An Uptick in AirliftAfter the devasting impacts of Hurricanes Irma and Maria in 2017, the U.S. Virgin Islands, which comprise the islands of St. Thomas, St. John, and St. Croix, faced a significant rebuilding effort to reopen their hotel inventory. As the renovations and reopenings from the 2017 hurricane season were nearing completion, COVID-19 began to affect the islands. However, the U.S. Virgin Islands have a significant competitive advantage over the other islands in the Caribbean because they benefit from U.S. territory status. As a result, the U.S. Virgin Islands avoided the complicated COVID-19 travel restrictions that existed in other Caribbean destinations, allowing the islands to increase visitation numbers after 2020 significantly faster than other Caribbean islands.
Total Visitors to the U.S. Virgin Islands Source: USVI Bureau of Economic Research
Joseph Boschulte, Commissioner of Tourism for the U.S. Virgin Islands Department of Tourism, commented, “USVI’s tourism sector showed great resilience in 2022, with a 116.6% increase in visitor arrivals over the corresponding period in 2021. We expect that 2023 will be a record-breaking year as visitors seek out our beautiful harbors, world-class snorkeling, pristine beaches, top-notch hotels, and delicious local cuisine!”
Cruising Right AlongSt. Thomas has been the second-largest cruise port in the Caribbean for the past several years, with some days seeing as many as seven large ships in Charlotte Amalie harbor at a time. Virtually all of the major Caribbean cruise lines dock in St. Thomas, sailing out of major ports in New York, Florida, and other U.S. cities. After all cruises were ceased in 2020 due to COVID-19, cruises to St. Thomas resumed in July 2021, with total passengers ending 2022 at 71% of 2019 levels.
The St. Thomas port continues to welcome new ships, including the first voyage of the Celebrity Beyond in November 2022. The West Indian Company Limited (WICO) has projected that St. Thomas will host an additional 200,000 cruise visitors in 2023, and cruise-ship passenger volumes for 2024 are expected to exceed 2019 levels in the U.S. Virgin Islands.
Continued Hotel Demand and New DevelopmentThe travel and tourism industry anchors the local economy. The U.S. Virgin Islands saw record-breaking occupancy levels in 2022, despite that the territory-wide occupancy rate includes a significant number of unbranded properties.
As illustrated below, the U.S. Virgin Islands have been able to outpace the overall occupancy in the Caribbean over the last two years given the ease of access into the islands and increased arrivals from U.S. travelers.
Hotel Occupancy Source: STR, USVI Bureau of Economic Research
ConclusionThe U.S. Virgin Islands has a significant competitive advantage over the other islands in the Caribbean because it benefits from U.S. territory status. As a result, U.S. Virgin Islands tourism has benefited from a robust recovery from the effects of COVID-19, supported by the significant increase in tourism from U.S. citizens. With the opening of the Westin Beach Resort & Spa at Frenchman’s Reef and the Morningstar Buoy Haus Beach Resort at Frenchman's Reef, Autograph Collection this spring, the development of other new hotel projects, and continued increases in air and cruise arrivals, the future remains bright for the destination.
To learn more about the Caribbean hotel industry, as well as investment and development in the U.S. Virgin Islands and throughout the Caribbean, join us November 12–14, 2023, for the 12th edition of CHICOS: The Caribbean Hotel Investment Conference & Operations Summit, which will be held at the Westin Beach Resort & Spa at Frenchman’s Reef in St. Thomas.
“On behalf of the U.S. Virgin Islands, we are honored to be hosting CHICOS 2023 at the Westin Beach Resort & Spa at Frenchman’s Reef. Following a more than $425-million investment at this property and its sister property, both will open this spring as the first new properties in 30 years for St. Thomas. These new hotels represent the growth and investment into our islands, and we can't wait to showcase them to our colleagues and friends during CHICOS this fall.” – Joseph Boschulte, Commissioner for the U.S. Virgin Islands Department of Tourism