Address by Premier Dr. Ewart Brown, Minister of Tourism & Transport
Good afternoon ladies and gentleman. Thank you for joining us for the 2009 second quarter report for the Ministry of Tourism and Transport.
I want to begin in an area I am immensely proud of because of how significantly it will factor in the way we do business going forward.
During the Tourism and Transport first quarter report I explained our 2009/2010 sales and marketing plan and the importance we have placed on digital marketing strategies. We have made significant progress in this area – some of it has already been reported by local media.
I want to take a moment to breakdown some of the numbers to give the public and the industry a greater sense of our efforts to significantly enhance our digital marketing capabilities.
At our BermudaTourism.com website, visits are up 81.9% in the second quarter of 2009 when compared to the same period in 2008. We had several high impact promotions on the site in the second quarter and we attracted more than 301,000 visits.
Page views were up 49.9% to 2.7 million. This means consumers are now spending more time while viewing more pages and sections of our site which tells us the new look and information we have created is working.
And finally the bounce rate for BermudaTourism.com is down 48.5%. This number reflects the instances of consumers visiting the site and then quickly leaving. A reduction in this number means consumers are staying longer on our site, increasing the likelihood they will book a vacation.
Meantime, good news in search as well. Major natural search initiatives have moved BermudaTourism.com to the number one results spot in a Google search of the word: “Bermuda”.
In the past we have been at third and sometimes fourth position.
We believe this trend will continue which is important because search is a cost effective way of touching our target audience and we will continue to increase investment not only with our own website development but also with our online distribution partners.
These numbers are very encouraging. In fact they are exciting. I have supreme confidence we are moving in the right direction on our digital marketing strategy and I will be compelling our internet group to keep their foot on the gas pedal. Increased traffic to the website, despite fewer visitors, is an extremely encouraging indicator that our goal to increase destination awareness is definitely working and this augurs well for the future.
Credit due to i-crossing, our new digital marketing partners, as well as our own Tourism Department marketing team in New York and here in Bermuda.
Now onto the arrival statistics for the second quarter of 2009:
Total visitor arrivals for the Second Quarter of 2009 decreased 7.96% to 203,061 visitors, compared to 220,634 in the same quarter of 2008.
Air arrivals for the second quarter fell 14.27% compared to the same quarter in 2008. A total of 74,979 visitors flew to the island during this quarter down from 87,455 in 2008.
Residents from the United States continue to dominate visitor arrivals with three-quarters of all air visitors stemming from this region. The remaining visitors from Canada, UK, Europe and the Rest of World account for 10%, 9%, 2%, and 4% respectfully.
All categories of commercial properties except small hotels showed declines this quarter with an overall decline of 16.49% for visitors staying in commercial accommodations.
Overall, air visitors stayed on island for an average of 5.74 nights in the second quarter, down slightly from 5.99 nights during the same period in 2008. Visitors staying in commercial properties stayed an average of 4.66 nights down from 4.8 nights in the second quarter of 2008.
Cruise arrival figures totalled 124,553, compared to 129,344 for the second quarter in 2008. That’s a decrease of 3.7% or about 4,800 passengers.
Reasons for the decrease included a slower than projected April 2009 and a cancellation in May due to inclement weather affecting the Caribbean Princess which would have brought approximately 3,000 cruise passengers to Bermuda. And then later in the quarter, May and June cruise arrivals were higher than projected.
• April was down 52.8% year over year;
• May was up 38.8%;
• and June was up 0.7%
Since opening on April 29, a total of 52,000 cruise passengers have moved through the new Heritage Wharf facility at Dockyard. The cruise ships docking at Heritage Wharf have contributed approximately $12 million to Bermuda’s economy, including Government fees, on-island expenditures, shore excursions and other fees paid to the West End Development Corporation.
The Heritage Wharf cruise complex has been well received by retailers, tour operators and the cruise lines, and has generated a higher level of excitement to Dockyard. Now when we talk about Heritage Wharf it is no longer a vision, it is real. I invite Bermudians to visit the new Dockyard with their families and enjoy this new development in Bermuda Tourism.
Now to yacht visitors: there were 3,529 visiting yachtsmen sailing to the island during the second quarter of 2009, a decline of 7.98%. The biennial Newport to Bermuda race, held last June, usually causes a dramatic drop in yacht visitation for the years in which it is not held; however the arrival of the Tall Ships this June softened the blow as 1,104 yachtsmen sailed to the island as part of this event.
Beyond the numbers, the second quarter can best be described as the period when Bermuda Tourism intensified its plan to deal with the significant phenomenon of the economic downturn that is facing the entire travel industry worldwide.
As we outlined in the first quarter the strategy was about:
• Concentrating on the core Northeast market
• Developing promotions that drive business, in conjunction with our hotel partners
• Continuing to leverage the 400th anniversary
• And, as mentioned, heightening our digital marketing strategy.
It is clear that this four-pronged focused approach, emanating from the 2009 Sales and Marketing plan, served to arrest the downward spiral and contributed to a satisfactory levelling off of business.
The second quarter saw significant dialogue and partnering with hotels and this paid off with positive promotions that garnered good business in a difficult environment. There has been some compromising of average room rates in the process and this should not be overlooked. It will affect the bottom lines of hoteliers without a doubt, but, in this regard, we are no different from every other destination that is currently competing for business.
In order to gain a voice in this very competitive market Bermuda needs to stand out in what has become a “sea of sameness” in terms of creativity. We will meet this challenge with a new campaign.
Our agency of record, GlobalHue, developed and launched new ads capitalizing on Bermuda’s proximity from the East Coast. The progressive work highlights the idea of Bermuda being a world away in only two hours. This is not a new message, but it has been conceptualized in a new way and the creativity has been well received by consumers and industry representatives alike.
The print is modular in that it can accommodate messaging specific to the city in which it is being seen, while also highlighting airline and hotel offers specific to the geographic location of the traveller. Success was particularly evidenced in this area as a result of the Boston JetBlue promotion.
Production on television spots was completed just days ago and will launch in New York, Boston, Washington D.C. and Philadelphia before the end of the month. I am thrilled to unveil these fantastic new television commercials here today. Before we roll the tape let me just point out that these modular spots will showcase activities on the island including the beautiful new Port Royal Golf Course, as well as proximity to the East Coast. TV also plays on the idea of Bermuda being a world away in only two hours. Let’s watch.
We are very pleased with these new ads produced by GlobalHue under the direction of our Tourism team in New York.
Convincing Bermuda’s target consumer, the Urbane Traveler, to choose Bermuda as a destination in this economic climate is a great challenge. This upwardly mobile segment has always been hard to capture from a media perspective. They are worldly and have high travel expectations with a large variety of destinations to choose from. And now, as a result of the economic climate, competitors are on sale, promoting packages at very low prices.
The campaign’s main objective is to drive immediate visitation, which means the work must be able to accommodate a retail message, promoting hotel and airfare price points wherever possible. Given that Bermuda’s competitors are relying on slashing prices to drive visitation, without concern for the effects of this behaviour on the brand, it was clear the new campaign would need to sell the island without cheapening the brand in order to differentiate Bermuda and preserve its reputation.
With proximity as the key driver and the single idea “Bermuda, the getaway that actually takes you away” as a starting point, the team crafted the creative platform: “A world away in just under 2 hours.” The resulting work takes advantage of new technology to convey this sentiment. In my view the new campaign has real stopping power.
The campaign tested extremely well among consumers and was said to be attention grabbing. Consumers responded strongly to proximity as a key selling proposition for Bermuda, validating the strategic approach. The work enabled them to see Bermuda as a short break destination comparable to or even easier to reach than many stateside vacation locales.
The campaign has launched in New York, Boston, Charlotte, Miami, Orlando, Philadelphia, Toronto, Washington D.C. in publications, and for the first time ever, on Billboards in key gateways such as New York at the Holland Tunnel and Boston near the airport where in excess of 7 million people will see them daily.
Speaking of Boston, I want to take a moment to talk about our robust partnership with the Boston Red Sox and the New England Sports Network.
On June 19th, our Tourism team descended on Boston’s Fenway Park with heavy resources, making a noticeable impact on this important market. Past Bermuda idol winner Laritta Adderley sang the U.S. National Anthem, Press Secretary and former Boston TV reporter Glenn Jones tossed out the ceremonial first pitch, the Bermuda Gombeys performed in the concourse, we hosted media professionals, captured data, pitched Bermuda to baseball fans and posted continuous updates on Twitter – another aspect of our digital strategy.
We also partnered with JetBlue on the 19th, one of our most important airline partners in the market. We are grateful to them for the resources they dedicated to Bermuda on that evening. We think Bermuda Night was a success evidenced by the post-event media attention and the feedback from baseball fans and industry partners.
Coming up on September 8th we will be back at Fenway Park to heavily market our product once again. It will not be a Bermuda Night this time, but thanks to a post-contract agreement negotiated by GlobalHue, we have a second bite of the cherry to woo Sox fans to Bermuda.
This time we will focus on the upcoming golf and spa season and we are getting almost unprecedented participation from our hotel partners who want to be a part of this promotional opportunity to premium ticketholders at Fenway Park. We have also joined forces with Gosling’s to mutually benefit two strong Bermuda brands.
Our Sox partnership also includes marketing opportunities at the PGA Deutsche Bank Championship with Tiger Woods next month. This tournament takes place over Labour Day weekend in Norton, Massachusetts. So between September 3rd and September 7th we will be pouring heavy resources into this event where we will be promoting the PGA Grand Slam of Golf and the new Port Royal Golf Course.
With these focused promotions in Massachusetts in 2009 we expect to see a growth in visitors from the Boston market.
Along with our own focused promotions in that city, we also spent resources partnering with local hotels on an even wider scale.
We assisted the Fairmont Southampton with a “$99 over 99 hours” promotion that produced 14,554 room nights. To put this achievement in some perspective this equated to 75% of one entire month of business for that particular hotel – an excellent achievement and congrats to them on this bold initiative.
BDOT also partnered with more than 12 hotels for a Sizzling Summer 400th Anniversary sale that has, as of June 30, 2009, produced an incremental 15,164 room nights to the island’s hotels. Bermuda Tourism has directly supported the hotel industry with cash payments of more than $750,000 in these promotions in the past year. So you’ll have to forgive me for vehemently opposing even the mere suggestion that the Government does not support their hotel partners. We do support them. Their successes are our successes and vice versa.
June first and second also saw a very successful 50% off 48-Hour Sale that achieved 4,164 room nights to more than ten hotels.
These promotions have all been available to consumers, both as a direct booking option as well and through the major wholesale and online distribution partners.
Speaking of which, the results have been very encouraging for the online operators. I consider this to also be a part of our digital marketing strategy.
• Expedia is up 33% year to date
• Orbitz up 45%
• Travelocity up 35%
• And Purely Bermuda, a key UK online operator, up 36% with some of these major promotions.
The projected room nights for this group for year end is currently up 40% or approximately 56,000 room nights of increased business. This movement in the numbers speaks very well for the future.
In airline news, Bermuda has been very fortunate during this challenging period to have maintained virtually all of its air service, while at the same time forging much closer partnerships with all of our airline friends.
Delta re-launched its new service out of La Guardia on May 23.
JetBlue reintroduced its seasonal flight out of Boston and this year is seeing double digit improvements over the previous year’s business.
British Airways announced an additional flight for winter 2009 /2010 and a team of tourism officials have already travelled to London to have intense discussions with BA on making this increased service a success.
American Airlines, obviously seeing the potential of its Miami service, has announced an increase from five flights weekly to a daily schedule this coming winter. We will obviously be working with them to ensure long term success.
We are very pleased to have worked with all of these airlines to ensure great airfares to the island during this challenging period.
Overall, the average fare from the Northeast is at least half of what it was five years ago and this is in large measure due to our ability to partner effectively with them.
There is also an important development to share on aviation safety. In the second quarter, L.F. Wade International Airport became home to two new Rosenbauer ARFF six-by-six Panther vehicles.
That fancy name may not mean much to you and me, but it means a great deal to the Bermuda Fire and Rescue Service. These two vehicles are paramount in Bermuda’s ability to provide fast and efficient response for aircraft emergencies. Should there be an aircraft fire or some other mishap at our airport our Fire Service is now better equipped to save lives. As the Minister responsible for Transport I am comforted to know we have wisely improved the level of safety for Bermudians and visitors… or anyone who works or otherwise uses L.F. Wade International Airport.
Just like the rest of the country, Tourism has been looking for ways to mark Bermuda’s 400th Anniversary. I mentioned earlier the way it has assisted us with “Sizzling Summer 400”. It has also helped us tremendously with public relations activity.
The WPIX TV promotion has also been significant in the New York market. In May alone, more than 17,000 entries were received in the May Bermuda-Bound Giveaway on WPIX. Also in May that promotion was seen by an estimated 4.8 million people, which equated to a media valuation totalling over $90,000.
For Bermuda Day at Fenway on June 19, 2009 the media exposure included, but was not limited to NESN, Boston Globe, Boston Courant and Boston Herald.
The UK and European markets have also been active with several press trips to the island resulting in coverage in The Times, Daily Mail and many European titles.
Let me switch over now to transport where there are some important updates to share.
You may recall the Bermuda Emissions Control Ltd. assumed responsibility for the Safety and Emissions Inspection to all motorized vehicles back at the start of the second quarter. I am advised by the Director of TCD that all the hard work leading up to this transition has proven successful as customers have adjusted well to the new testing procedures. With three testing lanes for cars and trucks at the North Street facility as well as testing lanes at Southside and Rockaway; we expedited the examination process considerably.
I also want to congratulate the TCD family on its nomination by The Bermudian Magazine as the Best of Bermuda for Government Service 2009. Not many years ago Bermudians would not even consider TCD for a service award like this. But now look… they are considered among the best. Surveys showed customers were very pleased with the service they are receiving. I have been advised that the team at TCD were overjoyed at the news… and they should be. Well done!
Meantime at the Department of Civil Aviation, they have interviewed three applicants for the Public Service Bursary Award Scheme 2009. Of these three applicants, two were in the field of Flight Operations and one in Airworthiness. The interview panel put forward recommendations to the Public Services Commission for one person in each field of expertise. The PSC reviewed the recommendations from all Government Departments and I am pleased to advise that they awarded Emily Siggins a Bursary for Flight Operations.
Ms. Siggins was recommended for the Flight Operations Bursary as she clearly indicated her desire for pursuing this career path and was able to articulate her action plan to accomplish this. She is embarking on a Bachelor’s degree in Flight Operations and Aviation Management at the Florida Institute of Technology, starting this month, and intends on following this with a Master’s degree in Human Factors. Ultimately, we hope to see Ms Siggins join the DCA team.
Sticking with human resources, I can report that the Department of Tourism re-organization in NYC has been finalized.
The intent now is to bring in high calibre individuals who will work closely with the Director of Global Operations having the skill sets that match the changing market and understanding consumer buying habits not only in our key feeder markets of the US but also internationally.
We need a “Results” driven team that will continue to deliver the growth that I have outlined before.
Announcements will be made in the very near future that clearly indentify the representatives for key markets of UK and Canada.
Great progress has been made in the second quarter to advance the formulation of the Bermuda Hospitality Institute. I had hoped for a second quarter launch, but we are now looking at a launch in this quarter.
The BHI will serve to lead and encourage the development, growth and sustainability of Bermudians in the hospitality industry. It’s goal will be to encourage young Bermudians to pursue Hospitality as a career while simultaneously encouraging the current workforce of the merits of rejoining the industry or considering the hospitality field as a second career choice.
The entire concept will be presented to Cabinet shortly and there will be ads in the press for an Executive Director by the end of this week.
We continue to prepare for a Bermuda hospitality industry that will be more appealing to Bermudians than it is currently. Although the industry has seen a slowdown worldwide, the industry will re-emerge.
Already, in just the first six months of 2009, we have seen a slowdown to the slowdown. Visitor arrivals have improved pretty convincingly between the first quarter and the second quarter of this year. Visitor numbers were down 27.84% in the first quarter, but after the second quarter the 2009 year-to-date figure has improved to an 11.28% decrease when compared to the year prior. That is clearly a trend in the right direction. This trend is expected to improve even further in the third quarter.
So for the balance of this year you can not only expect more of the same, but an intensification of more of the same. Our digital marketing strategy is working and you will see more of it. Our promotional partnerships with local hotel partners is driving visitors to our shores and your will see more of it. Our new ad campaign is turning heads and creating buzz – you will see more of that too. Everyone at Bermuda Tourism will be focused on results for the second half of 2009. This is the time to re-tool, refurbish and return to greatness in Tourism.
Thank you for your attention this afternoon. I am happy to take your questions.