Bermuda still benefits from America’s Cup rate increases

Published on August 11th, 2018

A year after the 35th America’s Cup was held in Bermuda, the British territory reports how visitor spending has risen for the tenth consecutive quarter.

According to the Bermuda Tourism Authority, tourists spent $96.2 million in the second quarter of the year, up $5.6 million on the $90.6 million recorded for the same period in 2017.

The America’s Cup competition in 2017 began May 26 and concluded on June 26.

While there was a lower average spend per visitor, the overall number of tourists increased. Visitors spent an average of $1,444 in the quarter, compared with $1,567 in the same quarter in 2017.

BTA chief executive Kevin Dallas said: “Visitor spending was up by 6 per cent, which is remarkable when considering the quarter last year featured the America’s Cup.

“Even more incredible is that 6 per cent is the tenth consecutive quarter of growth in visitor spending. Our visitors have now been spending more per quarter for 2½ years. That is an incredible comeback.”

Dallas said 66,604 visitors travelled by air to the island between April and June, compared with 57,796 in the same period of 2017.

Much of the increase came from Boston — there was a 66 per cent rise in air arrivals from the US city in the first half of the year. Dallas credited the improvement to the BTA’s marketing partnership with JetBlue.

“That doesn’t mean we write JetBlue a cheque. That means we go in to market to promote Bermuda as a destination with JetBlue,” noted Dallas.

“In exchange for that agreement, JetBlue increased its service to New York and introduced a daily service year round from Boston, which now competes with Delta. When we have competition on a route, prices tend to fall as there is more capacity and seats to fill, so we see more visitors.”

Arrivals from other cities such as New York, Toronto and Washington DC also increased, but arrivals from Britain fell.

Cruise ship arrivals rose by 18.7 per cent due to an earlier start to the cruise season and the Norwegian Escape replacing the smaller Norwegian Breakaway.

But the number of yacht arrivals fell because of the lack of the America’s Cup competition and fewer vessels transitioning between the Caribbean and the Mediterranean.

Hotel occupancy was also up in the quarter — hotels reporting 78.3 per cent occupancy — a 5 per cent increase on the same period last year.

The average daily rate charged by hotels fell, but the higher occupancy resulted in a 3.1 per cent increase in revenue per room.

“Rates were significantly increased for the America’s Cup, but they haven’t actually come down by as much as we thought they might,” reported Dallas. “Its pleasing to see we have had increases in hotel occupancy at rates that are really not much lower then what we were seeing a year ago.”

The BTA is optimistic about the second half of the year, despite some airlines ending their summer schedule earlier than last year.

“When they start their summer season or end their summer season, it’s not really due to demand from Bermuda,” admitted Dallas. “It depends on when they are making global fleet changes. That is something that will negatively affect us in the second half of the year.

“We know both American Airlines and United Airways are switching to their fall schedules much earlier then we would like, which means the DC service and the Charlotte service will end earlier than we hoped and American will be cutting back from two flights a day to one flight a day out of New York earlier than we expect them to, based on demand.”

The BTA remains focused on getting a regular year-round service to Washington DC, services to other areas in the US Northeast and competition for the British Airways route between Bermuda and the UK.

“We continue to work with Skyport on those, we continue to talk to airlines about them,” said Dallas. “Nobody wants to pay someone to fly an empty plane, so what we are trying to do is avoid offering guarantees, but offer co-operative marketing the way that we do today with JetBlue as an incentive to consider starting a new service.”

Source: The Royal Gazette

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