Tourism: Hotel Comeback Is at 70 Percent and Rising

Joseph Boschulte addresses the 2019 Destination Symposium about tourism in the territory. (Photo provided by the USVI Hotel and Tourism Association)
Joseph Boschulte addresses the 2019 Destination Symposium about tourism in the territory. (Photo provided by the USVI Hotel and Tourism Association)

Most of the territory’s hotels are operating at capacity, with a few more scheduled for opening by December, leading to optimistic predictions for the upcoming 2019-20 tourist season and for full recovery from the 2017 hurricanes.

There are a few notable exceptions.

The territory’s largest hotel, Frenchman’s Reef Resort, which had 479 rooms when Hurricane Irma devastated it in September 2017, is not expected to be back on-line before the fall of 2020, according to Tourism Commissioner Joseph Boschulte.

New owners of the property, DiamondRock Hospitality, announced in June that they have spent $60 million on renovations and plan to spend another $200 million. The hotel had been slated for opening in the spring of 2020, but in an interview Tuesday, Boschulte said that hotel representatives who attended the USVI Hotel Association’s Destination Symposium last week said that the estimated opening is now late in 2020. It is unclear whether the hotel will retain the Marriott flag; there was not an immediate reply to an inquiry left at the company phone number Tuesday.

Another large St. Thomas property, Sugar Bay, has not announced a return date. Currently it is renting half of its 300 rooms not to tourists but to relief workers, according to association records.

On St. John, the landmark Caneel Bay resort remains locked in a lease dispute and there is no indication when it might reopen its 166 rooms.

The two largest hotels on St. Croix are also closed and not expected to operate much, if any, of the upcoming tourist season. No date has been set for the return to service of 151 rooms at Carambola, which only recently changed hands.

Divi Carina Bay resort was projecting an opening towards the end of this year, which would have put it in play for the season. However, Boschulte said, “They encountered some hiccups” in the form of regulatory requirements and now anticipate opening sometime in the first three months of 2020.

Exceptions aside, both Boschulte and Lisa Hamilton, president of the USVI Hotel and Tourism Association, said the recovery numbers are good.

“Seventy percent of (hotel) rooms in the territory are open,” Hamilton said, and more soon will be. On St. Thomas, The Ritz-Carlton, which has 180 rooms, and Bluebeard’s Castle with 82, are expected to open in December. A few small-to-mid-sized properties are expected to open next spring.

As of July, according to association figures, there were 1,650 hotel rooms operating in the St. Thomas-St. John district and 421 on St. Croix.

“Anybody who’s open right now is running high occupancy,” Hamilton said. “Those that are open are doing well.”

Airlift is also at 70 percent, Hamilton said. But it, too, is expected to rise.

“By December we’ll have 90 percent of our lift back,” Hamilton said. “That shows hard work by (the Department of) Tourism.”

Boschulte said his department has been keeping close tabs on airlift, hotel occupancy and cruise arrivals, calling them the benchmarks for tracking recovery.

One factor that needs close consideration is the number of relief workers who are using hotel rooms.

Boschulte said his department doesn’t have a “scientific” measure for that, but “we do the eye-test.” From observing incoming flights, he estimates that in the first months after the storms, 80 percent or more of the people coming to the territory were workers related in one way or another to recovery efforts. Less than 20 percent appeared to be residents or tourists.

“We definitely have seen a shift,” he said. Now, it seems about 60 percent of passengers are leisure travelers.

Recovery-related workers will continue to be a factor for the foreseeable future, as federal recovery and mitigation funding is expected to continue flowing into the territory over the next few years. But Boschulte said he believes many will move out of hotels and into more long-term housing.

Noting there’s a “symbiotic” relationship between hotels and visitor attractions, Boschulte said the progress on hotel recovery is spurring the opening and reopening of restaurants, bars and shops.

On St. Thomas, the revitalization project has finally reached the last block of Main Street and he is hopeful it will be completed by season.

One attraction still lacking is that island’s 18-hole golf course. Mahogany Run has been closed since 2017 and is up for sale.

“That’s very close to my heart. I play golf. I’ve been in Purgatory,” Boschulte joked, adding more seriously, “As a high-end destination, the offering of a golf course is important.” The “bright spot” is that the territory does have courses on St. Croix, he said, although he conceded it isn’t practical for most people to island-hop just to play a round of golf.

Asked about the boating community, which was hard hit by the storms, Boschulte said this season he has observed more yachts coming into the islands, signaling some recovery. But the industry was lagging long before the hurricanes and needs support.

He said that many charter boats rely on beaches, shoreline restaurants and floating bars to help entertain guests and added, “We need more of those kinds of places.” He also noted that Gov. Albert Bryan has expressed support for the marine industry.

Overall, preparing for the upcoming tourist season, Boschulte said, “We are optimistic with the direction we see the territory moving.”