Caribbean Bermuda back on track By Johanna Jainchill / February 04, 2015 Share 1 -- Last September, Bermuda's premier, along with two ministers and a senator, spent several days in New York meeting with reporters and business interests and attending the launch of a perfume from the Lili Bermuda perfume company, where they posed for photos with actress Catherine Zeta-Jones. The trip set off such a fervor at home that days later, the government put up a website detailing the costs of all official travel and fired back in defense of the trip's purpose.And a government spokesman told the Bermuda Gazette, the island's leading newspaper, "The trip to New York City this week -- the world's business capital -- is part of the government's work to re-establish Bermuda's profile in overseas tourism and business markets."He went on to describe that profile as having been "diminished in recent years because of the mishandling of Bermuda tourism marketing and antagonistic government attitudes that alienated investors and stakeholders -- key sources for the island's income and jobs."And just to be sure that the political message was not lost on the Gazette's readers, he added: "We want to be clear about one thing: The need and the urgency behind Bermuda's efforts to restore visitor interest and investor confidence in the island today is because of the damage done by the previous government."That assertion was something many Bermudians could relate to. They might disagree about whether the national cocktail is the rum swizzle or the dark and stormy, but one thing locals seem to agree upon is that in terms of tourism, Bermuda has lost its way.That fact becomes very clear when talking to politicians, hoteliers and taxi drivers on this small island, but the numbers tell the story best. In 1980, there were 9,215 beds on Bermuda offered throughout the island's 112 hotels. By 2013, those numbers had fallen to 5,265 beds in 47 hotels. In 1980, 491,000 tourists flew into Bermuda. In 2013, that number had dropped to 340,000. And while a growth in the number of cruise tourists made up for much of the loss of air tourists, bringing total arrivals to 580,000, cruisers spend $1 for every $11 spent by visitors who arrive by air, buy hotel stays and dine in local restaurants. Bermuda finally decided to confront its tourism problem in earnest in 2012, when the government came up with a plan that included dissolving its Department of Tourism and creating the Bermuda Tourism Authority (BTA), putting tourism marketing into the hands of the private sector. "The transition from a government department to a private enterprise is a big one," BTA Chairman David Dodwell, owner of the Reefs, Bermuda, declared on the organization's website in 2012. "The way we run tourism, the priorities we give and the way we go about the business of tourism in all its aspects are going to be different from what we have done in the past. The organizations will be independent, modern and entrepreneurial. We're excited about the change, and we can't wait to get started."Bill Hanbury The BTA, led by CEO Bill Hanbury, an American who formerly headed Washington, D.C.'s destination marketing organization, has been operational for just under a year. But while the horizon is already looking brighter for Bermuda tourism, before the nation started planning a better future, it had to understand the mistakes it had made in the past. An increasingly blurred focusShawn Crockwell The island's precipitous tourism decline did not occur in a vacuum. Today, industry players identify several contributing factors, chief among them the lack of any effort to sustain and promote the industry over the last 20 years. To be sure, there was a reason that happened; unlike many of the world's islands, Bermuda does not depend solely on tourism. Bermuda is a hub of secondary insurance companies, and international business makes up most of its gross domestic product (GDP), with tourism contributing less than 10%. As a comparison, tourism generates 60% of GDP in the Bahamas, Bermuda's closest island neighbor. "International business was extraordinarily successful in the 1980s and 1990s, and basically we dropped the ball as related to tourism," Shawn Crockwell, the minister of tourism development and transport, said at a breakfast with media in New York during the September trip. "For about 20 years, we've seen a steady decline from our best days [for tourism] in the '80s. As our competitors got more competitive, we transferred our focus to international business." Michael Dunkley Michael Dunkley, Bermuda's premier, also attended the breakfast. He said that international business had consumed a lot of the nation's resources because it "just mushroomed." "Now we realize [that] as the world has become smaller because of communication, business can go to any corner of the planet," he said. "We need to pay attention to everything that makes Bermuda tick."In addition, Crockwell said that through the 1980s, "we always set the standard for tourism. ... We were successful doing nothing."By all accounts, the island continued to do nothing for far too long. Victoria Isley Victoria Isley, BTA's chief sales and marketing officer and most recently the COO of Destination Marketing Association International, recalled that "there was the heyday of tourism in Bermuda, when it was the place to go. I've heard people say that Bermuda was resting on its laurels. It wasn't progressing in terms of the way it was marketing, while the rest of the world was waking up to marketing. Tourism was going down here, [while] in rest of the world it was going up."In addition, Bermuda has long been relatively closed to foreign investment, even as Caribbean destinations were welcoming it. The trifecta of marketing complacency, a difficult investment environment and the rise of so many other island destinations created a Bermuda Triangle of problems for the tourism industry. Robert Kwortnik, associate professor of services marketing at Cornell University's School of Hotel Administration, observed that destinations, like brands and products, often go through a life cycle of birth/introduction, growth, maturity and decline. Bermuda's current tourism decline, he said, "speaks to the challenge of maintaining a freshness in the maturity stage of the life cycle.""Bermuda is a mature destination," Kwortnik said. "The challenge for destination marketers is how to manage the destination brand through this life cycle, ideally such that growth [and] maturity is achieved and maintained for a long period of time. And this may require breathing new life into a destination through a combination of new products and experiences as well as [through] a new or modified destination-marketing campaign."Until now, Bermuda has not had much of either. "Part of the allure of many destinations, including Bermuda, is the charm associated with the atmosphere, traditional architecture, etc., that feeds our nostalgic needs," Kwortnik said. "But even nostalgia needs a polish and sometimes a twist to keep things interesting."A 'radical' solution requiredThe formation of the BTA was the most significant result of the Bermuda National Tourism Master Plan unveiled in 2012."We felt the need to do radical things to get us back on track," Crockwell said. Both on and off the island, the move has been met with praise. A humpback whale off Bermuda’s coast. "The private tourism authority makes good sense for Bermuda," Kwortnik said. "My experience working with tourism organizations is that government agencies often suffer from inertia because of having to answer to so many stakeholder groups and because it's, well, government."Public-private cooperatives can effectively bring innovation to destination marketing while "keeping in check" the interests of private-sector members that might try to wield too much influence, he said, adding that sometimes, "the private sector has to push the agenda when it comes to reinvigorating a destination."Among the BTA's initiatives is to persuade more tourists to visit Bermuda year-round, a challenge because compared with Caribbean destinations, Bermuda is not all that warm in the winter. But as Hanbury pointed out, not every tourist wants to go to the beach. Golf enthusiasts, for example, would be very happy to play a round in 70-degree weather in January. The BTA is also heavily promoting Bermuda's proximity to the East Coast of the U.S. and that it's a mere 90-minute flight from New York, Boston or Washington. Jobson’s Cove, Bermuda. "That's a great advantage [compared with] a Caribbean island," Isley said. "We're in the Atlantic. ... A New Yorker who wakes up in freezing cold in the morning can have a dark and stormy in hand on the golf course in the afternoon." Hanbury wants New Yorkers to think about Bermuda year-round, "when they think about the Hamptons, Cape Cod, Martha's Vineyard or Hilton Head." "We are close enough to do that," he said. "We are going to spend significant resources to really change the dynamics of how New Yorkers think about Bermuda." Bermuda’s “Proper Fun” campaign emphasizes the island’s British, Caribbean and African roots. Thus, as part of its new brand positioning, Bermuda is attempting to differentiate itself from Caribbean destinations by marketing itself as an Atlantic island and promoting its mixture of British, Caribbean and African roots, an alchemy celebrated in its new "Proper Fun" campaign. Bermuda talks up its British heritage -- for example, islanders still take tea time, and cricket is the national sport -- mixed with added Caribbean and African spice in its cuisine and culture, such as local Gombey dancers. The government is also banking on its recent legalization of gambling in resort casinos to open a new market to Bermuda. The controversial decision has been contested over the years, but Crockwell promised it would be done on a small scale and that the gambling would be limited to three casino hotels on the island."Bermuda is traditionally a very conservative society," he said. "This government is committed to doing what we need to do to improve tourism in Bermuda and preserve its charms. We are not going to have slot machines all over the island." Another priority is to rebalance the proportion of air vs. cruise arrivals. Paradoxically, as one of Bermuda's recent tourism successes, cruise is something of a mixed blessing. Arrivals by ship peaked in 2011 at 416,000, accounting for 63% of total visitors, compared with just 24% in 1987. But since cruisers spend so much less money than fly-in visitors, a major initiative for Bermuda now is to rebalance visitor ratios, with a goal of 52% arriving by air and 47% by cruise ship by 2022. A Hidden Gems cave tour on Bermuda. However, this doesn't mean anyone wants to see fewer cruise ships disembark in Bermuda ports. "We understand the value of the air arrival because cruisers stay on ship, but [cruise] still contributes an extraordinary amount to the economy," Crockwell said. "We have a booming cruise industry. ... The top brands are coming to Bermuda, and they are really jockeying for position. We are established as a premier cruise destination. It's an extraordinary aspect of tourism that is growing. We want to create more experiences and products for the cruise ship passengers to come and spend their money on." The future grows brighterAfter less than a year, stakeholders in Bermuda tourism are already seeing the fruits of the BTA's efforts."It's changed dramatically," said Ashley Harris, the owner/operator of excursion company Hidden Gems of Bermuda. "There are great things going on in terms of boosting Bermuda altogether and in so many different aspects and realms. ... They've made so many connections and are trying to put Bermuda back on the map where it should be as one of the best destinations in the world."At more than any time in the last two decades, a slate of projects and events suggests the island's future is brightening.A rendering of the America’s Cup Village at Bermuda’s Royal Naval Dockyard. Perhaps most exciting for Bermuda was its November selection to host the 35th annual America's Cup sailing race in 2017. The high-profile event is expected to have a significant impact on Bermuda's tourism industry. Hanbury described it as "the beginning of an exhilarating new chapter for Bermuda," because the race would shine "a brighter spotlight on Bermuda as a stunning venue for such an amazing global competition."He predicted that the America's Cup will "act as a catalyst for further investment and revitalization of Bermuda and her assets by both the government and the private sector." To support the event, Bermuda will build an event village near its main cruise terminal, the Royal Naval Dockyard. The Fairmont Hamilton Princess. In October, prior to the announcement, the Fairmont Hamilton Princess hotel opened the island's first marina accommodating super-yachts. Between now and 2017, 770 rooms are currently slated for development. The largest of the projects is at Morgan's Point, where an 84-room boutique hotel and a 416-room luxury hotel are scheduled to be built in time for the America's Cup. According to the Gazette, Ritz-Carlton is rumored to be the operator of the high-end property. Michael Douglas was in town last fall for the groundbreaking on the redevelopment of Ariel Sands, a resort owned by the actor's family for more than 400 years, into the Ariel Sands Beach Club, a five-star, 80-room cottage colony slated to open in 2017. And several of Bermuda's main hotels are making multimillion-dollar improvements. Perhaps most significant to the island is the investment by the Fairmont Hamilton Princess. The hotelier will pump $90 million into a two-phase renovation of one of its two island properties, which together account for just under half of the room inventory on Bermuda. The Fairmont Hamilton Princess’ 1609 Bar & Restaurant. The 410-room hotel has already opened the property's new 60-berth marina, infinity pool and renovated rooms and suites. The marina development includes a new harborside eatery, the 1609 Bar & Restaurant. This spring, it will debut a restaurant by celebrity chef Marcus Samuelsson and the renovation of guestrooms in the hotel's main building, landscaping of the hotel grounds and upgrades to the health club, spa and retail experience."Bermuda is on its way back," Dunkley declared. "It's roaring back big time, full steam ahead. There are a number of exciting projects out there. It's still paradise, and it's still easy to get to."