re dependent on tourism?” Isaacs replied.
“The size of the ships in the industry are expanding, and if you want to have a presence in that business you have to adapt,” Boschulte said. “We need to expand our hotel industry, that is where a lot of the money is,” Isaacs said. “People who come here for a week, they rent a car, they take taxis, they go to our restaurants, they shop in the stores, they go to our activities. Those are the people who can sustain us. And a lot of the Airbnbs are filled to capacity because a lot of people do want to come here for more than just a day for four or five hours on a cruise ship.” It’s been nearly a year since the COVID-19 pandemic shut down cruise operations, and “the projected direct economic loss to cruise passenger arrivals for the first six months of calendar year 2021 is $240,511,463,” Donnie Dorsett, senior policy analyst for the Bureau of Economic Research, testified at a Senate committee recently.
For the first quarter of fiscal year 2021 — which began on Oct. 1 — hotel room revenues are down approximately 65.1%, Dorsett said, but Airbnb room tax collections for the same period rose 65.2%.
“We’re not the drivers of the industry, we’re the responders,” Gov. Albert Bryan Jr. said at the PFA meeting Thursday which he oversaw as the authority’s chairman.
Cruise ships “keep getting bigger and bigger,” and if cruise ships do resume operations, it’s expected that social distancing will mean they have a smaller-than-normal passenger load.
The V.I. Port Authority is considering putting another berth in Crown Bay, and “redevelopment of that whole Sub Base property is to give people things to do and see when they come here, it’s important to our survival,” Bryan said.
Bryan said it’s been 40 years since a new hotel was constructed in the territory, and Isaacs gave him credit for trying: “You’re the first one I’ve seen that has tried to get hotels in here.”
Bryan ticked off the list of hurricane-damaged hotels that have not reopened, and said despite myriad new initiatives and tax breaks designed to attract more hotel development, “none of these things have come to fruition.”
The territory has to “keep our tourism game in terms of cruise ships tight too, because when you look at our total arrivals, I think of the 2 million tourists we had at the peak of tourist season, I think about 1.6 million of them were cruise ship passengers. And they spend a considerable amount of money on tours in the Virgin Islands,” Bryan said.
“I’m not head over heels about another port in Charlotte Amalie harbor,” Bryan added, but “in order to be competitive and not get skipped out, we have to do this.”
“I just want us to not end up with an albatross in the harbor and these cruise ships decide they’re not going to come here anymore, or they’re not going to come as often,” Isaacs said. “As I said, they’re out for themselves and we could end up with this behemoth of a dock to accommodate these huge ships and then something like this virus happens that was totally unexpected, really, and we see what happens. Everything came to a screeching halt and there’s no guarantee yet when they’re going to come back.”
Bryan said cruise ships returned quickly after the hurricanes and invested in recovery projects, including Magens Bay and Emile Griffith ball park on St. Thomas, so “good cruise ship, bad cruise ship, I think we just need to watch our pockets and make sure that we take advantage as much as possible of our strategic opportunities as a premier destination in the Caribbean.”
Board member Keith O’Neale Jr. said the PFA-owned Frederiksted Mall and its business tenants have been suffering without cruise ship traffic, and he hopes St. Croix can attract more ships when the pandemic eventually subsides.
“I understand there’s the good and the bad of the cruise ship industry,” O’Neale said, but the “economic hard truth is we need cruise ship passengers for our revenue. That’s the hard truth.”
“We’ll just have to wait and see what happens in the next series of months as the cruise line industry hopefully gets back on its feet,” Boschulte said.