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White sand beaches can't lure tourists

By Erika Angulo, NBC News Researcher

ST. THOMAS, U.S. Virgin Islands – "Please buy something and help me keep my job," Sylvia Brown kept repeating to potential shoppers as they trickled into the Coral World Ocean Park gift store in St. Thomas on a recent morning.   

The U.S. Virgin Islands' resident has been helping customers at the Coki Point Beach aquarium's souvenir store for more than 10 years. As the economy in the mainland worsens, she is seeing fewer shoppers.  

"We keep waiting for things to get better," she said as she folded pastel-colored T-shirts at the nearly empty store, "but we haven't had a real tourist season in two years." The store manager has cut everyone's work hours to avoid cutting staff.    

Image: Salmon Bay Beach
Courtesy of James Kizer 
Salomon Bay Beach on St. John, one of the U.S. Virgin Islands.

Brown is one of thousands of workers increasingly concerned about how the weak economy will affect their livelihood in this U.S. Territory surrounded by white, fine sand and turquoise water. 

Cutting back, offering deals
Tourism is the main source of revenue for St. Thomas, St. John and St. Croix. More than 70 percent of the islands' gross domestic product is dependent on visitors.

The Department of Tourism is forecasting a 30 percent drop in business for the first quarter of 2009. There was already an 8 percent reduction in cruise ship passengers last year and the number of air passengers slipped by 2 percent.

The slowdown has already led managers at one of St. John's most well-known resorts, "Caneel Bay," to plan a two-month shutdown of the 270-acre luxury retreat this fall.

"It's typically the low season and they're just taking this time to make repairs, make internal improvements," said spokeswoman Kristin Hutton. The secluded resort, which caters to high-end travelers, will close in September and October.  Before that, managers hope discounting daily rates by more than a $100 a night and offering free breakfast will bring visitors this summer. 

One of the resort's 450 workers said she's worked at Caneel Bay for 20 years and has never seen so much concern among the staff. "February is usually high season for us, but not this year," she said, while asking for her name not to be used because of the sensitivity of the issue.  Hotel occupancy is down between 10 and 35 percent this winter in all three islands.

Image: Caneel Bay resort sign
Erika Angulo/ NBC News
Sign outside of the Caneel Bay resort. 

Not spending
At the "Pink Papaya" gift shop in the traditionally busy Cruz Bay neighborhood of St. John, the problem is not just fewer visitors. John Dickinson, the owner of the pink and yellow gingerbread-trimmed store, says people come in to look, but are reluctant to spend.    

"This season is slow getting going and it's about 20 percent or more behind last year, which wasn't particularly great," said Dickinson whose store sells jewelry and crafts made by local artists. Most store managers in Cruz Bay say sales started to slow down more than a year ago.

Tourists spent $52 million less in 2007 than the previous year, according to the most recent statistics from the U.S. Virgin Islands' Economic Research Bureau.  Dickinson is cutting back on orders for merchandise and offering "economic stimulus" prices on many items to weather the downturn.

Taxi drivers are especially affected by the shortage of tourists. One St. Thomas taxi driver who goes by the nickname "Mr. Nice Guy" says he's driving around 30 percent less customers than he did a year ago. 

Transportation expenses add up quickly for Virgin Islands' visitors. A couple going on a day trip from St. Thomas to St. John will have to pay at least $20 for the round-trip taxi ride between their hotel and the ferry terminal, then an additional $24 for the round-trip fare for two on the ferry to St. John, just three miles away. Plus, they have to  count on spending more money on transportation within St. John. 

In addition, many hotels on the islands are not near any public transportation. At $5-per-person each way for the minimum taxi fare in St. Thomas, some families are staying put at their resorts rather than exploring the island. 

Image: Ferry from St. John to St. Thomas at sunset
Erika Angulo/ NBC News
Ferry from St. John to St. Thomas at sunset. 

Hoping ads a lure

Department of Tourism officials say they hope their advertising campaign will lure visitors to the islands' sparkling blue waters. A $1.5-million effort to sell the U.S. Virgin islands as the ideal winter escape is under way.  It includes print and web advertisements, plus incentives for travel agents who arrange group trips to the islands. 

Tourism officials also are running ads in Europe, especially in Denmark, hoping to appeal to the island's Danish ties. Denmark ruled the islands and their slave-powered sugar cane plantations during the 17th and 18th centuries. They abolished the slave trade in 1802.  Except for a few years of British occupation, Denmark owned the islands until it sold all three to the U.S. for $25 million in 1917.