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U.S. Virgin Islands - Economy

Tourism, trade, and other services are the primary economic activities, accounting for nearly 60% of the Virgin Island's GDP and about half of total civilian employment. The islands host nearly 3 million tourists per year, mostly from visiting cruise ships. The islands are vulnerable to damage from storms. The agriculture sector is small, with most food being imported. Industry and government each account for about one-fifth of GDP. The manufacturing sector consists of rum distilling, electronics, pharmaceuticals, and watch assembly.

Tourism, trade, and service industries account for about three-fifths of the USVI's Gross Domestic Product (GDP). Government accounts for about one-fifth of the GDP. In the industrial sector, manufacturing was second only to tourism in economic importance until the February 2012 closure of the Hovensa crude oil refinery on St. Croix. Manufacturing is now focused on rum distilling, electronics, and pharmaceuticals. Financial and professional services and export-oriented services are growing in importance.

Like most other Caribbean islands, the USVI has no fossil energy resources and imports petroleum products to meet its energy needs, including electricity and desalination of ocean water for its public water supply. A refinery on St. Croix, one of the world’s largest, processed 350,000 barrels of crude oil a day until it was shut down in February 2012, after operating for 45 years.

Federal programs and grants, totaling $241.4 million in 2013, contributed 19.7% of the territory’s total revenues. The economy declined in 2013, due to decreases in exports resulting from the loss of refined oil products. Nevertheless, the economy remains relatively diversified. Along with a vibrant tourism industry, rum exports, trade, and services will be major income sources in future years.

Tourism and recreation can include numerous activities directly affecting coral reef habitat such as snorkeling, scuba diving, boating, fishing, and collecting reef species. Resorts, marinas, and cruise ship operations may indirectly affect coral reef habitat due to increases in oil spills, sedimentation, sewage discharge, nutrient pollution and other effects.

The USVI are a popular tourist destination, having an average of over 600,000 land visitors per year from 2000 to 2005, plus in the same time period an average of almost two million cruise ship passenger arrivals per year. Additionally, the number of tourist arrivals to St. Thomas and St. John quadrupled between 1970 and 2000. Although St. Thomas and St. John represent some of the best examples to demonstrate a negative impact from tourism on the marine environment, it is extremely difficult to attribute this decline in environmental quality to a specific tourist activity.