The flotilla of charter boats relocating to the British Virgin Islands after new fees were introduced in June will take with it nearly $14 million in seasonal economic activity, U.S. Virgin Island industry officials said. It may be only the start.
As the 2025-26 tourism sailing season starts, at least 90 boats previously positioned in the USVI will operate from the BVI, sailing off with an estimated $13.986 in direct financial activity, said Kennon Jones, executive director of the Virgin Islands Professional Charter Association.
The downstream economic loss could be much higher once the industry’s ancillary spending is considered. The 90 boats represent at least 180 crew, plus potential shoreside employees like managers, bookkeepers, marketers, and more.
“… At the very minimum, and that’s just the lost direct economic spend, which is then multiplied throughout the economy – the cleaning company that is now going to be down 50%, for example, has 50% less revenue to spend on their groceries, business expansion, travel, entertainment, et cetera,” Jones said. “Cleaning, provisioning, flowers, maintenance, laundry, and the trickle down, or lack thereof.”
When introduced, BVI lawmakers partially justified the fee increases because they hadn’t changed in so long, more than 30 years in some cases.
Jones said the actual increases implemented went far beyond reasonable changes due to inflation. The 1992 fee per term charter under 115 feet was $800. Adjusted for 2025, that fee would be a little more than $1,875. The new fee is $7,500 — an increase of more than 837% and nearly 300% above what could reasonably be attributed to inflation, he said.
Day sailing charters and dive boats got hit even harder, with the fee going from $200 to $8,500 — a 4150% increase that is more than 1,710% higher than an increase based solely on inflation, Jones said.
“The BVI’s goal is, it seems, is to bring all charter business to the BVI and prevent charters based in the USVI from operating in the BVI. While they won’t ever openly prohibit USVI based vessels, they will continue to make it either prohibitively expensive, prohibitively bureaucratic or, a combination of both in order to effectively make it not worth it to operate in the BVI,” he said.
Some charter operators told the Source they were planning on cutting the BVI out of their normal tours. Others, with more boats, said spreading the fees across their fleet but that, ultimately, the consumer will pay for it.
While the USVI has plenty to offer vacationing boaters, it’s a different product from the BVI. Somewhat paradoxically, the American islands — often portrayed as rowdier than the relatively sedate British islands — appeal to boaters content to visit beautiful beaches and snorkel.
With similarly lovely beaches and water activities, the BVI has spent decades building up unique, grassroots bars and restaurants that appeal specifically to boaters. Recent USVI rivals to these attractions — like LimeOut, Pizza Pi, and Lovango — are excellent, Jones said, but can’t approach the BVI’s boater-bar favorites, some of which border on the legendary: the Soggy Dollar, Foxy’s, the Willie T, Marina Cay, the Last Resort, and more.
Jones pleaded for the USVI to add boating infrastructure of another kind as well. The territory doesn’t have shipyard and repair facilities that could service the charter fleet. The BVI has two: Nanny Cay and Virgin Gorda Yacht Harbor.
“To be competitive, the USVI desperately needs a world class shipyard and haul out facility. The USVI loses untold millions in business in this sector alone to the BVI each year simply because we do not have the infrastructure in place. Extending EDA benefits as proposed in the Marine Revitalization Act to potential developers of such a facility hopefully can finally get one going. Previous proposals and ideas attached for facilities at Havensite and/or the old Cancryn school,” Jones said.
The COVID-19 pandemic shook up the Virgin Islands charter industry — with the BVI restricting visitors and the USVI remaining largely open. It shattered what had been a symbiotic inter-island relationship, Jones said.
Putting all the boats in one spot won’t work, he said. There is simply not enough room in the BVI to add all of the USVI’s charter vessels and crew. Jones said it would be very difficult for the USVI charter industry to survive without easy access to the BVI.
“Neither territory has enough space for all of the charter yachts — bareboat and crewed. The long term solution is creating a Greater Virgin Islands Sailing Zone that facilitates travel and business between the two territories creating the best possible experience for guests,” Jones said.
The cost of doing business in the BVI goes beyond the usage fees. Some USVI vessels have been waiting months for their Commercial Recreational Vessel Licenses, Jones said.
“Few, if any, have been processed and there is little communication or update from the BVI side. Yet another layer of unnecessary uncertainty put on USVI business that are trying as much as they can to comply with the BVI’s new structure,” he said.
It’s not the first hiccup in inter-island charter commerce paperwork, Jones said.
“Before COVID, to take charter guests from the USVI to the BVI, all you had to do was go to BVI Customs, fill out standard paperwork, pay fees, and then off you went,” he said. “You simply entered the territory, did your paperwork, and paid the fees as is the normal process.”
But for the 2022-2023 season, the BVI started requiring a BVI Trade License — essentially a business license — and BVI Work Permits for any foreign-based vessel that wanted to bring charter guests into the BVI, Jones said.
“There was a massive effort to comply with this at the time by USVI-based businesses fueled by typical confusing and contradictory requirements from BVI officials. Ultimately, the BVI realized they had created a giant bureaucratic mess that they didn’t have the systems or manpower to process and ultimately cancelled the trade license and work permit requirement for that season,” he said.
Today, Jones said, foreign-based charter vessels must use a BVI agent, an additional cost of between $3,500 and $5,000, to obtain a BVI Commercial Recreational Vessel License.
“With these new fees, a typical USVI-based 56 foot catamaran accommodating eight guests with two crew is looking at over $100,000 in fixed licensing, fees, and government costs — not including variable costs such as provisions, diesel, slip fees, cleaning, maintenance, etc.,” he said.
By comparison, the same boat based in the BVI would see around $25,000 in costs.
It is now significantly cheaper to operate only in the BVI for tax reasons as well, he said. The BVI has no business income tax. Reducing gross receipts to 0% as proposed in the Marine Revitalization Act would be significant to leveling the playing field, Jones said.
Taxes aside, some Virgin Islands operators predicted the bureaucratic storm coming shortly after Sept. 11, 2001, when red tape and chain-link fences started plaguing ports of entry.
Mike Fury, captain of the day-sailing Fury Charters, watched changes in government regulations closely. He stopped chartering to the BVI in 2006, when U.S. Customs and Border Protection implemented new rules at the U.S. border. Before then, Captain Mike, as he’s known, would simply fax in photos of his passengers’ passports. When new regulations required in-person check-ins and additional paperwork, he quit the border altogether.
“It became a hassle,” he said.
St. Croix Source
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