You're probably right.

There are still deal out there. You just have to look deeper and not to such secluded areas. By secluded areas, this means the VI. Prices have doubled from our area to VI, but have lowered to larger cities like San Diego, LAX, etc. It will hurt smaller markets for sure. Bought a ticket to Las Vegas for a convention in Oct. and it retailed for 145 r.t. but after all the extras, seats, baggage, "convenience fee"...who knows what that is...but in the end it added $95 onto the $145!!! It was a smaller airline also.

"Only the wealthy will be able to fly. Families and middle class folks are doomed. My guess - tourism down by 50% minimun. Real Estate values - down by 40% minimum within 2 years."

This sounds like hyperbole to me.

The middle class can still afford to fly but perhaps will do so less frequently. Tourism may change; instead of frequent short visits (4 day weekends from NYC) vacationers may make fewer but longer visits (10-14 days). There may be fewer purchases of luxury items like jewelry, but plenty of people can still afford to spend their winter vacation in the Caribbean. The middle class is relatively large and most don't perceive themselves as "doomed."

There is also quite a bit of active building of multi-million dollar homes on STT. People who own (without a mortgage) multiple multi-million dollar homes often weather the fluctuations within our economy pretty well.

dntw8up: I don't disagree with you entirely. However, it takes the USVI at least a year to feel the effects of a general mainland recession and this present US recession is the worst I've seen since I've lived under the US flag (40+ years now with 25 years of those here.) It's already filtering down here and, as much as I'm generally an incurable optimist, you only have to read forums such as these to see that the proverbial "middle class" is finding it very difficult to plan it's next vacation here because of the increasing air fares. Add to that what will have to be increased accommodation costs because of our continuously rising WAPA rates (hotels, restaurants, villas) and the OP isn't really far off target.

We have our own internal financial problems which, since they haven't been addressed for way too long, have escalated and these, combined with the mainland recession, can only complicate our tourism industry.

Yes, there are still multimillion dollar homes being built on the islands and yes, those with megabucks can weather the fluctuations. The average person can't. As a restaurant owner I see the wholesale food prices going up almost every week because of transportation costs. And my next WAPA bill is going to be 22% higher than last month because of that upcoming increase and there's no end in sight to those increases so my food costs will continue to rise and, and, and...

As much as I generally agree with you, I m almost compelled to disagree with you where this is concerned. And as much as it's truly against my basic nature to be a "gloom and doomer" I think the OP's predictions were pretty much en pointe.

But, hey,the bright side is that when real estate values go down there will be good buys available for those who can pay and wait - and I have a few friends who are biding their time to buy based on just that. Unfortunately I'm not in that position! Cheers!

People wanting to go on vacation will. I am still receiving reservations up to as far away as April next year. I have had only one semi cancellation because some airline canceled their flight and they are projecting not being able to get another, which I doubt.

Tough out there to get a good price on a flight. When we first went 2 years ago, it was 350. Then it went up to 450, then to 550 this May...now, it's hard to get anything from Philly under 650-760...That's a big jump.

Have to say that the new governor's department of tourism is doing a splendid job of promoting the USVI with special offers and promotions.

We got back Sunday morning from STT. It was magical. From the snorkeling at Coki Beach on Sunday to having Andrew play for us at the Blue Moon on Friday night. The airlines are going to be the killer here. American cancelled the flight, they moved us to Delta, flight delayed, sat on the tarmac in Atlanta for about 1/2 hour, no seats on the Atlanta-Philadelphia flight, etc, etc. We got home around 430 am, and we both said that even with all of the getting home stress, it did not take away anything from our vacation. STT is our favorite destination and we will be back!!
p.s. - We rented a car. I have to say, driving in STT is a hoot.

Just checked flights for 12/08 fron NY/NJ airports, $1,700.00 round trip - are they kidding me? Who can possibly afford that kind of money just for the flight? A family of four could never afford that, unless wealthy. I agree that STT is about a year or so behind the mainland regarding feeling a recession. However, that time has not arrived, compounded by fuel prices/ WAPA increases, etc. - not a pretty picture. Anyone who truly believes otherwise is just playing ostrich. Very few condos are selling because the sellers are trying to hold on to prices of one and two years ago. Only when there units sit on the market for a year or so will they get reasonable. I personally would not buy anything for at least a year or two, and even then tread cautiously.

Oceanman:

The fare on Continental from Newark to STT for 12/8 staying for 7 days (12/15) is $453. round trip.

Also, I don't see the higher airfares really hurting visitors too much when travelling to STT....besides, when all this panic is over the airlines will be running sales again.

F.I.

I just checked Spirit Airlines and the round trip price from Detroit to STT was only $304, traveling down on the 9th of July and returning on the sixteenth...I would think that would BOOST tourism!

Out of curiosity I checked AA from Boston for 12/8-15: $463 RT (taxes included).. First class was $1178

And I checked Spirit for the same dates as the Detroit trip and it, too was $304...

When checking airline prices, I've had the best luck flying Wednesday to Wednesday....

However.....Spirit is becoming a little strange.......Checked luggage (each way) is $15./bag if paid in advance or $30./bag if paid at the airport. Also, do you believe that they're charging to book a seat in advance? Window $10., Middle $5., Aisle $15. (each way)

So if you get the $304. price and pay ahead for your luggage & book an aisle seat....the price becomes $364. ($304 + $15 + 15 +15 + 15 remember it's a round trip).

Oops! Forgot to type in that I checked from NYC to STT with the same dates as the Detroit trip....but those extra costs sure suck! (IMHO)

Rates have gone up 60%-120% depending on your destination. A flight from Boston to STT is double the price compared to last March (which was $285/roundtrip). Also American (as well as the others) have severly cut the number of flights to STT (I heard 1 flight a week from New York starting in September). That coupled with the gas problem is going to lead to a horrible 2009 busy season. If you are a local be prepared for a drastic reduction this year because it's going to happen.

There has been just 1 sale of a house over a million dollars in the last 14 months (this is not including new homes built). The real estate market is getting pummled just like the states. We've had 2 units on either side of us for sale for well over a year and they ain't selling anytime soon.

Now as soon as demand goes down airlines will lossen up on their pricing. But because they also cut the flights it could be a long time coming.

It's all coming together like the perfect storm for a big time recession here. My advice is get as prepared as you can and hope for the best. Look at the food prices now. They've all gone up as well.

Stthomasblog:

All this doom & gloom?????.....my crystal ball is a little bit cloudy these days so I can't project what will happen next winter.

However, airlines generally cut back on their schedules to the Caribbean in the Fall. Continental goes from 7 non-stops (Newark/STT) to 1 non-stop in the Fall. I'm sure that the other airlines do the same due to decreased capacity.

As for airline fares increasing......remember.. the 2008 Winter season saw a lot of discounted fares......the fact that the discounts have been decreased (or eliminated) means you'll get higher fares......however, deals still exist....plus it is doubtful that many people will forgo their vacations because the airfare has gone up by $200.

Being somewhat familiar with real estate.....we do have cycles.......you're in a down cycle right now......sales will be made if your neighbors really want to sell (at decreased prices). Here in NJ the prices have decreased about 25% from 2006.....my neighbor listed his property at $429K six months ago....but accepted a $340K offer last week.....that's the current market.

Are we in a recession?....I've been saying that since last August.

Will prices go up?.....somehow it seems they always do........

F.I.

Or maybe he's a realist.

I've found over the years that things are never as good as we hope or as bad as we fear. As was said above, only time will tell.