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FALL 2021 REVENUE ESTIMATING CONFERENCE AUGUST 10, 2021 OFFICE OF THE GOVERNOR BUREAU OF ECONOMIC RESEARCH Director Allison L. DeGazon, Ph.D. REAL GDP GROWTH RATE FROM 2011 - 2020(F) Source: BEA Compiled by: BER 1 2011 -8.2 2012 -14.8 2013 -6.3 2014 -1.8 2015 -0.4 2016 1.6 2017 -0.7 2018 1.6 2019 2.2 2020 (F) -14.2 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (F) Percent U.S. VIRGIN ISLANDS VISITOR ARRIVALS Air Arrivals The USVI Visitors who arrive to the USVI by Airline Cruise Arrivals The USVI Visitors who arrive to the USVI by Cruise Ship Total Visitors Total Visitors who arrive to the USVI by both Airline and Cruise Ship 2 AIR ARRIVALS BY DISTRICT FISCAL YEARS 2015- 2021 JUNE YTD FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 JUNE YTD Air-STT-STJ District 632,016 644,562 630,179 258,288 470,519 149,068 268,590 Air-STX District 143,155 150,373 154,377 140,929 167,357 38,682 64,065 Total Territory-Wide 775,171 794,935 784,556 399,217 637,876 187,750 332,655 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 Source: VIPA Compiled by: BER 3 CRUISE ARRIVALS BY DISTRICT FISCAL YEARS 2015- 2021 JUNE YTD FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 JUNE YTD Cruise-STT-STJ District 1,729,919 1,783,577 1,783,577 1,129,843 1,416,099 424,583 0 Cruise-STX District 160,256 138,362 138,362 56,345 64,833 17,444 0 Total Territory-Wide 1,890,175 1,921,939 1,921,939 1,186,188 1,480,932 442,027 0 -500,000 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 Source: VIPA and DOT Compiled by: BER 4 TOTAL VISITOR ARRIVALS FISCAL YEARS 2015-2021 JUNE YTD FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 JUNE YTD Air 775,171 794,935 784,556 399,217 637,876 187,750 332,655 Cruise 1,890,175 1,921,939 1,921,939 1,186,188 1,480,932 442,027 0 Total 2,665,346 2,716,874 2,706,495 1,585,405 2,118,808 629,777 332,655 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 Source: VIPA and DOT Compiled by: BER 5 Source: VIPA Compiled by: BER 6 MAJOR CARRIER DIRECT FLIGHTS FISCAL YEARS 2019- 2021 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 2021 27,286 36,397 52,366 47,424 53,064 79,287 75,305 86,209 97,962 2020 34,384 47,583 68,389 70,013 69,809 40,749 2,031 6,287 18,885 40,895 27,185 10,951 2019 35,482 47,152 61,415 60,511 56,447 67,102 60,223 55,418 64,667 64,127 53,006 29,156 - 20,000 40,000 60,000 80,000 100,000 120,000 HOTEL GUEST REGISTRATIONS FISCAL YEARS 2015- 2021 JUN YTD FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 JUN YTD Guest Registrations 881,257 846,813 772,222 211,901 318,883 168,626 371,817 FY 2015 881,257 FY 2016 846,813 FY 2017 772,222 FY 2018 211,901 FY 2019 318,883 FY 2020 168,626 FY 2021 JUN YTD 371,817 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000 Source: VIPA and DOT Compiled by: BER 7 COVID-19 IMPACT: TOURISM ARRIVALS Since the USVI’s last lock down due to COVID-19, visitor arrivals have increased 77% in June 2021 YTD when compared to 2020. 8 Source: IRB COVID-19 IMPACT: TOURISM EXPENDITURES • 2020 Annual Tourism Expenditures average • $685.8 million • Air: $558.8 million • Cruise: $127 million • For the fiscal year June 2021 YTD Hotel Room Revenues are up approximately 75% percent. 9 BUILDING PERMITS BY VALUE($) FISCAL YEARS 2015- 2021 MAY YTD FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 MAY YTD Total Building Permit Value $166,646 $153,152 $146,841 $184,404 $345,667 $234,777 $225,037 Private Residential Value $87,640 $34,006 $32,503 $110,905 $221,257 $162,883 $83,977 Private Non-Residential Permit Value $63,743 $95,860 $76,262 $38,697 $29,021 $37,419 $39,417 Public Building Permit Value $15,263 $23,286 $38,076 $34,802 $95,389 $50,965 $101,707 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 Source: DPNR Compiled by: BER 11 (millions) REAL ESTATE ($)VALUE CALENDAR YEARS 2015- 2020 Source: Kurt Komives, Hamilton Real Estate and Re/Max St. Croix Compiled by: BER 12 USVI CONSUMER PRICE INDEX 2018-2021 MAY YTD 2018 6.4% 2019 3.8% 2020 7.0% 2021 May YTD 5.1% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 2018 2019 2020 2021 May YTD Source: BER Compiled by: BER 13 ECONOMIC REBOUND Recent data signal that the U.S. Virgin Islands’ economy is beginning to rebound as lock- down measures ease, more businesses reopening and hiring workers, travel and tourism on the upside, and federal-stimulus payments flow through the economy powering consumer spending. RESILIENCY This recovery is reflected in employment, business activity, and visitor arrivals which generally are improving since late 2020. Looking forward, higher economic growth is anticipated in 2022, with medium-term growth rates gradually back to averages of about 2% annually. OUTLOOK However, the new wave of COVID-19 infections presents near-term downside risks, although large-scale business shutdowns similar to 2020 are not expected. USVI ECONOMIC OUTLOOK 2020-2021 14 15 Any Questions? Thank you Office of the Governor BUREAU OF ECONOMIC RESEARCH 16