Commercial boating operations and fuel use in the U.S. Virgin Islands a study to determine the need for fuel terminal facilities and the economic impact of the overall boating industry on the economy of the Islands

[From the U.S. Government Printing Office, www.gpo.gov]

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MMERCIAL BOATING OPERATIONS AND FUEL
USE IN THE U.S. VIRGIN ISLANDS

A Study to Determine the Need For
0_1 Fuel Terminal Facilities And The
Economic Impact of the Overall
Boating Industry on The
Economy of The Islands

COASTAL ZONE
INFORMATIOV CENTER

Prepared by

Raymond Williams and Associates
For The Federal Programs Office,
Office of the Governor? U.S. Virgin Islands

This study was funded in part through financial assistance
provided by the Coastal Zone Management Act of 1972, admin-
istered by the Office of Coastal Zone Management, National
Oceanic and Atpospheric Administration, U.S. Department of
Commerce, Washington, D.C. Award Number NA-82-AA-D-CZ025

Table of Contents Page

Part I - Introduction 1

Part II - Purpose and Objective of Study 9

Part III - Funding For The Study 9

Part IV - Methodology Used in the Study 10

Part V - The Charter Boat and Fishing Industry in
the U.S. Virgin Islands 15

- Crewed and Bareboat Charters 16
- Fleet Charter Operations 17
- Sport Fishing Charters 17
- Full-time Commercial Fishermen 18
- Part-time Fishermen 20

Part VI - Fuel Use by Boating Industry in the U.S.
Virgin Islands 20

Part VII - Operating Characteristics of Boats in the
Sample, by Type of Activity 24

- Individual Charter Boats 24
- Fleet Charter Boats 32
- Sport Fishing Charters 34
- Commercial and Part-time Fishing Operations 36

Part VIII - Economic Impact of the Boating Industry
on the Virgin Islands Economy 38

Part IX - Charter YachtLeague Data 51

Part X - Considerations For the Need and Location
of Fuel Terminals 54

Part XI - Footnotes to Text 58
Bibliography 59

Part XII - Appendix: Survey Forms

I - Charter Boats 60
II - Sport Fishing Boats 61
III - Commercial and Part-time Fishermen 62

List of Tables
Page

Table 1 - Ethnic Makeup of the Population of the
U.S. Virgin Islands 8

Table 2 - Characteristics of Boats in the Sample
by Boat Activity 10

Table 3 - Specific Dock Locations of Boats in Sample 13

Table 4 - Number of Boats Harbored at Different Dock
Locations, by Boat Activity 14

Table 5 - Fuel and Electricity Consumption in the
Virgin Islands 21

Table 6 - Annual Fuel Consumption, By Boat Activity 25

Table 7 - Gallons of Diesel Fuel Used by Boat Activity
and Dock Location (Annually) 26

Table 8 - Gallons of Gasoline Fuel Used by Boat
Activity and Dock Location (Annually) 27

Table 9 - Annual Fuel Costs, by Boat Activity 28

Table 10 - Operating Characteristics of Individual
Charter Boats 33

Table 11 - Characteristics of Fleet Charter Operations 35

Table. 12 - Operating Characteristics of Sport
Fishing Boats 37

Table 13 - operating Characteristics of Commercial
Fishing Boats 39

Table 14 - operating Characteristics of Part-time
Fishing Boats 40

Table 15 - Methods of Fishing, Commercial and Part-time
Fishing Boats 41

Table 16 - Methods of Marketing, Types and Sizes of
Engines and Years of Experience,
Commercial Fishermen 42

Table 17 - Boat Size, Number of Charters and Fishing
Trips, Number of Guests, Operating Costs
and Fish Harvest by Dock Location
(Annual Basis) 43

Table 18 - Average Annual Revenues and Costs per Boat
and Fleet Operations, by Boat Activity 45

Page

Table 19 - Total Annual operating Costs, by Boat
Activity 48

Table 20 - Gross and Net Revenue, by Boat Activity 50

Table 21 - U.S. Virgin Islands CharterYa.cht League
Estimates 52

Table 22 - Summary of Selected Costs of Recreational
Boats 53

List of Figures

Figure 1 - List of Fuel Dispensing Stations.. U.S.
Virgin Islands 23

Figure 2 - Map of St. Thomas, Showing Fuel
Dispensing Stations 29

Figure 3 - Map of St. Croix, Showing Fuel
Dispensing Station 30

Figure 4 Map of St. John, Showing Fuel
Dispensing Station 31

ACKNOWLEDGEMENT&

Many people contributed to the field work and the prepara-

tion of this study. Mr. G. A. Chiaruttini, now an employee of

the S.B.A. had the primary responsibility for conducting the

119 interviews that represented the owners or operators of the

294 boats in the study. His work was performed in a profes-

sional and timely manner. He was assisted by Mr. Ernest Quetel,

Mr. Theodore Skov and Mr. Anthony Chairomitaro. Messrs. Paul

Drinkwine, Charles Peet and John Fawcett, former Directors of

the Charter Yacht League were extremely helpful and provided

valuable data. Dr. David Olsen made many suggestions, provided

staff time, equipment and assisted in the preparation of the

Survey Questionnaires. Our thanks to Lt. Gov. Julio Brady, Mrs.

Ursula McBean who assisted us in the preparation of the project

proposal and identifying the areas of concern that the study

should address.

Others contributing to the study were Mr. Thomas Bradley

of the National Park Service, U.S. Dept. of the Interior,

Mr. Mark Crandall of the Coastal Zone Management Program, USVI,

Mr. Stephen Blossf President of Leeward Island Corporation,
Mr. Thomas Bennett, Director of the St. Thomas-St. lohn Chamber

of Commerce, Mr. Joseph Sutton, USVI Department of Conservation

and Cultural Affairs, Mr. George Golden, Director, Coastal Zone

Management, Fish and Wildlife, St. Croix, Mr. David Benjamin,

Acting Director, Fish and Wildlife, St. Croix, Mr. John Ynteme,

Researcher, Mr. Toby Tobias, Marine Biologist, Mr. Eduardo

De Lerme, Port Sampler, Mr. Richard Johnson, Insurance

Executive, Mr. William Hillstead, Port sampler, and Mr. &

Mrs. William Stout.

PART I -- INTRODUCTION

Boating operations in the United States Virgin Islands

is big business, consumes large amounts of fuel and makes a

significant economic impact. The development of the charter

boat, sport fishing and other types of recreational boating

follows the escalation of the tourist industry after World

War II but with greater intensity beginning in the mid-1960's.

The full-time and part-time commercial fishing industry has

always been a viable part of the Virgin Islands' heritage and

food sources. Although the local catch of fish and lobster
probably accounts for less than thirty percent 1 of the sea-

food consumed on the islands it has a greater significance

because residents and tourists want fresh seafood.

It would be difficult to conduct an accurate census of

all boats in the Virgin Islands due to the transient nature

of the boating industry. The number of part-time and full-

time fishermen can be estimated with greater accuracy than a

census of the charter, sport fishing and recreational,boat

operators. Fishermen, various government agency representatives

and other informed people estimate that there are approximately

600 part-time and full-time fishermen on the three islands

with the number on St. Thomas and St. Croix about evenly

divided with approximately 275 each and the remainder on

St. John.

-2-

The growth of the entire boating industry and the demand

for fuel correlates with the population growth. For example,

in the early 1930's there were approximately 22,000 people

residing on the three Islands. The boating industry at that

time was principally for full-time and part-time commercial

fishing. Thirty-three percent of the Islands' labor force

was involved in agriculture and commercial fishing. Today
it is less than one percent.2

The Bureau of Fish and Wildlife, Virgin Islands Depart-

ment of Conservation and Cultural Affairs has the responsibil-

ity for boa t registration. Their statistics show that there

were 2765 boats of all types registered on the three islands

as of December 31, 1979 and 2901 on December 31, 1982. Data

for 1982 reveals that there were 2189 boats operating out of
St. Thomas and St. John and 712 operating from St. Croix. 3

All of the fuel and gasoline consumed by the boating industry

and for the entire Virgin Islands economy is imported.

The Hess Oil Virgin Islands Corporation on St. Croix was

created in 1969 and began operations soon afterwards. It is

the world's third largest oil refinery. However, all the

crude oil for refining is imported from foreign countries.

After refining virtually all of the product is shipped to the

U.S. mainland. Although some refined product is sold in the

Virgin Islands. Thus virtually all of the fuel needs of the

islands are imported from the U.S. mainland, Puerto Rico and

elsewhere. A similar comparison can be made with food imports@

-3-

that amounts to ninety eight percent of consumption. The

Virgin Islands has an open economy in which there is a large

inflow and outflow of goods, services and money. According

to Mr. Edward Miller's report, The E*conomy of the Virgin

Islands, it is a "small economy that consumes a large quantity

of imported goods and pays for them through tourism, export
earnings and transfers from the federal government." 4

Charter boating, Sport and Commercial Fishing and numerous

recreational uses of other types of boating attracts thousands

of tourists each year. The increase of tourism creates a

larger marketing demand for recreational boating and more

consumption of fuel.

Those interviewed in the study were candid and responsive.

This included both the fishermen and the members of the

recreational boating community. For the most part the inter-

viewer received a friendly and open reception. Rarely was

there encountered any hostility from people interviewed. We

identified ourselves as a contractor for the Virgin Islands

Government, rather than a government employee. We gained

their confidence in the first few minutes of the interview.

Both the fishing and the boating communities lead inde-

pendent and unstructured lifestyles. Consequently they tend

to resist surveys, regulations and restrictions. There appears

to be a strong underlying mistrust and resentment toward the

U.S. and V.I. Government and its bureaucracy in particular.

-4-

In the boating community we feel that the figures collect-

ed for revenues, number of charters and passengers-carried-per-

year were understated. However, data on charter provisions

and volume of fuel consumed during the course of a year appear

to be very accurate.

When it came to estimating their fish catch, the fisher-

men interviewed had a tendency to skew the numbers. The full

time serious fishermen who went out every day for their main

livelihood leaned more on the conservative side in their

estimations. The part-timers, on the other hand, tended to

overstate their catch. Part of the reason for this variation

might be attributable to the lack of adequate record keeping

or their desire to share their records with the interviewer.

Another possible explanation for this difference was the

distrust felt by the fishermen in how the information might

be used by a Virgin Islands or a federal agency. The hesitancy

to be candid applied somewhat to the charter boat community as

well.

The boating community enjoys a unique position in the

V.I. The smaller, individual charter operators run their

operations in St. Thomas out of either Red Hook, American

Yacht harbor or the old Sheraton Hotel Marina. There are not

many term (week) charters out of St. Croix. Individual charter

operators live on board their boats and have adopted an inde-

pendent, if economically marginal life style. The large fleet

operations are often managed by retired continentals that are

experienced sailors.

of the two types of charter operations, the large fleets

account for more revenue generated per boat than the individ-

ually owned charters. The net effect, as the data indicate,

is a large flow of dollars per year into the V.I. economy.

This comes in the form of direct revenue paid by sailing

guests, marine supplies, provisions for the charters and

virtually all ancillary retail goods and services that derive

from the boating industry. Despite this positive economic

influence, both the large and individual charter operators

almost universally voiced strong dissatisfaction with their

relationship with the local government. In several cases

boat owners or operators considered to being interviewed

with the hope that their opinions on this subject were included

in the study.

The members of the sailing community have a very low

threshold for federal and Virgin Islands governmental res-

trictiods. In the case of fishermen, there seemed to be an

underlying resentment toward the governments. There appeared

to be very little evidence of positive interaction between

the boating community and the local inhabitants, or the local

government.

Numerous charter operators felt that the treatment they

received from the different regulatory agencies, and the

government in general, made the U.S.V.I. a less attractive

place to base their operations. As an example, they cited

the proposed mooring fees which are supposed to be charged

to any boats anchored within a certain distance of a harbor.

British Tortola in the B.V.1. was often mentioned as an

attractive alternative to St. Thomas.

In conducting the field survey the issue of what is going

to happen to the V.I. economy was mentioned.frequently. Their

concern is the lack of diversification in the industry of the

Virgin Islands and its ability to absorb the currently un-

employed, not to mention the flow of graduates coming out of

the island school system. This becomes evident when examining

the boating industry as a potential employment source. Rela-

tively few native islanders are employed in the charter boat

operations. Yet, as the data show, there is a lot of revenue

injected into the local economy from that sector.

As the data indicate, there are relatively few fishermen

in the U.S.V.I. This group regularly told how the catch was

growing smaller with each passing year. Despite this claim,

it was evident that as more people became underemployed or

unemployed, they turned to fishing to supplement their income

and food supply. The cost of fresh fish at the retail markets

on the islands was high, even when buying fish at the docks.

The only explanation is that the demand far exceeds the supply

of available seafood. It therefore, seems that the fishing

industry, such as it is, will not be a likely place to absorb

those who cannot find work elsewhere.

-7-

The general belief in the decline of the fish catch is

supported in interviews with the deep sea sport fishing

operators. Over the past five yea .rs, there has been a general

decline in the number of people coming from the U.S. mainland

for sport fishing in the V.I. Part of this decline, they

maintain, is attributable to the high operational costs which

has forced them to raise their daily rates which in July 1982

were as high as $475 per day. The other reason, in the words

of one of the charter fishing captains, is the decline in

fish caught.

The general well being of the boating community is directly

related to the mainland economy. As that market gets tighter,

there is a squeeze on the term-charter operations. Fishermen

will continue to fish, regardless of the state of the local

economy. However, with the apparent decline in yearly catch

and the increase of competition among those going out to sea

on.a regular basis, this will mean more pressure on an already

limited occupation.

The ethnic makeup of the Islands' population reflects a

continuous change and has a major effect on the V.I. boating

industry. Four studies conducted between 1970 and 1978 give

estimates of the percent of the nativeborn population, West

Indian, Puerto Rican, U.S. continentals and "others", that are

primarily Europeans. A summary of the studies is shown in

Table 1. Column 1 reflects the study findings of the United

Nations Committee on Small Territories as documented in

-8-

A/AC.109/L.1234. Column 2 reflects data compiled by the U.S.

V.I. Department of Education's-Resource Guide .to'the' Culture

of the U.S. Virgin 'Islands, 1973-1974. The third column

reflects data prepared by the U.S.V.I. planning office in 1977

and the fourth column represents the U.S.V.I.Is policy council's

estimate of the ethnic distribution of the island population

in 1978.

Table 1

Ethnic Make-up of the Population
of the U.S. Virgin Islands

Ethnic Group 1 2 3 4 Average
------- percentages -------

Native Born 40 26 47 42 39
West Indians 24 31 28 31 29
Puerto Ricans 15 12 06 08 10
Continentals 12 08 13 16 12
Others 09 23 05 03 10

Source: Compiled in the study., Socio-Economic Survey of
Recreational Boating and Fishing in the U.S. Virgin
Islands. David A. Olsen and Associates, St. Thomas,
U.S.V.I., May 1979.

The vast majority of crewed and bareboat charters in the

U.S.V.I. are sail boats. However, of the total of all recrea-

tional boats that includes charters, sixty nine percent are

power boats and thirty one percent are sail, based on a sample

of 183 boats. Significantly,the sample showed that of those

that responded to the sample 51.9 percent were U.S. mainland

born, 12.8 percent were Virgin Islanders by birth, 12.5

percent Puerto Rican, and the remaining 22.8 percent were

British Virgin Islanders, Eastern Caribbean and European.

Conversely, a very small percentage of the full-time and

-9-

and part-time fishermen are-U.S. Mainland born citizens. The

native born, Puerto Rican, and Eastern Caribbean born make up
the overwhelming majority of fishermen.5

PART II -- PURPOSE AND OBJECTIVE.OF STUDY

The purpose of the study is to determine the requirements

and possible need for a fuel terminal to service the boating

industry in the Virgin Islands. The boating industry is an

important segment of the local economy and encompasses a wide

variety of activities all of which require fuel storage facil-

ities. A part of the study is directed toward the needs

assessment of the various boating sectors of the Islands'

economy. The data contained in the study can be used to deter-

mine the optimum size of a fuel terminal and therefore, limit

the potential environment impact of any fuel terminal project.

This study, Phase I of a two-phase project, is directed toward

the collection and analysis of data. Phase II, to be conducted

at a future date will build on the results and conclusions

reached in Phase I. Phase I is being conducted as a part of

a comprehensive analysis of the boating industry in the Virgin

Islands.

PART III -- FUNDING FOR THE STUDY

The funds to conduct the fuel terminal study have been

provided to the Federal Programs Office, office of the Governor

by the Coastal Energy Impact Program, National Oceanic and

Atmospheric Administration of the United States Department of

Commerce.

10-

PART IV -- METHODOLOGY USED IN THE STUDY

The field work for the study was conducted during the

summer and fall of 1982. Survey forms were completed during

personal interviews with owners or operators of boats. There

were no mail or telephone surveys. The selected sample of

boating operations was made on the basis of personally locating

and interviewing as many boat owners or operators as possible.

In many instances a number of visits were required before an

interview could be conducted because of the uncertainty of

departure and arrival times. Some boats leave the dock or

anchorage area at different hours of the day while others may

be at sea for a week or more at a time. One NLindred-Nineteen

(119) survey questionnaires were completed that represent 294

boats. There were 111-individual boating operations and 8

fleet operations. The fleet operations represented 183 boats.

The sample by boat activity is shown in Table 2.

TABLE 2

CHARACTERISTICS OF BOATS IN THE
SAMPLE BY BOAT ACTIVITY

NUMBER AVERAGE NUMBER OF
BOAT ACTIVITY OF BOATS BOAT LENGTH CREW MEMBERS
FEET
Sport fishing 12 42 10
Commercial fishermen 19 22 26
Part-time Fishermen 52 18 43
Individual charters 28 53 45
Fleet operationsi
Bare boats 157 26 32
Crewed boats 26 53 104
Total fleet .1.83 .30 .1-36

Total all activities 294 344
Average 30
Not. applicable
1Data based on 8 fleet operations.

The 294 boats represent a very significant part of the

total boating industry. The charter boats in the fleet

operations and sport fishing are larger in size and participate

in viable economic charter businesses. Likewise, the 19 boats

in the commercial fishing fleet sample are full time fishermen

that make their living from fishing and harvest a substantial

portion of the fish harvest. The part-time fishermen surveyed

are those that fish most often and harvest significant quanti-

ties of fish.

The crew members for the fishermen, sport fishermen and

individual charters are in addition to the owner-operator of

the boats. The number of crew members for the fleet operations

represent the total crew.

The interviewers - statisticians conducted the interviews

by visiting the major marinas, public.and private boat ramps.

Many boat operators anchor off shore, and use marinas for

ingress and egress. In those instances interviews were con-

ducted on shore while the owners or operators were purchasing

fuel or supplies or while their boats were being repaired.

Seventy-eight of the surveyquestionnaires were for boats

harbored on St. Thomas that were individually owned or

operated and 41 on St. Croix. The eight fleet operations

are harbored on St. Thomas. An insignificant number of boats

are harbored on St. John. Most boats using St. John waters

are harbored on St. Thomas, mostly on the east end of the

Island. The vast majority of all boats using St. Croix waters

-12-

are harbored at Christian sted and Fredericksted. The number

of boats included in the study harbored at specific deck

locations by boat activity are shown in table 3. In view of

the numerous boat locations on St. Thomas and the small size

of the Islands it would be very difficult to analyze the data.

Therefore, we have congregated the dock locations in table 4

to identify the locations as East End, Charlotte Amalie, and

the Northside on St. Thomas. The four locations on St. Croix

are identified as "St. Croix" in all tables except in table 3

where the number of boats on St. Croix are specifically

identified by the dock location.

In addition to interviewing boat owners and operators,

representatives of public and private organizations and

numerous other interviews were conducted. Also representatives

of various Virgin Islands agencies that have responsibilities

related to the marina and boating industry were interviewed.

They include the:

1. Virgin Islands Department of Conservation and

Cultural Affairs

2. Virgin Islands Department of Commerce

3. Virgin Islands Energy Office

4. Virgin Islands Coa stal Zone Management Commission

5. [email protected] Department of Public Works

6. Virgin Islands Port Authority

7. Governor'.s Office

Table 3

Specific Dock Locations of Boats in Sample by Boat Activity

Fleet Charters Total
Sport Commercial Part-time Individual No. of No. of Number of
Boat Location Fishing Fisherman Fishermen Charters Fleets Boats Boats

---No. of boats or fleets St. Thomas---

Yacht Haven 23 1 36 59
Am. Yacht Haven 2 2
Red Hook 3 1 3 70 74
Lagoon 1 20 20
Antilles 1 1 6 7
Compass Pt. 1 1 26 27
Frenchtown 4 8 1 25 37
Hull Bay 2 5 7
Nadir 2 2
Coast Guard Dock 3 3
Sub Base I I
Pineapple Beach 5 5 W
Magens Bay 3 3
Coki Beach 2 2
Secret Harbor 1
Fish Hawk 2 2
Sapphire 1 1

--- No. of boats or fleets St. Croix---

Fredericksted 1 9 10
Gallows Bay 1 1 2
Grove Bay 1 - I
Christiansted 4 -9 13 2 -28
Total 12 19 52 28 8-1/ 183 294

Note: Boats in the sample operating in St. John waters are based on St. Thomas, mostly the east
end of the island.

The eight fleets comprise the 183 boats shown in column 6.

Table 4

NUMBER OF BOATS HARBORED AT DIFFERENT DOCK LOCATIONS
BY BOAT ACTIVITY
Boat Activity East En Y Charlotte 2/ xi/
d Amalie - Northside2/ St. Croi Total
Boat Operations
Sport Fishing 9 0 0 3 12
Commercial Fishermen 1 4 2 13 20

Part-time Fishermen 8 13 8 23 52

Individual Charters 3 23 0 2 28
Fleet Operationsi/ 6 2 0 0 8

Total 27 42 10 41 120

!/Dock locations in East End of St. Thomas include Fish Hawk Marina, P.D. Marina,
American Yacht Harbor, Compass Point, Antilles Boat Yard, Sapphire Bay, Secret Harbor,
Nadir, Pineapple Beach, Coki Beach, Red Hook, and Lagoon.
@VDock locations within Charlotte Amalie include Frenchtown, Long Bay, Coast Guard
Dock, Yacht Haven and the Sub Base.
2/Dock locations in Northside of St. Thomas include Hull Bay and magens Bay.
I/Dock locations within St. Croix include Christiansted and Frederiksted.
@VBoat operations of fleet owners comprise 158 boats in the East End and 25 boats
in Charlotte Amalie.

-15-

PART.V -- THE CHARTER BOAT AND.FI.SHING INDUSTRY
IN THE U.S. VIRGIN ISLANDS

The 1960's was a period of great expansion in the Virgin

Islands. This growth in almost all economic and social areas

resulted from several different causes: changes in laws

governing the territory; the deterioration and elimination of

U.S. trade and relations with Cuba; the dramatic expansion of

tourism in the Islands; and, the migration of thousands to the

Islands from other less developed Caribbean islands interested

in participating in the increased opportunities created by

the growing tourism trade. Population grew at a yearly average

rate of 8.9% during the 1960's, to a total of 75,151 in 1970.

Approximately 64% of the 41,726 person population increase was

due to migration. By the 1970's, the percentage of non-native

Islanders (63.5%) exceeded that of native born Islanders

(36.5%). Population density thickened greatly in the 1960's

as a result of this growth. As a whole, it increased from

243 people per square mile in 1960 to 569 people per square

mile by the end of the decade. By the 1970's,, St. Thomas

had become the second most densely populated Caribbean island

after Barbados, growing from 506 people per square mile in

1960 to 1,165 people per square mile in 1970. St. Croix also

doubled its population density from 187 people per square mile

in 1960 to 449 people per square mile in 1970. The boating

industry grew at a rate comparable to the overall growth of

the islands.

-16-

Crewed and Bareboat Charters

The charter sailboat industry in the U.S. Virgin Islands

is divided between crewed boats and bareboats. Crewed char-

ters are sailboats rented for usually a week at a time and

manned by a skipper and often a mate who serves as a cook.

Bareboat charters are rented without crews. Usually these

are leased to groups of four to six experienced sailors who

prefer to sail rather than have someone do the sailing for

them. Bareboat charters are rented for a week at a time as

well, and are referred to as "term Charters" to differentiate

them from day charters.

Fees charged for bare and crewed charters vary within each

group but usually rentals for crewed are higher than bareboat

charters. In addition to the crews, these charters are usually

provisioned by the owners renting the boat prior to a trip.

Foodstores can range from simple fare, to luxurious,.gourmet

meals complete with vintage wines and Champagne. Of course,

charter fees reflect these features.

Many of the crewed boats are privately owned, with the

owners doing the sailing during the charter. They might be

a husband and wife team seeking a way of life based on vocation

or business reasons, a retired older couple who are experienced

seamen, or just a young man and a companion who have chosen a

more adventurous lifestyle.

Individually-owned charter boat owners are willing to

work on a smaller profit margin and they may pay more attention

-17-

to the service they provide than thebookkeeping part of the

business. There were exceptions to this, however.

Cruising areas on a term charter for both crewed and

bareboat charters can extend from the area immediately in the

vicinity of the three U.S. Virgin Islands to the British V.I.

and farther down the Antilles, south of the V.I.

Fleet Operations and Charter Operations

Fleet operations are more adapted to bareboat charter

operations although they do supply crews for a limited number

of charters. The fleet operators (brokers) provide the

management, advertising, maintenance and repairs and all the

other necessary services associated with the charter industry.

Fleet operations are managed a great extent by continentals

with adequate capital for a successful business. Such com-

panies are often formed under one business logo, However,

the boats are individually owned and leased to the fleet'

operators.

Sport Fishing Charters

At the time of the survey, there were approximately 40

fully-equipped, sportfishing boats operating regularly in the

U.S.V.I. Most of those operate from St. Thomas and out of

the American Yacht Harbor at Red Hook.

According to many of the captains of these boats, there

has been a general decline in the number of mainla nd deep sea

fishermen coming to the V.I. This, they say, is attributable

-18-

in part to the increased costs in.airfare to get to the V.I.

and the general increase in daily fees.charged for a charter,

costing up to $475 per day. Also, there is supposedly a

decline in the number of trophy-sized fish that can be caught

close in to the three-island area. To catch the same sized

fish of ten years ago, the sportfishing boat must go out much

farther into the ocean. Consequently, this increases the

operating expenses and the daily charter fee. Like chartered

sailing skippers, sport fishermen are engaged more in a life-

style than a business.

Full Time Commercial Fishermen

Commercial fishing has historically been a viable part of

the food supply and economic support of many families in the

U.S. Virgin Islands. Estimat es vary on the number of full

time fishermen on the three islands, but it appears there are

less than 200. In a study conducted by the United States

Department of Agriculture in 1975 it was reported that the

Virgin Islands Bureau of Labor Statistics listed 100 full

time commercial fishermen on St. Croix. These numbers are

substantially less than estimates made by other individuals

and V.I. agencies. These estimates show that there may be as

many as 1000 fishermen. There are approximately the same

number on St. Thomas. Very few fishermen operate out of

St. John. Of the estimated five million pounds of fish

consumed locally about twenty-five to thirty percent is

_19-

harvested locally. The remainder is imported primarily from

the U.S. mainland. Fishermen with small boats make one-day

or one-night trips fishing on the "shelf" that is very narrow

around the islands.

The water surrounding the islands is considered "sterile"

by marine biologists, compared with the Gulf Stream off Florida,

Georgia, South Carolina, and North Carolina Coasts. The

relatively "sterile" quality of the water and the unusual

depths require different fishing techniques than those used

on the U.S. Continental shelf. On the other hand, the high

quality of the fish and the typos of fish caught bring excep-

tional prices to the fishermen in comparison with U.S. main-

land prices. The fish are caught on power reels, in traps,

and on lines. Some of the major types of fish caught are

kingfish, dolphin, tuna, barracuda, snapperl grouper, jack,

parrot fish, trigger and.'grunt.

Full time fishermen are able to fish only an average of

three days per week throughout the year due to weather con-

ditions, time required to sell the catch, and time required

for maintenance and repairs to boats and equipment. Most

boats are open and range in length from 14 feet to 25-feet.

Most are less than 20 feet in length. When a catch is brought

in, the fishermen immediately sets out to sell the fish,

either at the dock, on the street corner, to restaurants, to

hotels or to fish markets. Since fish is not iced, sales

must take place immediately upon landing to prevent spoilage

in the warm climate.

-20-

Part-time Fishermen

Part-time fishermen follow the same fishing schedules and

use the same methods for fishing as the full-time fishermen.

They usually fish on Saturdays and Sundays and at night to

supplement relatively low wages from daytime jobs. Accurate

statistics on the number of part-time fishermen are not avail-

able. Estimates vary between 500 and 1,000 on the three

islands. A recent publication by the Virgin Islands planning

office estimated that there are 700.

PART VI -- FUEL USE BY THE BOATING INDUSTRY
IN THE VIRGIN ISLANDS

The Virgin Islands is a good example of an area in which

severe limitations of energy production, inefficient energy

management and use, and inadequate potable water resources

provide serious constraints on development. Possibilities

for development are limited even further because these resource

difficulties are associated with problems which include in-

adequate territorial planning capacities, an insufficient and

deteriorating infrastructure, a less than generous degree of

federal assistance, and an undiversified economy that is

reliant upon tourism as its major private sector industry,

an industry that offers low wages, low weekly hours, and low

security employment. All of these problems are interrelated

in fundamental ways. They make the Virgin Islands very

vulnerable in the face of world resource problems created by

fluctuations in resource price and availability. Given these

-21-

conditions, investment sources (private and publ ic) are more

likely to be-driven away than attracted. Certainly the U.S.

Virgin Islands cannot be considered to possess community
7
entrepreneurship as defined by economist Albert Shapero.

Total fuel and electricity consumption has shown a constant

growth in the past ten years except for the slight decline in

oil use in 1976, 1978 and 1980. See table 5.

Table 5

Fuel and Electricity Consumption in The
U.S. Virgin Islands,.1974-1981
Year Fuel Oili/ Electricity 2/
1974 1,102 NA
1975 1,114 397.7
1976 1,076 397.7
1977 1,112 413.4
1978 1,095 426.0
1979 1,274 445.7
1980 1,273 448.7
July 1980-Feb. 1981 1,847 443.9

YIn thousands of barrels
2/ in thousands of KWH

Sourc e: Virgin Islands Growth Statistics,.1981,
Office of Policy, Planning and Research,
U.S.V.I. Department of Commerce and
Water & Power Plan, April, 1981, p. 12.

The cost of fuel is one of the major expenses of oper ating

a boat. Fuel costs are more expensive in the Virgin Islands

than.on the United States mainland. Fuel costs at the time

the field work for this study averaged $1.60 per gallon for

gasoline and $1.67 per gallon for diesel. These costs are

between thirty-five and fifty percent higher than mainland

prices.

22-

Fuel is distributed through marinas and local gasoline

stations. Sport fishing, bareboats and crewed charter boats

purchase fuel at the marinas where they dock. In a few

instances, the larger charter may have fuel delivered by a

local distributor to dockside. For the full-time and part-

time fishermen fuel purchase and delivery is made in many

ways. Fuel may be purchased at boat ramps, marinas or at

stations in,their neighborhood and hauled by car or pickup

truck to the boat location. Some fishermen haul their boats

by trailer and store them at home after each fishing trip.

This gives the fishermen the flexibility of purchasing at the

marina, boat ramps in the local neighborhood or at locations

between the fishermen's residence and the location where the

boat is launched. Although there are numerous gasoline service

stations located throughout the islands catering to the motoring

public, there are relatively few marine stations to serve the

boating industry. The locations on St. Thomas are the Shore-

line marina, Leeward Island Transport, Yacht Haven Marina,

Vi pleasure Boats Marina, Vida Marina and the American Yacth

Charter Marina. There is one marine station on St. John at

Caneel Bay (National Park Service) and one on St. Croix at the

St. Croix Marina. The specific locations of marina fuel

stations are identified below and shown on the maps of St.

Thomas, St. Croix and St. John, pages 29, 30 and 31..

Diesel fuel is the major fuel used by the charter indus-

try and gasoline by the fishing industry. The bareboat and

-23-

crewed charters use fuel as supplemental to sailing. Nearly

all of the charters are sail boats.

Figure 1, Fuel Dispensing Stations, USVI

St. Thomas

1. Shoreline Marina
2. Leeward Island Transport
3. Yacht Haven Marina
4. Vi pleasure Boats
5. Vida Marina
6. American Yacht Charters

St. Croix

St. Croix Marina

St. John
Caneel Bay

Source: Virgin Islands Department of
Conservation and Cultural
Affairs, 1983.

Overall, boats use about two times as much diesel as

gasoline. The exception is true with the commercial fishermen

and the part-time fishermen. The boats used by commercial and

part-time fishermen are small, open boats and generally powered

by outboard motors. On the other hand, sport fishing boats

are heavy consumers of fuel. For example, the 12 sport fishing

boats in the sample consumed approximately as much fuel as the

183 boats in the charter fleet operations. The sport fishing

boats are under power during most of the time they are at sea

while the charter boats are under sail except for leaving and

entering harbors and during poor wind conditions. All of the

52 boats in the part-time fishermen sample used gasoline. Of

-24-

the 377,345 gallons of fuel consumed by the 294 boats in the

total sample, sixty percent was diesel and forty percent

gasoline. on the other hand, research conducted by Lr. David
Olsen'and associates in 1979 on all types of recreational

boating shows that approximately two thirds of the boats use
gasoline and one third diesel.8 Charter boats are larger and

make efficient use of diesel.

The cost of diesel and gasoline per gallon is essentially

the same. The average price of diesel was $1.67 per gallon

and regular leaded gasoline is $1.60. The annual use and cost

of fuel by boat activity and location is shown in Tables 6, 7,

8. and 9.

Fuel service stations are congregated at marinas where

boat s aredocked or anchored. Service stations selling

gasoline and diesel to automobile and truck customers are

congregated along the principal roads. The accompanying maps

of the three islands show the locations of marine and non-

marine fuel service stations.

PART VII - OPERATING CHARACTERISTICS OF THE BOATS
IN THE STUDY SAMPLE BY TYPE OF ACTIVITY

Individual Charter Boats

Table 10 shows the operating characteristics of individual

charter boats.

Individual charter boats are crewed and most often by the

owner or owners of the boat and one or more crew members. The

charters are term in nature and the cruises generally last for

-25-

Table 6

Annual Fuel Consumption, By Boat Activity

Annual
Charters Gasoline Diesel Fuel Total
Boat Activity or trips Usage Usage Fuel Usage

Number Gallons

Sporting Fishing 1,532 6,240 101,970 108,210

Commercial Fishermen 3,536 40,264 18,000 58,264

Part-time Fishermen 5,124 50,045 -0- 50,045

Individual Charter
Boats 1,126 51517 43,506 49,023

Fleet Operations 4,444 21,092 90,711 111,803

Total 15,762 12 3,158 254,187 377,345

Table 7

GALLONS OF DIESEL FUEL USED BY DOCK LOCATION
AND BOAT ACTIVITY (ANNUALLY)

CHARLOTTE
BOAT ACTIVITY EAST END AMALIE NORTHSIDE ST. CROIX TOTAL

Sport Fishing 88,992 13,728 0 0 102,720

Individual Charter 2,400 35,400 0 5,928 43,728

Fleet Charters 62,016 29,400 0 0 91,416

Commercial Fishing 4,590 9,128 0 4,499 18,217

Part-time Fishing 0 0 0 0 0

TOTAL 157,998 87,656 0 10,427 256,081Y

l/ Does not total to 254,187 shown in Table 6 due to fractional gallon usage per
trip and rounding.

Table 8

GALLONS OF GASOLINE FUEL USED BY DOCK
LOCATION AND BOAT ACTIVITY (ANNUALLY)

CHARLOTTE
BOAT ACTIVITY EAST END AMALIE NORTHSIDE ST. CROIX TOTAL

Sport Fishing 6,180 0 0 0 6,180

Individual Charter 600 4,800 0 0 5,400

Fleet Charters 16,320 3,528 0 0 19,848

Commercial Fishing 0 2,034 5,447 32,716 40,197

Part-time Fishing, 6,432 11,880 6,815 26,268 51,395

r-o
TOTAL 29,532 22,242 12,262 58,984 123,0201-1

1/Does not total to 123,158 shown in Table 6 due to fractional gallon usage per
trip and rounding.

-28-

Table 9

ANNUAL FUEL COSTS, BY BOAT ACTIVITY

GASOLINE DIESEL TOTAL
BOAT ACTIVITY .. .... COSTS. I/ FUEL COST &11 'FUEL COSTS

DOLLARS

Sport Fishing 9,984 170,290 180,274

Commercial Fishermen 64,422 30,060 94,482

Part-time Fishermen 80,072 0 80,072

Individual Charters 8,927 72,655 81,482

Fleet Operations 3.3,747 151,487 185,234

TOTAL 197,052 424,492 621,544

!/Based on $1.60 per gallon average.
?/Based on $1.67 per gallon average.

FIGURE -ST THOMAS SURVEY AREAS

West End
Notthside

challette I mail$

(3) Now Quarter

East End

(6)
frenchmm's Bay (5)

Legend:
1. Shoreline Marina
2. Leeward Island Transport
3. Yacht Haven Marina
4. Vi Pleasure Boats
5. Vida Marina
6. knerican Yacht Charters

FIGURE 3 -STCROIX SURVEY AREAS

Northside 1)0
Cential
Christiansted
East End
Grove Place

Southside

C)
Frederiksted

Legend:

1 St. Croix Marina

FIGURE 4 ST JOHN SURVEY AREAS

Coral Bay Outlying Areas

Cruz Bay

Legend:

1. Caneel Bay

-32-

about a week except for St. Croix where most charters are day

charters. The 28 individual charter boats in the'sample made

an average of 94 trips per month. The fifty charters per

month out of Charlotte Amalie reflects the heavy concentration

of tourists in the immediate area of hotels and shops. The

greater use of diesel fuel for boats operating out of Charlotte

Amalie is necessitated by the distance from the harbor to the

open seas. Also, the extra costs for labor, supplies, main-

tenance, and provisions reflect the larger size of the boats

operating from Charlotte Amalie. Conversely, the shorter trips

of the boats operating out of St. Croix require less costs in

all major categories than Charlotte Amalie boats but similar

to those operating from the East End of St. Thomas. Note that

the boats operating from St. Croix are not provisioned.

Fleet Charter Boats

Fleet operations cater to bareboat charters. of the 183

boats in the sample, 157 were operated as bareboats and 26 were

crewed. The bareboats are smaller, averaging 25 feet in length

while the larger crewed boats averaged 53 feet. The number of

guests, however, were the same for each type of charter. The

average labor cost of $389 per crewed charter adds substantially

to the total cost of operations. Boats in the sample operated

an average of 370 charters per month for a yearly total of 4440.

-33-

Table 10

OPERATING CHARACTERISTICS OF INDIVIDUAL CHARTER BOATS

OPERATING EAST CHARLOTTE ST. TOTAL OR
CHARACTERISTICS END. AMALIE CROIX AVERAGE

Total charters per month 25 50 19 94

Average number of guests
per charter 7 9 13 9

Average gallons of diesel
used per charter 8 59 26 39

Average gallons of
gasoline used per
charter 2 8 9 5

Average labor costs
per charter (dollars) 64 567 107 340

Average costs of supplies
provisions per charter
(dollars) 114 454 0 272

Average costs of main-
tenance and repairs
per charter (dollars) 82 630 82 374

Average cost of insurance
and fees per charter 36 132 46 89

-34-

The numbers thereforel translate into approximately 16 weeks of

operation per year for each boat with most of the*activity

occurring in the winter months. The number of charters per

year for each crewed and for each bareboat were about the same.

The average number of weeks charters operate per year and the

number of guests per charter in the study coincides with the

estimates made in a report made to the Virgin Islands Depart-

ment of Commerce by Mr. Clyde Carder in July 1980.

In that report Mr. Carder indicated that crewed charters

operated 17 weeks per year and bareboat operations ranged

between 15 and 32 weeks per year. It was not stated in the

report, but presumably few boats operated for as much as 32

weeks. Fleet charters operate to a large degree out of the

Eastern part of St. Thomas where three-fourths of the charters

originate and the remaining one-fourthoriginate from Charlotte

Amalie, the central area of the island. We did not include any

of the relatively few fleet charters operating out of St. Croix

and St. John. Detailed characteristics of fleet charter

operations are shown in Table 11.

Sport Fishing Operations

Sport fishing operations included in the study operated

from the east end of St. Thoinas and mainly from Christiansted

on St. Croix. Data was collected from 9 boats on St. Thomas

and 3 on St. Croix. The 12 boats averaged 129 charters per

month, 153 2 for the year. Fuel usage is greater per charter

for boats operating out of the East end of St. Thomas due to

the distance to the deep water and the fishing areas. Except

-35-

Table. 11

CHARACTERISTICS.OF FLEET CHARTER OPERATIONS

EAST CHARLOTTE -TOTAL OR
ITEM ...... END AMALIE AVERAGE

Total charters per month 272 98 370

Number of bareboat
charters per month 228 91 319

Number of crewed charters
per month 44 7 51

Average number of guests
per charter 5 5 5

Average number of guests
per crewed charter 5 4 5

Average number of guests
per bareboat charter 5 5 5

Average gallons of diesel
used per charter 19 25 20

Average gallons of gas
used per charter 5 3 5

Average labor costs
per crewed charter 379 424 389

Average provision costs
per charter 462 275 412

Average maintenance
costs per charter 59 465 166

Average insurance costs
per charter 19 94 38

-36-

for insurance and labor, all. costs are more for the St. Thomas

operations. The operating characteristics of sport fishing

boats are given in Table.12.

Commercial and Part-time Fi'shing Operations

Fishing has always been an important way of life in the

Virgin Islands for fishermen. Due to the size of the boats

fishermen make short trips. Weather has a major effect on

fishing due to the trade winds that increase velocity by mid-

afternoon on most days. Fish are harvested throughout the

year with the volume well distributed month by month. A

fisherman makes approximately 3.5 trips per week that takes

about six hours. The typical catch is 114 pounds per trip

for commercial fishermen and 66 pounds per part-time fisher-

man.

The volume of fish caught is limited in volume but of

excellent quality. Fish is sold immediately upon return to

shore. Sales are made at the dock, on the street, wholesale

or at restaurants. More than 20 types of fish are caught but

the most important in the order of volume are grouper, o16

wife, hind, and yellow tail.

Most fish are caught in traps that are set with bait on

the bottom of the ocean. Some fishermen use nets to harvest

fish that migrate to the off-shore waters during certain times

of the year. A limited volume of spiney lobster is harvested.

-37-

Table 12

OPERATING CHARACTERISTICS. OF SPORT FISHING BOATS

OPERATING TOTAL OR
CHARACTERISTICS ....... EAST END ST. CROIX AVERAGE

Total Charters per month 103 26 129

Average charge per charter
(dollars) 442 323 418

Total monthly revenue 45,519 8,398 53,917

Average gallons of diesel
used per charter 72 44 67

Average gallons of gas
used per charter 5 0 4

Average cost of supplies
and provisions per
charter (dollars) 75 31 66

Average cost of maintenance
and repairs per charter
(dollars) 29 6 25

Average cost of insurance
and fees per charter
(dollars) 18 38 22

Average cost of labor per
charter (dollars) 46 91 56

-38-

The boat crews average two people. Tables,13, 14, 15, and

16 outline the operating characteristics, methods of fishing.,

marketing methods, types of engines and the experience of

fishermen in the U.S. Virgin Islands.

PART VIII -- ECONOMIC IMPACT OF THE BOATING INDUSTRY
ON THE VIRGIN ISLANDS ECONOMY

The 233 boats in the sample, excluding the commercial and

part-time fishermen, provided recreational services to 33,131

guests for the immediate twelve months prior to the date the

survey was made. These guests injected $14,397,501 into the

economy, an average of $432 per guest. The 72 commercial and
part-time' fishermen harvested 752,028 pounds of fish at a

value of $1,880,070. These two sources of revenue totaled

$16,277,571, a major input into a small island economy.

Tables 17, 18, 19 and 20 show boat size, number of trips,

guests, the sources of income, fish harvest and expenses by
boat activity and dock location. The sample, no doubt, shows

a reasonable distribution of income taken by the boating

industry at various locations and specific boat activity when

compared to the total universe of boats on the three islands.

The 344 crew members earned $2,699,750 for an average of

$7,848 per crew member. It is significant that the majority

of the income, except for the fishermen, is earned in a short

period of about 15 to 20 weeks each year. It cannot be deter-

mined what part of the total labor income is spent in the

islands. It is known, however, that all other operating costs

totalling $4,628,132, was spent locally.

Table 13

OPERATING CHARACTERISTICS OF COMMERCIAL FISHING BOATS

OPERATING EAST CHARLOTTE ST. TOTAL OR
CHARACTERISTICS END AMALIE NORTHSIDE CROIX AVERAGE

Total trips per month 17 61 35 182 295

Average pounds of fish
caught per trip 125 219 167 95 114

Average gallons of diesel
used per trip 22.5 12.47 0 2.06 5.09

Average gallons of gas
used per charter trip 0 2.78 12.97 14.98 11.39

Average cost of supplies
and provisions per
trip (dollars) 6 41 16 15 20

Average cost of main-
tenance and repairs
per trip (dollars) 7.81 9.28 3.54 8.15 7.81

Average cost of insurance
and fees per trip
(dollars) 0 2.31 0 0 0.48

Average cost of labor
per trip (dollars) 108 120 105 81 93

Table 14

OPERATING CHARACTERISTICS OF PART-TIME FISHING BOATS

OPERATING EAST CHARLOTTE* ST. TOTAL OR
CHARACTERISTICS END AMALIE NORTHSIDE CROIX AVERAGE

Total charter trips
per month 67 90 71 199 427

Average pounds of
fish caught per
trip 45 58 .95 67 66

Average gallons of
gasoline used
per trip 8 11 8 11 10

Average cost of
supplies and
provisions per
trip (dollars) 12 31 15 34 22

Average cost of
maintenance and
repairs per
trip (dollars) 4 10 4 24 11

Average cost of
labor per trip
(dollars) 28 85 13 19 34

U)
r1t,
En
g(D 0
'(:D'j

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Lo.) Ln t1i ul 0
Lo C) 11.) 0 0

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z
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C) 00 L71
txj
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F-J
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0 NJ C> t.0 Z F-
t:j Ln

L o 4@:. F-i Ln N) -3
N.) t1i IQ 0 Ln
t2i
P.

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Ul tQ LI) tZ @D-
00 VZ N) 4@. G)

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In
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(D

Table 16

METHODS OF MARKETING, TYPES AND SIZES OF ENGINES
AND YEARS OF EXPERIENCE, COMMERCIAL FISHERMEN

Method of Marketing Engine Type Average Years
Dock Location Dockside Street %I-iblesale Fp@stautants Outboard Inboard Horsepower Experience

Percent .Percent

East End 0 50 0 50 0 100 145 15

Charlotte Amalie 33 33 0 33 50 50 112 11

Northside 0 100 0 0 100 0 22 9

St. Croix 0 92 8 0 77 23 104 12

Average 69 2 21 55 43 96 12

Table 17
BOAT SIZE, NUMBER OF CHARTERS AND FISHING TRIPS, NUMBER OF GUESTS,
OPERATING COSTS AND FISH HARVEST BY DOCK LOCATION
(ANNUAL BASIS)
Diesel Total rfbtal Total Total Total rfbtal
Boat Annual Total Gasoline Fuel Labor Labor Provision Maintenance insurance Fish
Dock Location Length Charters Guests Usage Usaqe Costs Costs Costs costs Costs Catch
Feet Nunber Nunber Gallons Gallons Gallons Dollars Dollars Dollars Dollars Pounds
East End 30 5,802 18,420 29,598 156,704 186.302 1,502,046 1,631,927 257,829 95,064 60,524
Charlotte Amlie 40 3,582 11,280 22,283 73,328 95,611 837,464 651,292 919,561 188,872 207,948
Northside 16 1,272 0 12,293 0 12,293 65,176 18,500 4,895 0 141,080
St. Croix 22 5,106 3,431 58,984 24,155 83,139 295,064 120,624 95,680 22,344 342,476
Total -- 15,762 33,131 123,158 2540,187 377,345 2,699,750 2,422,343 1,277,965 306,280 752,028
Average 30 -- -- -- --

Not applicable

44-

Table 18 reflects data on a per boat basis for all opera-

tions except the 8 fleets. The eight fleets are comprised of

183 boats and therefore, the data should be analyzed as if

there were 183 boating operations. The 8 fleet operations

consist of 26 crewed boats and 157 bareboats. The two types

of operations are averaged together. The guest charges of

$1,474,.866 (gross revenue) provides an annual revenue of

$80,594 per boat. Total annual operating costs for the 183

boats average $31,784, leaving $48,810 from which the fleet

operator subtracts management fees and any other costs incurred.

The gross revenues per boat for the sport fishing and

individual charters are substantially less than the fleet

operations. The fleet operations no doubt can advertise more

widely because of the collective resources of the average fleet

size of 23 boats versus just one boat. Also., the operators

operate strictly as a sophisticated business operation striving

to obtain the maximum return to their clients.

The fish marketings (gross revenue) and operating costs

for commercial and part-time fishermen are income and expenses

that must be assigned to the boat as an operation. The net

revenue must be shared by the operator and the boat *crew based

on some pre-arranged agreement. The average crew size in-

cluding the boat owner for the commercial fishermen was 2.3

whereas, the part-time fishermen operate with an average crew

of 1.8. Therefore, when the $.24,076 average net revenue per

commercial fishing boat is shared by 2.3 crewmen the result is

Table 18

AVERAGE REVENUES AND COSTS PER BOAT AND FLEET
OPERATION, BY BOAT ACTIVITY
(ANNUAL)

Average
Average Average Average Average Average Average Average Total Average
BOAT Guest Fish labor Provision maintenance Insurance Fuel Operating Net
ACTIVITY Charges Marketings Costs costs Costs costs Costs Costs Revenue

- - - - - - - - - - - - - - - - - - - Dollars - - - - - - - - - - - - - - - - - - -

Sport Fishing 53926 -- 7100 8456 3142 2830 15023 36551 17375

Cmmrcial
Fishermn -- 50302 16520 3515 -1381 85 4724 26226 24076

Part-time
Fishermen -- 16808 3308 2139 1065 0 1540 8052 8756
Ln
Individual
Charters 69695 -- 13693 10946 15046 3579 2910 46175 23521
Fleet Operations-Y 1474866 -- 216094 229103 91994 21300 23154 581646 893220

Not applicable
I/Eight fleet operations that conprise 183 boats.

-46-

a low yearly income. The income.for the part-time fishermen

is -substantially less than the-commercial fishermen.

Charter operations use all dock locations except the

Northside of St. Thomas where only fishing operations are

conducted accounting for zero guest charges in table 18.

There are no dock facilities on the Northside from which

charter operations could operate. On.the other hand! fisher-

men operate out of all dock locations. Table 17 reflects

the popularity of the use of the East End of St. Thomas for

all charters. The East End accounts for approximately 55

percent of all of the guests using charters in the sample.

Altogether, 170 boats in the sample operate out of the East

End., One hundred-fifty-eight of the East End boats comprise

six fleet operations. Labor costs for crew members on boats

harbored on the East End accounts for 55 percent of all labor

costs of boats in the sample and 67 percent of the cost of

provisions. The high rate of expenditure for provisions

reflect the large number of boats harbored and the length of

time the charters are at sea where nearly all of the charters

are term charters (weekly).

Table 19 summarizes operating costs by boat activity.

The 183 boat s in the fleet operations represent 62 percent

of the 294 boats in the sample. The eight fleets employ 64

percent of the labort and purchase 75 percent of the supplies

and provisions. Their share of costs related to maintenance

and repairs, 58 percent, insurance, 56 percent and fuel, 30

_47-

percent, is less than their proportionate share in comparison

to other boating activities. Fuel. use is particularly low

because most of the energy required is provided by sail.

Total operating costs for fleets amounted to 64 percent for

all boating activities.

The twelve sport fishing boats in the sample were heavy

users of diesel fuel in comparison to gasoline. Of the total

fuel cost, $180,274, more than 94 percent was for diesel. In

contrast less than 20 percent of the fuel consumed by commer-

cial and part-time fishermen was diesel. All types of boating

activity are under insured. For example, not any of the 52

part-time fishermen indicated that they carried insurance.

The commercial fishermen as a group (19 boats) paid only

$1700 per year in insurance premiums and fees. A substantial

percentage of the individual charter operations did not carry

insurance. The average annual premium of $3579 per boat is

skewed by large premiums on a relatively few boats. The

$170,400 annual insurance premium and fees paid by the owners

of the 183 boats in the eight fleets reflect an annual premium

of $937. This figure does not include any insurance that

might have been paid by the fleet broker-operators. Sport

fishing boats paid an average of $2930 in annual insurance

premiums and fees.

The boating industry is a major asset to the U.S. Virgin

Islands. The.gross revenue from the 294 boats in the sample

of $16,277,571 makes an undeniable impact on the local economy,

Table 19

TOTAL ANNUAL OPERATING COSTSI BY BOAT ACTIVITY

SUPPLIES MAINTENANCE INSURANCE TOTAL
AND AND AND OPERATING
BOAT ACTIVITY LABOR PROVISIONS REPAIRS FEES FUEL COSTS I/

DOLLARS

Sport Fishing 85,200 101,478 37,700 33,956 180,274 438,608

Commercial
Fishermen 33b,400 70,310 27,628 1,700 94,482 524,520

Part-time
Fishermen 172,000 111,242 55,385 0 80,072 418,699

Individual
Charter Boats 383,400 306,485 421,299 100,224 81,482 1,292,890 J,
co
Fleet Operations 1,728,750 1,832,828 735,953 170,400 185,234 4,653,165 1

Total 2,699,750 2,422,343 .1,277,965 306,280 621,544 7,327,882

I/Excludes interest expense and depreciation.

-49-

an annual gross revenue of $55,178 per boat and an average net

revenue of $30,338.per boat Gross and net revenue, by boat

activity is shown in Table 20.

The commercial and part-time fishing operations included

in the sample, although very important supplier of seafood to

island residents, earn only 11.6 percent of the gross revenues

of the boating industry and 10.5 percent of the net revenue.

As stated earlier, fishing boats are small open boats that

are far less expensive to purchase and to operate in comparison

to the sport fishing, individual charter and fleet charter

operations. The individual charters have the largest per-

centage spread between gross and net revenues. For example,

their gross revenues as a group consists of 13.6 percent of

the gross revenues of the 294 boats in the sample but they

realize only 7.4 percent of the net revenues. In comparison

the fleet operations, that make up 62 percent of the number

of boats in the sample earned 82.0 percent of the gross

revenues and 79.8 percent of the net revenues. One advantage

of the fleet operations over the individual charters can be

attributed to labor costs. The individual charters are all

crewed boats whereas the fleet charters are predominantly

bare charters (without crew).

Sport fishing operation received 4.4 percent share of

gross revenues and 2.3 percent of net revenues. Again, labor

costs are a factor because most boats have a crew member. In

addition, sport charters are heavy consumers of diesel fuel

because of the types of boats and the nature of sport fishing.

Table 2 0

GROSS AND NET REVENUE, BY BOAT ACTIVITY

Source of Gross Revenue
Percent Percent Total
Guest of Gross Fish of Gross Gross Operating Net
Boat Activity Charges Revenue Marketings Revenue Revenue Percent Costs Percent Revenue Percent

Dollars

Sport Fishing 647,107 4.4 -- -- 647,107 4.0 438,608 6.0 208,499 2.3

Cbnmercial
Fishing -- 11,006,050 54.0 1,006,050 6.2 524,520 7.2 481,530 5.4

Part-time
Fishermen -- -- 874,020 46.0 874,020 5.4 418,699 5.7 455,321 5.1

Individual
Charter Boats 1, 951,467 13.6 -- -- 1,951,467 12.0 1,292,890 17.6 658,577 7.4
Un
CD
Fleet Operations 11,798,927 82.0 11,798,927 72.4 4,653,165 63.5 7,145,762 79.8

Total 14,397,501 100.0 1,880,070 100.0 16,277,571 100.0 7,327,882 100.0 8,949,689 100.0

Not applicable

-51-

Sailors and fishermen visiting the U.S. Virgin Islands

usually spend two or three nights ashore at hotels before

departing and after their return from charters. They also

purchase gifts and eat a number of meals at local restaurants

and hotels. We have not included such expenditures in the

calculations of the total economic impact of the boating

industry to the islands, estimated to be several million

dollars each year. Nor have we included expenditures for

medical and other professional services that visitors use.

PART IX -- VIRGIN ISLANDS CHARTER YACHT LEAGUE

The Virgin Islands CharterYacht League is an organization

that represent the interests of the Charter Yacht owners con-

ducting business in the Virgin Islands. It is a viable

organization and has a membership of approximately 250.

Th e Charter YachtLeague gave us their estimates of the

number of members, number of guests per charter, number of

weeks per year boats are chartered and the overall economic

impact of their membership on the economy of the Virgin

Islands. The estimates are shown in Table 21.

Data in table 21 is shown so that the Charter Yacht

League estimates can be compared where applicable with the

actual survey data obtained in this study. For example

table 19 shows an annual operating cost of $7,327,882 for

294 boats in the sample-used in this study compared to

$11,830,400 for 425 boats in the Charter YachtLeague esti-

mates.

52-

Table 21

USVI CHARTER BOAT LEAGUE ESTIMATES OF NUMBER
OF CHARTERS, GUESTS AND EXPENDITURES PER YEAR

1. Number of Crewed Charter 250
Number Charters per year per boat 20
Number guests per charter 5
Total guests yearly 25,000
Average expenditure per guest
for food and drinks $100
Total expenditures per year $2,500,000

2. Number of bareboat charter members 175
Number of charters per boat per year 15
Average number of guests per charter 4.8
Total guests yearly 12,600
Average expenditure per guest
for food and drinks .$100
Total expenditures per year $1,260,000

3. Taxi Fares (37,600 passengers x 4 trips
x $4.00) $ 601,600

4. Lodging costs $ 564,000

5. Cost of meals on shore (37,800 passengers
x $12.00) $1,304,800

6. Marine support costs @ 12,000 per year per
boat (includes haul-ups, marine charges,
equipment and fuel purchase, etc.) $5,10.0,000

Total economic benefit to USVI $11,830,400

Source: USVI Charter Yacht League estimates 1982.

Note: Above expenditures do not include estimates to charter
owner, local gross receipt or Federal taxes.

-53-

We did not include the cost of.lodging and food on shore

or the purchase of gifts to take home. We did, however,

include the costs guests paid charter boat owners for the

charters. There are duplications in the numbers of boats

since most of the boats in this study are also members of

the Charter Yacht League.

Dr. David Olsen and associates found that the average

recreational boater spent fifty one dollars each day of boat

use in addition to monthly slip rentals of sixty nine dollars

and monthly diving fees of thirty dollars. These costs are

out of pocket costs and do not include repairs, maintenance,

insurance, crew costs and other costs. Table 22 shows their

estimates when the sample of 183 boats is expanded to a fleet

of 2,000 recreational boats.

Table 22

SUMMARY OF SELECTED COSTS OF A FLEET
OF 2,000 RECREATIONAL BOATS

Expenditure Daily Expense Annual Expenditures

Fuel $15.62 $1,548,000
Refreshments 11.38 1,377,000
Fishing Gear 10.76 1,012,000
Travel to boat 6.74 793,000
Ice 4.52 410,000
Bait 1.98 223,000

Total $51.00 $5,363,000

Source: David Olsen and associates,.1979. Socio-Economic
Survey of Recreational Boating and Fishing in the
U.S. Virgin Islands.

-54-

The data is based on a fleet of 2,000 boats that make an

average 7 trips per month, have an average of 3.6 guests for

a total of 604,800 guests in a year. The data is based on

all recreational use and reflects le ss cost per boat than for

the larger boats shown in the sample of charter boats in this

study.

PART X -- CONSIDERATIONS FOR THE NEED AND
LOCATION OF FUEL TERMINALS

The geographic area of the three U.S. Virgin Islands is

small, comprising approximately 300 square miles. The largest

Island, St. Croix,, is approximately 21 miles long and 6 miles

wide. St. Thomas is 13 miles by 3 miles. St. John is some-

what smaller than St. Thomas. The consumption of fuel by the

boating industry is by far the greatest on St. Thomas. The

fuel terminals for the boating industry are located at the

major marinas.

On St. Thomas the fuel terminals are located on the south

side of the island extending from the Western part of Charlotte

Amalie, to the West-Central part of the island, to Red Hook on

the East end. There are six marine fuel dispensing locations.

The maximum distance between any two stations and from the

northside to the nearest station is less than 4 miles except

for the few boats located on the extreme western end of the

island. The service stations serving the motoring public

generally track the marine locations except for the.area West

of the airport, Tu Tu, Nadair and the Northside near Hull Bay.

-55-

The marine station on St. John-is located at Caneel Bay on

the northwest side of the island. Most of the stations

serving the motoring public on St. John are located in Cruz

Bay on the western end of the island.

On St. Croix, according to the V.I. Department of

Conservation and Cultural Affairs, there is only one marine

fuel dispensing station. It is located in Christiansted on

the south-central part of the island. Non-marine dispensing

fuel stations are located throughout the island. There were

294 boats in the sample of which 211 were sailing charters,

12 sport fishing and 71 were full time and part-time.fishing

boats. All of the boats in the sample, however, use gasoline

or diesel fuel. Some use both. The twelve sport fishing

boats in the sample used 101,900 gallons of diesel per year

and only 6,240 gallons of gasoline. The total usage of

108,210 gallons represented 29 percent of the total annual

consumption. Nine of the 12 boats were harbored at one

location, the East End. See tables 6, 7 and 8.

The 8 fleet operations, all in the sample, all on St.

Thomas, used 111,803 gallons of fuel for the year, 90,711

gallons of diesel and 21,092 gallons of gasoline. Seventy

percent of the fuel was dispensed at one location, the East

End. There is a more uniform distribution of fuel sales to

full-time and part-time fishermen throughout St. Thomas and

St. Croix.

-56-

Dr. David A. Olsen in his study, Socio-Economic Survey of

Recreational Boating and'Fishing in the U.S. Virgin I*s1ands

1979, estimated that seventy percent of fuel sales for marine

purposes was purchase at marinas. He further estimated that

1.4 percent of the 168 million gallons of fuel consumed

annually in the U.S. Virgin Islands was by the recreational

boating industry. Therefore, 2,352,000 gallons of fuel sales

was attributable to the recreational boating industry. Data

on boat registrations, maintained by the U.S. Virgin Islands

Department of Conservation and Cultural Affairs, reveals an

increase from 1789 boats as of December 31, 1979 to 2901

(2189 on St. Thomas and St. John and 712 on St. Croix) on

December 31, 1983, an increase of about five percent. Assum-

ing that the fuel consumption rate per boat remained the same,

consumption would have increased to a yearly total of 2,469,600

gallons by the end of 1983.

The sample of 194 boats in this study are larger, are

used more frequently and for commercial purposes of chartering

and fishing. This is demonstrated by the amount of fuel used.

The 294 boats represent 10.1 percent of the boats registered

bqtconsume 15.2 of the fuel in the U.S. Virgin Islands.

In determining the need and possible locations of fuel

terminals to serve the boating industry serious consideration

must be given to the heavy concentration of the 2189 boats on

St. Thomas and St. John and particularly the concentration on

the eastern one third of the Island of St. Thomas. Some of

-57-

the boats operating out of the East End sail the surrounding

waters of St. John. On St. Croix, the concentration of boat

dockings is in the Christiansted area. Therefore, it may be

feasible to locate two terminals on St. Thomas, one at

Charlotte Amalie and the other on the East End and one on

St. Croix at Christiansted. If only one terminal should be

located on St. Thomas, the data in this study would support

a location somewhere in the Lagoon-Compass point area of

St. Thomas. The cost of fuel, $1.601per gallon for gasoline,

and $1.67 per gallon for diesel are deterrants to a more

viable boating industry in the U.S.V.I. The mark-up of fuel

from approximately $1.00 per gallon to the above prices

represents a margin far above that stateside. Fuel prices

have a drastic effect on the cost of operations of the full-

time and part-time fishermen. It is their greatest cost., The

pricing of fuel and the margins of profit are factors that need

attention. Also, the need for other marine supplies should be

considered in combination with fuel.

The above comments are suggestions only -- to be con-

sideted when phase two of the study is conducted, a study to

determine fuel terminal locations.

58-

FOOTNOTES TO TEXT

H. Kumpf 1978. Reef Fish Management. Caribbean Regional
Fisheries Management Council.
2Dr. Jerome McElroy, College of the U.S. Virgin Islands,
1978.

Virgin Islands Bureau of Fish and Wildlife, Department of
Conservation and Cultural Affairs.

4Richard W. Miller, The Economy of the Virgin Islands,
June 20, 1979.

5
David A. Olsen and Associates, Socio-Economic Survey of
Recreational Boating and Fishing in the U.S. Virgin Islands,
St. Thomas, USVI, May 1979.
6Economic Development Policy Guidelines, Volume 11, Back-
ground Narrative, prepared by the Economic Council, January
1979, pp. 57 and 124-125.
7Albert Shapero, "The Role of Entrepreneurship in Economic
Development at the Less-than National Level," in Robert Fried-
man and William Schweke, eds., Expanding the Opportunity to
Produce: Revitalizing the American Economy Through New Enter-
prise Development. (Wash., D.C.: The Corporation for New
Enterprise Development, 1981).
8Olsen and Associates, pg. 38.

_59-

Bibliography

Bray, Howard, and Doris Deakin. "Hawaii and the U.S..Terri-
tories: A Report to the Alaska Commission," Washington,
D.C. 1981.

Pages 115-148 include a general economic and social
assessment of the U.S. Virgin Islands.

Government of the U.S. Virgin Islands. Annual Economic Review:
1980, Department of Commerce, Office of Po'licy Planning
and Research, St. Thomas, U.S.V.I., 1981.

Contains social, economic and fiscal review of U.S.V.I.
economy. Particular emphasis on tourism.

Carder, Clyde D., "Survey of Charter Boating and Related
Businesses in the Virgin Islands Relative to their
Contribution to our Tourism Related Economy," Depart-
ment of Commercel St. Thomas, U.S.V.I., 1980.

Survey of charter boat business in U.S.V.-I. with estimated
total of boats and revenue generated.

Jackson, Ivor L., "Study of the Pleasure Boat Industry in the
British Virgin.Islands with Emphasis on Charter Boats,"
The World Tourism Organization, Caribbean Research
Institute, College of the Virgin Islands, U.S.V.I., 1980.

Examination of the boat Chartering industry in the British
V.I. Emphasis on environmental and ecological impact with
economic assessment of pleasure boats in the B.V.I.

McCrain, Jerry. "Status Report and Management Recommendation
for the Vessup/Muller/Red Hook Bay Complex Area of
Particular Concern (APC)," Division of Coastal Zone
Management, Department of Conservation and Cultural
Affairs, St. Thomas, U.S.V.I., 1981.

Olsen, David A., "Fishery Development Program for the U.S.
Virgin Islands," Department of Conservation and Cultural
Affairs, St. Thomas, U.S.V.I., 1979.

Olsen, David A. and Associates, "Socio-Economic Survey of
Recreational Boating and Fishing in the U.S. Virgin
Islands," Island Resources Foundation, St. Thomas,
U.S.V.I., 1979.

A stati.stical analysis of recreational boating in U.S.V.I.
Study conducted to provide data base for further analysis
and planning of recreational boating.

-60-
DATE
APPENDIX I
INTERVIEWER

Crewed Charters

Bare Boat Charters
Survey Information
Charterboat and Sport Fishing
U.S. Virgin Islands

lz Name of marina

2. Location of marina

3. Number of boats docked

4. Number of charters per year

5. Average number of customers per charter

1* Average gross revenue per charter

7. Number of boats registered by locations: St. Thomas

St. Croix @ St. John , U.S. Mainland

Other Virgin Islands All Other

8. Number of paid crew members per charter

9. Average labor cost per charter

10. Cost of supplies per year: Food and beverage

motors and equipment , repairs other

11. Volume of fuel purchased (gallons): Diesel gasoline

12. Estimated pounds of fish caught per charter

13* Estimated pounds of fish sold per charter

14. Type and percent of fish caught:

Type Percent

-61-

15. Where do you buy your fuel:

Diesel Gasoline

16. How many hours do you spend per week acquiring your fuel:

17. Do you think a centrally located fueling facility is needed: Yes No.

1 8. If such a facility were built, would you use it? Yes No.

If no, why

19. Do you carry insurance on your boat? Yes No.

If yes, what does it cost per year?

20. Do you purchase the insurance in the Virgin Islands? Yes No.

21. Comments:

-62-
APPENDIX II Date

Interviewer

Survey Information
Sport Fishitg Boats

1. Name of owner

2. Location where boat is docked

3. Length of boat

4. Type of fuel: Diesel Gasoline

5. Gallons of fuel used in 1981 Cost per gallon

6. Where do you purchase your fuel

7. Distance from where boat is docked

8. How much time do you spend per week purchasing fuel

9. What other major supplies did you purchase last year?

Type of Supplies Cost

10. Cost of full and liability insurance

11. Do you purchase your insurance in the Virgin Islands? Yes No

12. What registration fees or licenses do you purchase

Cost

13. Estimate of pounds of fish caught each year

14. What areas do you fish

15. Would you use a centrally located fuel storage facility? Yes No.

-63- DATE

INTERVIEWER

APPENDIX III

SURVEY INFORMATION
VIRGIN ISLANDS COMMERCIAL FISHERMAN
ST. THOMAS, VIRGIN ISLANDS

1. Name

Address

2. Location of boat

3. Length of boat type type of engine

horsepower crew size

4. How long have you been fishing

5. Method of fishing: Line bottom trap

6. Percent of fish caught by line bottom trap

7. Number of weeks per year you fish

8. Average number of trips per week

9. Number of hours per trip

10. Average catch per trip

11. Major types of fish you catch:

Type of Fish Percent of Catch

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12. How do you sell your fish: At dock street

fish market , local market other

13. How much time per trip does it take to sell your fish hrs.

14. How do you transport your fish to market

15. Do you ever set your traps especially for lobster: Yes No.

If no, why not

16. Major supplies purchased last year (1981):

Type of Supplies Unit Cost Total Cost

17. Where do you buy your fuel?

Diesel Gasoline

18. Volume of fuel purchased in 1981 (gallons):

Diesel Gasoline

19. How much time do you spend per week acquiring your fuel?

20. Do you think a centrally located fueling facility is desirable and a good

idea? Yes No

21. If such a facility were built, would you use it? Yes No.

If no, why ?

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I 22. What does your insurance cost per year?
I 23. Comments:
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