US Virgin Islands Bets on More Cruise Tourism as Residents Call for Economic Diversification

Although tourism is the most important industry in the U.S. Virgin Islands, residents of St. John, St. Croix, St. Thomas and Water Island say there is an urgent need to diversify the economy and reduce its dependence on tourism, particularly cruise tourism.

Cruise passengers outnumber air travelers in the U.S. territory and use the same road infrastructure and basic services, residents told the Centro de Periodismo Investigativo (CPI). Yet cruise passengers make a smaller economic contribution to the territory than air travelers because they spend relatively less during their stay, according to data from the U.S. Virgin Islands government and the cruise industry.

According to the Bureau of Economic Research, visitors who arrived in the U.S. Virgin Islands by air generated a little more than $1.1 billion in spending in 2024, an amount equivalent to 24% of the territory’s estimated GDP for 2022, the latest year available. Those who arrived by cruise ship spent $722 million that same year, equivalent to 15% of GDP.

Residents are calling for tourism revenue to be used to rehabilitate roads, repair the power grid, address the lack of affordable housing and improve medical services. With each new cruise ship, crowds of tourists overwhelm the basic services residents rely on, an investigation by the CPI found.

The U.S. Virgin Islands government, however, prefers to direct taxpayer money primarily toward attracting even more cruise passengers. Last year, for example, it announced a $200 million project to revitalize one of its main cruise ports as part of a public-private partnership that also includes Royal Caribbean. The legislation that enabled the project reinforces the U.S. Virgin Islands “as one of the Caribbean’s leading cruise destinations,” Carlton Dowe, former executive director of the Virgin Islands Port Authority, said when the legislation was approved in November 2025.

Carlton Dowe, former executive director of the Virgin Islands Port Authority, who has been accused of mortgage fraud. |
Photo provided

“Tourism represents more than 70% of our economy, and the ports are the gateways to that economy. We have had massive expansion in our tourism markets, and that has been accompanied by investment in our ports,” U.S. Virgin Islands Gov. Albert Bryan Jr. said in written comments to the CPI.

Daniel Boyd, a St. John resident who has lived in the U.S. Virgin Islands for 37 years, believes the growth of the tourism industry has not kept pace with the availability of basic services. He said he recently spoke with a friend who moved to Texas after growing tired of power outages, traffic and potholes.

“You know, [he got tired] of nothing being done with the infrastructure, but they still kept taxing him every which way,” Boyd said.

The Cruz Bay waterfront features hotels and restaurants where cruise passengers and tourists spend their time on St. John.
Photo by Luis Joel Méndez González | Centro de Periodismo Investigativo

Elizabeth Jaeger, a professor at the University of the Virgin Islands and a St. John resident, criticized the government for paying more attention to tourists than to residents. “We have hospitals that are failing, an education system that is failing, at least in terms of infrastructure. Why aren’t those issues central [to the government]?” she said.

The professor said that, in residents’ view, the government does not pay enough attention to their needs because it is immersed in the tourism industry, which represents a fundamental part of the economy.

Taxi drivers, tour guides, cooks and servers in the port cities of Crown Bay, Cruz Bay, Frederiksted and Charlotte Amalie make their living from the tourism industry, which accounts for 30% of the U.S. Virgin Islands’ gross domestic product, or GDP. Its economic impact could be greater because of its multiplier effect. GDP is an indicator used to gauge the wealth a territory generates and measures the value of all goods and services produced in an economy during a given period.

Mark D. Wenner, an economics professor at the University of the Virgin Islands, told the CPI that economic growth on the islands has been “anemic” over the past decade, something reflected in reports from the U.S. Government Accountability Office

“If you look at the average wages for jobs in the hospitality, tourism and leisure sector, they are very, very low,” the economist said.

For example, about 28% of workers in the U.S. territory are employed in the accommodation and food preparation sectors, accounting for about 5,680 jobs, according to the latest data from the Virgin Islands Department of Labor. The industry has an average weekly wage of $717, equivalent to $18 an hour.

According to the U.S. Bureau of Labor Statistics, that hourly wage is below the U.S. Virgin Islands’s average hourly wage of $25.35.

Jaeger said island residents are advocating for diversification of both the economic model and government investment, something the CPI observed in interviews with residents across the islands and that is reflected in goals established by the U.S. Virgin Islands government, which says they were developed with residents’ participation.

“There was a school that had to be closed during the day and that has seen some protests because of mold and because the physical conditions are just deplorable,” Jaeger recalled of an incident last summer. “And people are wondering: Well, why isn’t that being fixed instead of building a racetrack or thinking of all these ways to improve the cruise industry and the [tourist] experience?”

Arthur Petersen Jr., an environmental leader and St. Croix resident, agreed that the U.S. Virgin Islands government prioritizes tourism industry profits over residents’ quality of life.

“The Virgin Islands are for Virgin Islanders. That doesn’t mean that [as a tourist] you don’t have rights here. It means that if you live here, you should have the right to enjoy all the amenities that are available and not have to compete with others or see others given preferential access,” Petersen Jr. said. “There’s much more interest in putting in tourism infrastructure than in improving the schools, the hospitals,” he added.

Increase in Cruise Traffic

The tourism industry in the U.S. territory receives a steady flow of visitors by air and cruise ship. But the costs and benefits are not the same for residents of the four islands. St. Thomas, for example, receives thousands of cruise passengers every day because it has the U.S. Virgin Islands’ two main cruise ports. St. Croix also has a cruise pier but receives substantially fewer passengers. On St. John and Water Island, most cruise passengers visit by ferry from St. Thomas.

From Cyril E. King Airport in St. Thomas, you can fly to St. Croix in 25 minutes. By ferry, the trip takes about two hours.
Photo provided by the Virgin Islands Port Authority

Unlike St. Thomas, St. Croix’s economy was not always tied to the tourism industry. Beginning in the mid-1960s, one of the world’s largest oil refineries, Hovensa, operated on the island. Capable of processing more than 500,000 barrels of crude oil a day, it was the island’s largest private employer, with more than 2,000 employees when it closed in 2012. Since then, the cruise industry has taken on increasing importance in the local economy, according to island residents.

Kristhine Deller’s parents migrated from Trinidad and Tobago to St. Croix to work at the refinery. She was born there. Today, she works at the Caribbean Museum Center for the Arts in the coastal town of Frederiksted, the only town on St. Croix with a port capable of receiving large vessels, including warships.

Deller, a Crucian, said cruise traffic to the island has increased over the past year.

“We’re used to receiving visitors, but not in the same way St. Thomas receives them,” Deller said. “I think we’re still at this stage where we’re looking for what can help stimulate the economy but also help us improve without becoming a burden on resources. Not everyone is used to so many visitors,” she added.

Akeem O. McIntosh, who sells small bags of tea under a canopy in a small plaza a few yards from the Frederiksted port, welcomes the growth of St. Croix’s tourism industry. It is not his only source of income, but it represents a substantial part of it.

“I’m really grateful for all the decisions that were made that allowed that industry to keep growing, because I benefit directly from it,” the vendor said.

Academic institutions such as Yale University have studied the relatively low economic impact of cruise ships on the destinations where they dock, compared with other tourism sectors. But governments like the U.S. Virgin Islands continue to prioritize the industry.

An economic development plan through 2040, called Vision 2040 and produced by the U.S. Virgin Islands Economic Development Authority, includes goals such as diversifying the islands’ economy in agriculture, scientific research, and entrepreneurship. Tourism remains a major focus in the development plan, but it recognizes the need to extend tourists’ stays beyond the brief visits generated by cruise tourism.

Although the U.S. Virgin Islands governor emphasizes developing tourism infrastructure, the official economic development plan says the economy should be diversified.
Photo provided

Profits Flow Back Into the Tourism Industry

The U.S. Virgin Islands government has a $46 million Tourism Revolving Fund for this fiscal year, funded by room occupancy taxes on lodging establishments and hotels. Although it does not receive revenue from taxes on cruise passengers, the fund is used for tourism industry development, marketing and infrastructure projects, including the cruise sector.

The Virgin Islands Port Authority is a financially autonomous public corporation, so it does not receive government appropriations, but it also does not have to contribute to the General Fund. It generates operating revenue from user fees and rents charged to users of its airport and maritime facilities in St. Thomas, St. Croix and St. John.

The agency has not published its revenue figures for the past four fiscal years. The government also did not respond to a request sent in early October last year seeking that information. The only financial data available for the public corporation indicate that before the COVID-19 pandemic began in 2020, it collected an average of about $8 million a year in cruise ship fees and taxes.

The Port Authority’s budget last fiscal year was $199 million. Compared with other agencies, it is the second-largest.

Profits ‘Anchored’ at the Ports

At the Havensight port, three cruise ships from Carnival Magic, Norwegian and Holland America docked one morning last November. This pier receives more cruise ships than any other in the U.S. Virgin Islands and is operated by the West Indian Company, or WICO, a subsidiary of the Virgin Islands Public Finance Authority.

As residents go about their daily routines, some cruise passengers walk around looking for a taxi. The rest are in restaurants, bars, spas, clothing stores and jewelry shops near the port, taking advantage of the duty-free shopping this Caribbean jurisdiction offers. Visitors concentrate much of their spending at ports, terminals and cruise-related infrastructure rather than circulating their money through the local economy, according to a report by The Blue Tourism Initiative.

The seasonal nature of the cruise industry also prevents revenue from flowing evenly throughout the year, the same report says.

“The seasonal nature of cruise tourism poses additional challenges for host communities,” the report says. “During peak seasons, ports may struggle to handle the massive influx of cruise ships, leading to congestion and pressure on local infrastructure. Conversely, low-season periods result in reduced revenue for local businesses, exacerbating economic instability and vulnerability.”

Local newspapers record the number of cruise ships arriving in the U.S. Virgin Islands each week.
Photo by Luis Joel Méndez | Centro de Periodismo Investigativo

Profits Return to the Tourism Industry

The arrival of thousands of passengers within a few hours also comes at a cost for the U.S. Virgin Islands’ just over 87,000 residents, according to the 2020 Census . According to The Blue Tourism Initiative’s report on the sustainability of the cruise industry, large numbers of tourists drive up residents’ cost of living, making everything less affordable for local communities.

“The limited contribution of cruise tourists to the local economy makes destination communities more vulnerable and sensitive to economic challenges and fluctuations. Because tourists spend little time on land, local businesses often receive reduced financial benefits, leading to an unequal distribution of benefits and leaving communities dependent on seasonal and precarious jobs,” the report adds.

Interested in the military importance of their ports, the United States purchased its share of the Virgin Islands from Denmark for $25 million in 1917. Over the years, St. Thomas, St. Croix, St. John and Water Island have gained importance as cruise-industry tourism destinations.

The U.S. Virgin Islands Department of Tourism expects to receive $1.96 million cruise passengers in 2026, surpassing the peak figures from 2015 and 2016.

Economic Diversification Is Not on the Horizon

Wenner, an economist born and raised in the U.S. Virgin Islands, told the CPI that the economy’s dependence on the cruise industry has proved unsustainable for the U.S. territory because the lack of diversification has prevented sustained growth.

The University of the Virgin Islands professor urged the local government to promote economic diversification, because cruise passengers not only spend little during their hours on the islands, but much of what they buy is imported. Shopping for souvenirs such as caps, mugs, keychains and other items is the fourth most popular activity among U.S. Virgin Islands cruise passengers, according to studies.

Wenner said that as cruise ships have grown larger, they have become “a destination in themselves.” That means they will increasingly have more stores and restaurants on board, reducing what visiting tourists spend on the islands.

The dominance of tourism is dangerous, the economist said.

“Basically, the $165 that tourists spend is limited to hiring a taxi, going to a beach and maybe buying lunch and a T-shirt,” he said, referring to the average amount passengers spend during a visit, according to the latest estimate from the Florida-Caribbean Cruise Association.

César Leal, for example, is a Mexican who describes himself as a cruise enthusiast. He arrived in the U.S. Virgin Islands aboard the Adventure of the Seas at Crown Bay and spent only about 11 hours on St. Thomas. In an interview with the CPI, he said that when he disembarks, he usually pays for guided tours of tourist attractions and buys food at local kiosks.

They Survive on What They Sell to Cruise Passengers

For residents such as Ecuadorian María Augusta Delgado, who settled in St. Thomas three years ago, the cruise industry boosts sales at the fresh-fruit business where she works.

The small wooden establishment, painted green and yellow, sits along Charlotte Amalie’s waterfront promenade in the U.S. Virgin Islands capital. Her wages as a fresh-juice vendor cover her basic food expenses and apartment rent. But she hopes to open her own Ecuadorian restaurant and improve her quality of life.

Royal Caribbean is among the cruise companies whose ships dock most frequently in the U.S. Virgin Islands.
Photo by Luis Joel Méndez | Centro de Periodismo Investigativo

Delgado shares island residents’ desire for a diversified economy so people do not depend solely on tourism.

“Here, tourism is all there is,” Delgado lamented.

Dominican Daniela De la Cruz, who sells fried chicken on Horace Callwood Street in St. Thomas, faces the same dilemma. The street is lined with businesses run by Dominicans, who make up 6% of the U.S. Virgin Islands population, according to the U.S. Census Bureau’s 2020 census. Puerto Ricans account for 9%.

A Pueblo supermarket sits near the Crown Bay cruise port in St. Thomas. Inside, visitors encounter several brands produced in Puerto Rico, including Indulac, Pan Pepín, Holsum and Goya.

De la Cruz moved to the U.S. Virgin Islands a little more than a year ago. She said cruise ships are an important source of income for St. Thomas business owners. Living on the islands is expensive, De la Cruz acknowledged. The average rent on the islands is $2,133, according to the specialized platform Zillow. The minimum wage is $12.00, equivalent to about $2,080 a month for full-time work. To get by, people need more than one job, De la Cruz said.

Governor Plans to Maintain Focus on Tourism Growth

Gov. Bryan Jr. told the CPI that, as part of efforts to diversify the local economy, the government has worked to expand the free-trade zone in St. Croix, the largest in the U.S. Virgin Islands, to include new natural gas suppliers and distributors, shipyards and data centers.

“We have collaborated with the Trump administration to accomplish this. We have expanded both major ports with additional warehouse and container space to facilitate more transshipment,” he added.

U.S. Virgin Islands Gov. Albert Bryan Jr.
Photo provided by the Virgin Islands government

For Bryan Jr., however, the main investment has to remain tied to tourism because it represents such a large share of the economy. According to the governor, airports in St. Thomas still need modernization to accommodate tourist traffic, and jet bridges need to be installed that more closely meet industry standards.

Bryan Jr. said the Hovensa oil refinery in St. Croix would reopen soon. He said the U.S. Virgin Islands economy has experienced a tourism-driven boom because of “a recovery five times the size of our economy.”

Bryan Jr. said he has focused on attracting affluent residents to the islands to expand the tax base because 66% of income tax revenue collected comes from 90 taxpayers in that category.

The governor said he has worked to improve medical and social services for residents, who faced a 7.6% inflation rate in 2025. A decade ago, inflation was just 1.77%.

Meanwhile, Virgin Islands Sen. Angel L. Bolques Jr., elected in 2022, acknowledges the need to diversify cruise tourism but says it is difficult because the U.S. Virgin Islands competes with other Caribbean jurisdictions that have more territory and money, such as Puerto Rico and the Dominican Republic.

The small size of the islands that make up the U.S. Virgin Islands, as well as how dispersed they are from one another, makes them less attractive to new industries, the Democratic senator said. In his view, the high cost of energy and maritime transshipment drives up the cost of food, basic supplies and fuel. Combined with the high value of the dollar, investing in the Virgin Islands is more expensive than in other Caribbean islands, Bolques Jr. said.

Sen. Angel Bolques Jr.
Photo provided

“It’s harder for us [to diversify] because our tax base, meaning our population, is very small,” Bolques Jr. said. “We don’t have a large enough population to have what would be considered a healthy tax base that would allow us to immediately carry out many of the things we would like to do.”

Bolques Jr., the grandson of Puerto Ricans who migrated to the U.S. Virgin Islands, said not all cruise passengers visit the islands for just a couple of hours. Sometimes, tourists who arrive by ship return by plane for a longer stay. In those cases, because food and drinks are not included in their vacation package as they are on cruises, more money enters the economy because visitors have to buy from local businesses.

Colonialism Behind the Cruise Industry

The U.S. Virgin Islands are governed under an Organic Act approved by the U.S. Congress in 1936, three years before World War II began, and amended in 1954. After the occupation, the U.S. Navy governed the territory for approximately two decades.

For St. Thomas resident Imani Daniel, the way the cruise industry operates in the Caribbean reflects the colonialism that has historically shaped islanders’ relationships with their colonial powers.

Daniel is a member of the Sixth Constitutional Convention of the U.S. Virgin Islands, which is working to draft a constitution for the territory. She said the cruise industry illustrates the territory’s lack of economic autonomy, a result of colonialism, and an economy designed for tourists’ enjoyment at the expense of residents’ quality of life.

The constitutional convention delegate said that, as part of discussions over the new constitution, she has raised the importance of ensuring that the islands’ economic development serves the well-being of their residents.

High Tourist Density Leaves Residents Exhausted

Crown Bay Marina in St. Thomas has vibrant colors and well-kept gardens. There are upscale restaurants, souvenir kiosks and luxury yachts, in contrast with nearby communities and apartment complexes such as Towers Condominium and Frenchtown, where roads are riddled with potholes and bulging asphalt patches. Some homes are faded and abandoned.

The scene repeats itself on St. John, a small island about a 20-minute ferry ride from St. Thomas.

St. John is the most colorful of the four main islands. It is another so-called tourist paradise, with waterfront restaurants, docks and porcelain-white sand. Tourists gather in the central plaza, where taxi drivers and tour guides wait. Hand-painted aluminum-can crafts line the plaza, alongside residents chatting with one another and people experiencing homelessness. The vibrant colors of the main plaza fade as one moves into the residential areas.

Across from the Cruz Bay port, where the ferries arrive, Laura Tawes opened an ice cream shop with her Nuyorican husband about eight years ago. She chose St. John because she longed for a slower pace of life, something she did not have in New York, where she lived. Running the ice cream shop has been costly because of the constant power outages , which also occur on St. Thomas and St. Croix. The shop is open year-round except during the peak hurricane months, from August through October, when the territory receives fewer cruise ships.

The ice cream vendor said the island’s heavy tourist traffic exhausts residents who work in tourism and service industries. The island also receives temporary workers from the United States during the high season, which runs from late November through early May.

“It’s hard to find the balance,” Tawes said.

The high concentration of tourists in the U.S. Virgin Islands also disrupts the lives of residents such as Beverly Lockett. The St. John resident travels to St. Thomas once or twice a month for health care services and groceries. On days when large numbers of cruise ships are in port, traffic becomes difficult because of congestion.

“Tourism influences how Virgin Islanders earn a living, from public bus drivers, ferry and charter boat captains to retail and restaurant workers, as well as villa management companies and the indispensable housekeeping staff,” she said.

“As more tourists arrive, they bring their values and lifestyles with them, while local values and culture gradually disappear,” Lockett added.

This investigation was made possible in part through financial support from the Metcalf Ocean Nexus Academy (MONA) program, created by Ocean Nexus and the Metcalf Institute in collaboration with The Uproot Project.

This translation was generated with AI assistance and reviewed by our editorial team to ensure accuracy and clarity.