Last week the Bermuda Tourism Authority reported that Bermuda had reached “a significant turning point”. Let’s look at this claim a little closer, given that in 2023 visitor arrivals were 714,000 versus 808,000 in 2019.

So do you think we have entered the phase of “a significant turning point” versus 2019? A total of 185,000 air arrivals in 2023 is the lowest ever — excluding 2020, 2021 and 2022, which can be dismissed as pandemic-related and are accordingly not included in this analysis — but cruise arrivals are the second highest ever. This means the visitor numbers are up owing to cruise visitors.

In 2015, the BTA said that its priority was to rebalance the proportion of air versus cruise arrivals since “cruisers were spending so much less money than fly-in visitors, spending $1 for every $11 spent by air visitors who buy hotel stays and dine in local restaurants”. Its aim was to have “52 per cent of visitors arriving by air and 47 per cent by cruise ship by 2022”. That has clearly not happened. In 2015, the percentages were 40 per cent air arrivals and 60 per cent cruise. In 2023, the percentages were 26 per cent air arrivals and 74 per cent cruise.

Consider this.

For the BTA to get to its 2015 stated goal of 52 per cent air versus 47 per cent cruise — let’s say we keep cruise-visitor numbers static at the 2023 figure of 525,000 — we would need approximately 581,000 air visitors, an increase of 396,000 or more than 200 per cent on existing air-visitor numbers. That is an impossible task.

The 2023 BTA report estimated that air visitors spent an average of $1,841.47 on their stay in Bermuda. Cruise visitors spent on average $287. So, in total, 525,000 cruise visitors spent approximately $151 million while 185,000 air visitors spent about $341 million. It remains clear that it is far better to attract the air visitor in terms of bang for the buck to Bermuda!

Consider that to match the air-visitor spend, each cruise visitor would need to spend almost 6½ times more than they do now — or $1,554 more per person. However, assuming the cruise visitors won’t just spend more because we tell them to, we would need to increase the number of cruise visitors by approximately 675,000 to about 1.2 million (more than 120 per cent) to get to the same spend as air visitors.

On the hotel side, at the end of 1990 there were 4,248 licensed rooms — hotels and guesthouses — in Bermuda. By the end of 2023 that number was 2,541. That is approximately a 40 per cent drop. Correspondingly, there was a 57 per cent drop in air visitors since 1990. Do you see the correlation?

These statistics go to the root of the problem, and I heard this time and time again when I had meetings with airlines from 2016 to 2017. Airlines will not increase airlift to Bermuda without more hotel rooms — which is just part of the reason why there was significant push for hotel development between 2013 and 2017. Equally, hoteliers say there is little point in building hotels without airlift!

It is the typical chicken-and-egg scenario. That is the conundrum.

The bright light right now is BermudAir. It is aggressively doing what it can to increase airlift to Bermuda. It needs to be supported and highly commended. Maybe then we can encourage hotel development. Alternatively, or in tandem, we can massively increase our cruise visitors. We need to make serious decisions. Are we a cruise mecca or a hotel holiday destination? Per the above, historical trends show that as cruise numbers increase, airlift decreases. As airlift decreases, so do hotel rooms and vice versa. Either way, without serious planning reforms, transportation revamps, infrastructure investment and finding ways to lower hoteliers’ costs, I suspect we will have to continue to increase cruise-visitor numbers. And of that, I am not a fan.

In searching for data, I came across this interesting piece from the Chicago Tribune from 1989 that quoted the Voice of Summer, C.V. “Jim” Woolridge, who was then the tourism minister:

“Bermuda is compact and densely populated, with a land area of only 22 square miles and approximately 57,000 residents. After lengthy study and debate, the government study concluded that 600,000 visitors a year is the maximum the place can absorb and still avoid serious people pollution; that is, prevent crowding and maintain traditionally high standards of service and accommodation. If Bermuda is to remain Bermuda as we know it, there has to be a cap on tourism, we have to protect what we have. The tourist-limitation policy is expected to remain in effect at least ten years.”

If only we had that problem now. I suspect we will not, given the cutting of the BTA grant by $2.46 million in this 2024-25 Budget.

• Michael Fahy was the Government Senate Leader and Cabinet minister in the One Bermuda Alliance government from 2012 to 2017. Share your ideas and views at opedfahy@gmail.com