Bermuda’s tourism landscape in 2025 was defined by a striking contrast between the tangible sounds of construction heralding a revitalized future and the quieter reality of a slight dip in immediate visitor arrivals. While the year’s performance statistics presented a mixed picture, a powerful undercurrent of optimism flowed through the island, driven by substantial capital investment into its hotel infrastructure. This wave of redevelopment, spearheaded by three major projects, signaled a deep and unwavering confidence from investors in Bermuda’s enduring appeal as a premier destination. These initiatives are not merely renovations; they represent a strategic and comprehensive rebuilding effort poised to reshape the island’s tourism offerings and secure its competitive edge for the decade to come, suggesting a transitional phase where the foundation for future prosperity is being meticulously laid.
A Foundation for Future Growth
The Flagship Redevelopment of Fairmont Southampton
The most prominent symbol of this revitalization is the extensive redevelopment of the Fairmont Southampton, historically the island’s largest hotel. Its closure in 2020 left a significant void in Bermuda’s tourism capacity, removing 593 guest rooms and triggering widespread economic repercussions. Work to bring the landmark property back to life began in late 2024 and gained significant momentum throughout 2025, with a target reopening in 2026. The project has underscored a commitment to local employment, with over 150 Bermudians and eligible residents actively involved in the redevelopment efforts by mid-year. This commitment was further demonstrated through job fairs held to staff the hotel in anticipation of its grand reopening, signaling a revival not just for the property but for the local workforce. The redevelopment process, however, was also marked by a tragic industrial accident in April, a somber reminder of the human element behind these large-scale construction efforts.
A crucial milestone for the Fairmont Southampton project was the finalization of a revised Special Development Order (SDO), which provides the legal and regulatory framework for a significant expansion of the property. Officially gazetted in November, the SDO permits the construction of up to 159 new tourist accommodations and 91 residential units, designed as low-rise buildings to maintain the area’s aesthetic integrity. A critical stipulation within the order ensures a phased approach to development: construction on these new units cannot commence until the main hotel has officially reopened its doors to guests, prioritizing the restoration of core tourism inventory. In response to public input, the government asserted that the revised SDO was strengthened with strict conditions, including enhanced environmental safeguards, stringent wastewater treatment standards, and community-focused elements such as the creation of 7.5 acres of conservation areas and improvements to the adjacent Railway Trail and South Road.
Expanding the Island’s Luxury Portfolio
The market’s confidence was further solidified by The Loren Group’s acquisition of the historic Elbow Beach Hotel, a sprawling 44-acre property in Paget that had been closed since early 2020. Known for the successful redevelopment of The Loren at Pink Beach, the group has unveiled an ambitious vision for the site, with a comprehensive redevelopment scheduled to begin in 2026. The plan involves operating both The Loren and the new Elbow Beach property as a single, integrated hotel experience across two distinct locations. This strategy includes the demolition of the old main hotel building, which had fallen into disrepair, and the construction of a new 75-key building on the site currently occupied by tennis courts. This central hotel will be complemented by a mix of 27 high-end estate homes and cottage-style accommodations, aiming for a late 2028 completion to be fully operational for the 2029 tourist season. This project represents a significant long-term investment aimed at elevating the island’s luxury offerings.
In addition to the large-scale resort projects, 2025 also saw progress in urban hotel development with the approval of the Sankofa House project in the City of Hamilton. Ay Ay Holdings Bermuda Ltd received planning permission to transform the vacant Victoria Hall into a modern, nine-story hotel. This new establishment is projected to feature 94 rooms and will contribute to the city’s economic vitality by creating approximately 40 hotel jobs, along with an additional 16 staff for its on-site restaurant. The project’s path to approval was noteworthy, as it initially received an “obligatory refusal” from planning authorities due to concerns over its proposed height and lack of setbacks from the road. However, upon appeal, the Department of Planning ultimately expressed support for the proposal, recognizing its potential to revitalize a key urban space. This approval highlights a flexible and forward-thinking approach to development within the city, balancing regulatory standards with the need for economic growth and modernization.
A Look at the Present-Day Numbers
Strong Financial Health in the Hotel Sector
While the construction projects painted a picture of future prosperity, the financial performance of the existing hotel sector during the first nine months of 2025 provided immediate positive news. Despite a complex visitor environment, the island’s hotels demonstrated remarkable financial resilience. Hotel occupancy saw a slight but encouraging increase of approximately 1% compared to the same period in the previous year. More impressively, revenue per available room (RevPAR), a critical industry metric that measures a hotel’s ability to fill its rooms at profitable rates, surged by a robust 11.6%. This strong growth in RevPAR indicates that hoteliers were successfully commanding higher daily rates, reflecting the destination’s premium positioning and strong demand among visiting tourists. Overall, air visitors contributed an estimated $247.9 million to the local economy during this period, a modest year-on-year increase of 0.5%, reinforcing the sector’s stable financial foundation.
This financial strength provided a crucial buffer against the slight downturn in visitor volume, demonstrating that the industry was successfully optimizing revenue from the guests who did travel to the island. The significant jump in RevPAR suggests that the value proposition of a Bermuda vacation remained high, allowing properties to increase pricing without deterring their target audience. This ability to drive revenue growth even without a corresponding surge in arrivals is a key indicator of a mature and healthy tourism market. It underscores the success of strategies focused on attracting higher-spending visitors and enhancing the on-island experience. This financial stability is vital as it provides the economic confidence needed to sustain the long-term investment and redevelopment projects that are currently underway, creating a virtuous cycle where present-day profitability helps fund the infrastructure for future growth and an even stronger market position.
Challenges in Visitor Arrivals
In contrast to the positive financial indicators from the hotel sector, the overall visitor arrival statistics for the first three quarters of 2025 revealed some short-term challenges. Total air arrivals experienced a modest decline of 1.3% compared to the previous year, suggesting a slight softening in leisure and business travel by air. The cruise sector faced a more significant downturn, with arrivals dropping by 5.5%. This decline in cruise passenger numbers was attributed, in part, to factors beyond the industry’s direct control. Notably, an active Atlantic storm season forced several scheduled cruise ships to alter their itineraries and divert to other destinations to ensure passenger safety. This highlights the inherent vulnerability of a destination reliant on maritime travel to unpredictable weather patterns, a factor that can impact arrival statistics despite strong booking trends and demand for the destination.
The dip in arrivals, while not dramatic, underscored the competitive and dynamic nature of the global travel market. The slight decrease in air visitors served as a reminder that Bermuda must continually innovate and market itself effectively to attract travelers who have a wide array of destination choices. The more pronounced drop in cruise arrivals due to weather disruptions emphasized the importance of a diversified tourism strategy, one that does not rely too heavily on a single segment. While the financial performance of hotels showed that the island was successfully maximizing yield from each visitor, the arrival figures highlighted the ongoing need to focus on building demand and mitigating external risks. These statistics provided a dose of reality, tempering the long-term optimism with a clear-eyed view of the immediate hurdles the industry must navigate as it builds toward the future.
A Pivotal Year of Transition
The year 2025 was ultimately defined as a pivotal period of strategic investment and forward-looking transition for Bermuda’s tourism sector. The tangible progress on the large-scale redevelopments at Fairmont Southampton and Elbow Beach, coupled with the new urban development of Sankofa House, represented a powerful vote of confidence in the island’s long-term future. These projects collectively laid the critical groundwork for a significant expansion and enhancement of Bermuda’s tourism product. While the year’s performance data showed a slight contraction in visitor arrivals, this was overshadowed by the prevailing consensus that the “heady days” for tourism were an anticipated future state being built in the present. The industry’s narrative was one where strategic investment for future gain took precedence over modest, short-term statistical fluctuations, marking 2025 as the year the foundation for a revitalized tourism landscape was firmly set.
